Basic Concepts #2

Which of the following best defines opportunity cost?

• It is the cost of producing those goods most desired by an economy
• It is the cost of the input mix that will lead to the greatest rate of growth for a company
• It is the amount of one product that must be given up in order to produce another
• It is the cost of labor used in the production process

Which of the following would best complete a short definition of economics? "Economics is the study of ..."

• How unlimited resources are allocated between scarce wants
• How scarce resources are allocated to satisfy unlimited wants
• How money is circulated through the economy
• How nations trade goods and services in a global marketplace

After graduating from high school, Maria chose to go to college, while Omar chose to work full- time. Which of the following best describes the opportunity costs for these decisions?

• Maria’s opportunity cost includes the salary she could have earned if she had gone to work
• Maria’s opportunity cost is her living expenses while attending college
• Omar’s opportunity cost is the salary he will earn from working
• Omar’s opportunity cost is the tuition and expenses he would have paid for college

The basic problem of all economies is essentially one of deciding how to make the best use of:

• unlimited resources to satisfy unlimited wants 
• unlimited resources to satisfy limited wants 
• limited resources to satisfy unlimited wants 
• limited resources to satisfy limited wants 

Individuals in any society must make choices regarding the types of goods and services to be produced because 

• free markets only satisfy the demands of paying consumers 
• opportunity costs increase as more of a good or service is produced 
• resources are scarce and human wants are unlimited 
• resources must be allocated for the benefit of the entire society 

Which of the following is not a basic economic questions?

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

What represents the range of production possibilities?

• scarcity curve
• production possibilities curve
• supply curve
• factor curve

Who is the Father of Economics?

• Ben Franklin
• Thomas Jefferson
• Adam Smith
• Terry Gobert

What is Basic requirement of Survival?

• want
• standard of living
• need
• space

Risk taker in an economy

• consumer
• producer
• entrepreneur
• government