Eco Basic Principles

Economics is the study of: 

• Inflation
• Shortage
• Surplus
• Scarcity

The best definition of opportunity cost is: 

• A decision made
• The alternative that has been given up
• Finding new resources
• Determining equilibrium cost

An example of physical capital would be: 

• Human labor
• Wrench
• Bill Gates
• Money

Marx would argue the best way to produce products is by: 

• Allowing the government to determine how to produce
• Invisible hand
• Allowing tradition to dictate production
• Allowing market and scarcity to determine factors of production

Adam Smith believed: 

• Everyone should be equal
• Everyone should have a job
• Everyone should work for the government
• Government should only be involved if factors of production are compromised

A production possibility graph demonstrates: 

• opportunity cost of making one good over another
• decision used when determining how much a product will cost to produce
• ability of specialists to produce more goods than generalists
• None of the above

An advantage of a traditional economy is: 

• provide people with many options for employment
• is highly democratic
• allows individual entrepreneurs to innovate and take risks
• never changes

The big three questions each economic system must answer are: 

• What, when, and how
• How, for whom and needs wanted
• What, How, for whom
• None of the above

Which of the following would be an example of human capital? 

• The amount of workers who work in a Nike factory
• The skills of the shoe designers at Nike 
• Philip Knight, the CEO of Nike 
• The land that the Nike headquarters is located on in Beaverton Oregon

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

• human capital
• capital goods
• entreprenuer
• tariff