Production Possiblities

The production possibilities curve is an illustration of what?

• Opportunity costs and trade-offs
• Only opportunity costs
• Only trade-offs
• none of the above

If a point lies on the curve this means the company is being efficient. If a point lies inside the curve, this tells the company what?

• They are being over efficient
• They are not efficient
• It is impossible
• None of the above

The study of economics is primarily concerned with:

• demonstrating that capitalistic economies are superior to socialistic economies. 
• determining the most equitable distribution of society's output.
• keeping private businesses from losing money.
• choices/decisions that are made due to lack of resources

If you pay $5,000 a year in tuition and give up $20,000 a year of income to attend college, then the yearly opportunity cost of college is: 

• only $5,000 of tuition. 
• only $20,000 of foregone income.
• at least $25,000 of tuition and foregone income. 
• less than $20,000 and more than $5,000.

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

Opportunity Cost is best defined as

• the value of the next best alternative that is given up due to the choice you made 
• The price you pay to purchase something 
• The benefit you gain by making a decision 
• The amount of debt you take on by making a decision 

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

Land, Labor, Capital, and Entrepreneurship 

• Diversification
• Deductions
• Portfolio
• Factors of Production 

Any resources that are made by humans and used to create other goods and services are called

• Services
• Production
• Capital
• Labor

The local government for a community must decide what to do with the sales tax collected.  They could build a new skate park or they could buy more computers for the public library.  The officials decide to build a skate park.  What is the opportunity cost of their decision?

• new skate park
• more computers