Econ Chapters 2 & 3 Review

Econ Chapters 2 & 3 Review

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Multiple Choice

Which of the following best describes a shortage?

• permanent state whereby resources will eventually disappear

• consumption of a good or service

• extra unit of any one good

• temporary condition where demand is greater than supply

Multiple Choice

What is a good?

• work done by someone else

• an item produced using factors of production

• temporary condition whereby supply is greater than demand

• extra joy or happiness derived from consumption

Multiple Choice

What is a service?

• work done by someone else

• an item produced using factors of production

• temporary condition whereby supply is greater than demand

• extra joy or happiness derived from consumption

Multiple Choice

Which of the following best describes scarcity?

• permanent state whereby resources will eventually disappear

• consumption of a good or service

• extra unit of any one good

• temporary condition where demand is greater than supply

Multiple Choice

Which of the following is not considered to be a factor of production?

• output

• land

• entrepreneurship

• capital

Multiple Choice

All of the following would be considered to be a part of 'land' EXCEPT:

• solar farm

• iron mine

• forests

• hourly wage

Multiple Choice

What is labor?

• liberal party in UK government

• chores

• homework

• work done in exchange for wages

Multiple Choice

Which best fits the following: joy, happiness, or pleasure derived from economic decisions

• labour

• cost

• utility

• production

Multiple Choice

Which of the following is the best example of opportunity cost?

• I am more happy after receiving another slice of pizza

• I am more happy receiving an extra slice of happiness, but I do not like it as much

• I must give up having a pizza slice to have a garlic breadstick

• I can maximize my happiness by having two pizza slices and three garlic breadsticks

Multiple Choice

Which of the following is the best example of marginal utility?

• I am more happy after receiving another slice of pizza

• I am more happy receiving an extra slice of happiness, but I do not like it as much

• I must give up having a pizza slice to have a garlic breadstick

• I can maximize my happiness by having two pizza slices and three garlic breadsticks

Multiple Choice

Which of the following is the best example of diminishing marginal utility?

• I am more happy after receiving another slice of pizza

• I am more happy receiving an extra slice of happiness, but I do not like it as much

• I must give up having a pizza slice to have a garlic breadstick

• I can maximize my happiness by having two pizza slices and three garlic breadsticks

Multiple Choice

Which of the following is the best example of the Production Possibilities Frontier?

• I am more happy after receiving another slice of pizza

• I am more happy receiving an extra slice of happiness, but I do not like it as much

• I must give up having a pizza slice to have a garlic breadstick

• I can maximize my happiness by having two pizza slices and three garlic breadsticks

Multiple Choice

What does the Production Possibilities Frontier represent?

• an inefficient combination of resources in the world

• shows that the sky is the limit for economic demand

• shows the combination of two goods which can be produced

• shows the combination of inputs into outputs

Multiple Choice

What is ceteris paribus?

• and so on...

• all else held equal

• by the fact

• argument against the person

Multiple Choice

What does this image show?

• factors of production

• operating cost of a firm

• Nash Equilibrium

• Production Possibilities Frontier

Multiple Choice

Why might the PPF expand?

• lack of resources

• inefficient use of resources

• new technology

• opportunity cost

Multiple Choice

Why might the PPF shrink?

• loss of resources

• inefficient use of resources

• new technology

• opportunity cost

Multiple Choice

Where can you find the Marginal Cost on the Production Possibilities Frontier (PPF)?

• x axis

• y axis

• slope

• inefficient point

Multiple Choice

Why is the PPF downward sloping?

• represents opportunity cost

• represents an inefficient economy

• represents tradeoff

• represents scarcity

Multiple Choice

Which of the following is least important for a society to ask about economic decisions?

• where to produce goods and services

• what goods and services should be produced

• how should goods and services be produced

• for whom should goods and services be produced

Multiple Choice

Which of the following is NOT an broad economic goal in society?

• economic equity

• economic growth

• economic profitibility

• economic freedom

Multiple Choice

In a true free market system, what is the most important economic goal?

• economic freedom

• economic equity

• economic security

• economic stability

Multiple Choice

Which of the following is NOT one of the broad economic systems in the world?

• authoritarian

• command

• market

• traditional

Multiple Choice

Which best matches? Decisions are made based upon customs over generations

• traditional

• market

• command

• none of the above

Multiple Choice

Which is the best example of a command/planned economy?

• individuals make selfish decisions which impact the market

• customs and traditions dictate the distribution of goods

• Pharaohs ordered labor and resources to build grand palaces and monuments

• all of the above

Multiple Choice

Which of the following best describes a market economy?

• a central authority determines distribution of goods and services

• decisions are not planned or directed by a higher authority

• economic decisions are based upon centuries of tradition

• decisions are made for the best in society

Multiple Choice

What does this image depict?

• Production Possibilities Frontier

• Marginal Opportunity Cost

• Supply and Demand Equilibrium

• Circular Flow Model