Economics Pre-Test

The perpetual problem in economics is:

• The inability of people to work together effectively.
• The inability to satisfy everyone's wants with the resources available.
• The gap between the income of the rich and the poor.
• How to supply enough to earn a consistent profit

The definition of Scarcity is...

• An unlimited amount of resources to meet limited wants and needs
• A limited amount of resources to meet unlimited wants and needs.
• When people use time and energy to create events
• A city where individuals commit themselves to unlimited wants and needs

Sally decides to attend college after high school rather than getting a job. What is her opportunity cost?

• All the things she could have done in that time
• Her tuition and fees
• Wages she could have earned at a job
• The education she gains in college

Why are entrepreneurs like Sean Combs (aka P. Diddy) important in a free enterprise economy?

• They hire their own employees
• They make safe investments
• They pay excellent salaries
• They start new businesses

What is foregone benefit of the next best alternative when resources are used for one purpose rather than another?

• Opportunity Cost
• Trade in
• Trade on
• Scarcity

What are these?
Land, labor, capital, and entrepreneurship

• Economy
• Infrastructure
• Factors of production
• Capital

If a country can produce a good at a lower opportunity cost then they have a(n)...

• Absolute Advantage
• Comparative Advantage
• Trade Surplus
• Trade Defecit

If a country produces more of a good than another country then they have a(n)...

• Absolute Advantage
• Comparative Advantage
• Trade Surplus
• Trade Defecit

A graphical representation of the alternative combinations of goods and services an economy can produce is called?

• Production Frontier Curve
• Production Possibilities Frontier
• Production Performance Curve
• Production Alternative Frontier

A start-up company just acquired a big project. The project requires a lot of money.The company must hold off on building its new office to complete the project. What was the reason for the company's decision?

• The marginal benefit of completing the project outweighs the marginal cost of the project
• The marginal cost of building a new office is equal to the marginal benefit of completing the project
• There is no practical marginal benefit in building a new office for the company in the long run
• The marginal benefit of the new office is less than its marginal cost