Name______________________ Economics: Goal Seven Test Study Guide Chapters 18, 19, 26.2 and 26.3 Chapter 18 Define the following terms: 1. need 2. want 3. economics 4. microeconomics 5. macroeconomics 6. economic model 7. economic system 8. resource 9. scarcity 10. trade-off 11. opportunity cost 12. marginal cost 13. marginal benefit 14. cost-benefit analysis Answer the following questions: 1. What is the difference between a want and a need? Give an example of each. 2. What is the relationship between wants/needs and resources? What do we call this relationship? 3. What are the three basic economic questions? 4. What is an example of a cost? 5. What is an example of a trade-off? 6. What is an example of an opportunity cost? 7. What is a fixed cost? 8. What is a variable cost? 9. What is total cost? 10. What is a marginal cost? 11. What is revenue? 12. How do you calculate total revenue? 13. What is marginal revenue? 14. What does a cost-benefit analysis compare? 15. If the marginal cost outweighs the marginal benefit, what should you do? 16. If the marginal benefit outweighs the marginal cost, what should you do? 17. What is diminishing marginal benefit? Chapter 19 and 26.2 and 26.3 Define the following terms: 1. goods 2. services 3. factors of production 4. natural resources 5. labor 6. capital 7. entrepreneur 8. Gross Domestic Product (GDP) 9. per capita GDP 10. standard of living 11. market 12. factor market 13. product market 14. productivity 15. specialization 16. division of labor 17. economic interdependence 18. capitalism 19. free enterprise 20. consumer sovereignty 21. private property rights 22. competition 23. profit 24. laissez-faire economics Answer the following questions: 1. What are the four factors of production? 2. Give examples of two renewable natural resources. 3. Give examples of two non-renewable natural resources. 4. Give three example of labor. 5. Give three examples of capital. 6. Give three examples of entrepreneurship. 7. What are the four sectors in the United States market? What are the two major sectors? 8. Complete the Circular flow of Economic activity chart below: 9. What is an example of specialization? 10. What is an example of division of labor? 11. What is the trade-off involved with economic interdependence? 12. What is the “invisible hand”? 13. What is a market economy? 14. What is a command economy? 15. What is socialism? 16. What is communism? 17. What is a mixed economy? 18. What is a traditional economy? 19. What is a developing economy? 20. What are five problems developing economies face? 21. What kind of economies did Russia and China have before the 1980s? What kind of economy are they striving for now?