Outreach & Distance Education  Lesson One Assignments

Introduction -- Reading Assignment -- Discussion -- Lesson Assignments -- Answer Sheet -- Assignment Submission Directions

Save the answer sheet to your computer and type your answers into it. Complete all parts of this assignment before submitting your assignment for grading.

Matching
Read each definition in the left-hand column. On your answer sheet, enter the letter of the term from the right-hand column that best fits the definition. Notice that there are more terms than definitions.

  1. the most highly valued alternative forfeited when a choice is made
  2. an economy in which economic actions taken anywhere in the world may affect your standard of living
  3. the condition in which our wants are greater than the resources available to satisfy all those wants
  4. a special talent for searching out and taking advantage of new business opportunities and developing new products and new ways of doing things
  5. an economic system in which government owns and controls many of the resources
  6. something that encourages or motivates a person toward action
  7. the amount of money left over after all the costs of production have been paid
  8. the average cost or expense of a good times the number of units of the good sold
  9. the amount of money by which total cost exceeds total revenue
  10. a person who receives the benefits of a good without paying for them
  1. free rider
  2. incentive
  3. profit
  4. total cost
  5. total revenue
  6. public good
  7. entrepreneurship
  8. global economy
  9. opportunity cost
  10. scarcity
  11. socialism
  12. loss

Fill-in-the-Blank
Read each incomplete sentence and the words or phrases in parentheses. On your answer sheet, enter the word or phrase that best completes the sentence or answers the question.

  1. Economists believe that nearly everything we do has benefits and __________. (costs, opportunities)

  2. Economists think in terms of __________ effects of any action. (the most obvious, both the intended and unintended)

  3. People want things that will give them __________ or satisfaction. (tangibles, utility)

  4. The problem of __________ is a basic fact of life for people everywhere. (opportunity, scarcity)

  5. Scarcity implies that __________ have to be made. (choices, goods)

  6. Land earns __________. (rent, interest)

  7. Entrepreneurship earns __________. (wages, profits)

  8. You are likely to find an economic plan to guide the direction of economic activities in a __________ system. (free-enterprise, socialist)

  9. In a free-enterprise economic system, prices are __________. (controlled by government, not controlled)

  10. It is useful to refer to the U.S. economy as a free-enterprise system, even though it is really a __________ economy. (socialist, mixed)

  11. In a free-enterprise economy, goods are produced for people who are willing and __________ to buy them. (able, eager)

  12. The five major features that define free enterprise are private property, choice, competition, economic incentives, and __________. (government control, voluntary exchange)

  13. Any good that is owned by __________ is public property. (the government, a group of companies)

  14. In a free-enterprise system, __________ benefit from competition. (only consumers, both consumers and workers)

  15. When total revenue is __________ than total cost, there is a profit. (less, greater)

  16. When resources are __________, they are moved from one place to another, or they are used in different ways. (reallocated, revised)

  17. Supporters of free enterprise believe that an ethical economic system produces goods and services preferred by the majority __________. (only, and the minority)

  18. Supporters of free-enterprise economy believe that __________ should enforce contracts. (governments, volunteers)

  19. In a true free-enterprise economy, people would be willing to produce only __________ goods. (public, private)

  20. The circular flow of economic activity shows that the parts of the economy are __________. (interrelated, independent)

Short Answer
Answer briefly but completely on your answer sheet.

  1. List at least two examples of each of the four factors of production.
    1. land
    2. labor
    3. capital
    4. entrepreneurship

Essay
Write a one-page essay (approximately 300 words) introducing yourself and describing some fairly important choices that you have made. What did you choose to buy, do, or devote your time to? What was the opportunity cost that you paid when you made that choice? Remember that the opportunity cost was the next best thing you could have done or had if you had not made the choice you did. For example, because you may have chosen to save for college, you may be giving up the opportunity to buy a car for the time being.

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