Basic Economics Review

Basic Economics Review

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Multiple Choice

The goal of the consumer in an economy is to?

• Maximize utility

• Minimize utility

• Impress others

• Buy the least goods and services for the highest price

Multiple Choice

Which is not a basic economic question?

• What to produce?

• How to produce?

• For whom to produce?

• What is the cost to produce ?

Multiple Choice

Which of the following is not correct payment?

• Land=Rent

• Labor=Wage

• Capital=Interest

• Entrepreneur=Cost

Multiple Choice

An economic system must answer all of the following questions EXCEPT...

• What to produce
• Why to produce
• How to produce
• For whom to produce

Multiple Choice

What must be given up to obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

• Benefits
• Costs
• Choice

Multiple Choice

Monetary or non-monetary gain received because of an action taken or a decision made

• Benefits
• Costs
• Choice

Multiple Choice

Which of the following statements is true: 

• An economist would consider something scarce only if it is limited (not anything else) 
• A trade off occurs when you give up something you want in order to get something else you want 
• The economic social goal, economic equity, means everyone gets the same amount of money 
• In a traditional economy, the government gets to decide the answers to the 3 basic economic questions

Multiple Choice

Examining the cost and the expected benefits of a choice is an aid to decision making

• Trade-off
• Cost-benefit analysis 
• Marginal Cost 
• Marginal Benefit

Multiple Choice

Benefits offered to encourage people to act in certain ways.

• Incentive 
• Utility 
• economize
• Trade-off

Multiple Choice

It means people act based on or following reason or logic

• Rational

• Choice

• Valid

Multiple Choice

Review this quote: "...he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.  What is meant by the invisible hand?

• An actual invisible hand guides economic outcomes, and freedom is created. 
• The invisible hand is a metaphor or a symbol of "market forces" in the free-market system.  These market forces lead to good outcomes without any central planning. 

Multiple Choice

Smith believed that the economy operated according to three natural laws involving this concept...

• self-interest
• compassion
• citizenship
• trustworthiness 

Multiple Choice

What book, written by Smith, is considered by many to be the cornerstone of capitalism and was Smith's most famous work?

• The Wealth of Nations

• Capitalism and its Implications

• Economics and Political Systems

Multiple Choice

What does the idea of ‘the invisible hand’ in Smith’s Wealth of Nations refer to?

• the tendency of free markets to regulate themselves by means of competition, supply and demand, and self-interest

• Protectionism

• The idea of French Physiocrats

Multiple Select

Economics is all about? Check all that apply.

• choices

• using limited resources to meet unlimited wants and needs.

• Maximizing our utility

• the trade-offs we experience associated with our choices and the opportunity cost that we experience from the loss of our second choice.

Multiple Choice

Something we desire but that is not necessary for survival

• Want

• Need

• Good

• Service

Multiple Choice

What term describes the tools and technology used to make a product?

• capital goods
• human capital
• exports
• imports

Multiple Choice

Antonio has an Economic test tomorrow and knows that if he stays up and studies until 11 p.m. he has a good chance of making an A on the test.  However he is really tired and knows that if he goes to bed at 10:00 p.m. he can easily make a B on the exam.  What is Antonio's opportunity cost if he goes to bed at 11:00 p.m.

• An A on the exam 
• making a B on the exam 
• Losing one hour of sleep
• gaining one hour of sleep

Multiple Choice

Land, Labor, Capital, and Entrepreneurs

• opportunity cost

• economic strategy

• factors of production

• supply and demand

Multiple Choice

The study of how people meet their wants and needs.

• economics

• supply

• demand

• opportunity cost

Multiple Choice

Human Resources are

• makes goods or service

• the amount of goods and services people are willing to buy at a specific time

• found in people, like their skills and ideas

• the work that people do when producing goods or services

Multiple Choice

Natural resources are

• something found in nature that satisfies our wants and needs (like a tree cut down for timber)

• the amount of goods and services people are willing to buy at a specific time

• the work that people do in nature

• making goods or service

Multiple Choice

What does Specialization mean?

• Something oe person does for someone else.
• Not being able to have everything that you want because of limited resources.
• Having more than you want, or need.
• When people work in jobs where they produce a few special goods, or services.

Multiple Choice

How do you satisfy your unlimited wants in a world of limited resources?

• by making more money
• by making choices
• by stealing
• by setting a budget

Multiple Choice

Which of the following is a need?

• clothes
• car
• job
• smart phone

Multiple Choice

What is the major difference between scarcity and a shortage? 

• They are really the same
• Shortages always exist and scarcity is temporary 
• Shortages are temporary and scarcity always exist. 
• Scarcity is limited and shortages are unlimited 

Multiple Choice

 The difference between a good and a service is that:

• Goods are available in unlimited quantaties and services are not 
• Goods are tangible and services are not 
• Services are available in unlimited quantaties and goods are not 
• goods help satisfy unlimited wants and services do not

Multiple Choice

A person that takes a risk by starting a new business.

• human capital
• capital goods
• entreprenuer
• tariff

Multiple Choice

Soil, minerals, air, water, and coal are all examples of

• Fossil fules
• Conservation
• recycling
• natural resources

Multiple Choice

Which of the following is NOT one of the three basic questions of economics when looking at economic systems? 

• What goods should be produced ?
• What is the price of the goods? 
• How should the goods be produced? 
• Who gets to consume the goods? 

Multiple Choice

What is the fundamental problem of economics? 

• How to keep consumers out of debt?
• How to fulfill our unlimited wants and needs with limited resources?
• How to figure out the way to make the most money?
• How do we ensure all people get a college education?

Multiple Choice

Things require to survive are categorised as_

• Demands

• Wants

• Needs

• Desires

Multiple Choice

What name is given to the value of the next best alternative that you give up when you make a decision?

• Trade-offs

• Opportunity cost

• Lost opportunities

• Options

Multiple Choice

A Trade-off is

• a purchase in a marketplace.

• an alternative that we sacrifice when we make a decision.

• any good or service a consumer needs.

• a factor of production.

Multiple Choice

The factories, tools, machines used to produce goods

• human capital 
• physical capital 

Multiple Choice

What are the 3 basic economic Questions all economies must answer:

• Who? What? When? Where?

• I? D? K?

• What to produce? How to produce? For whom to produce?