Foundations of Economics

Which of the four factors of production is matched incorrectly with the incomes earned from each?

• Labor - Tools

• Land - Rent

• Capital - Interest

• Entrepreneurship - Profit

Scarcity can be defined as

• the principle that limited amounts of goods and services are available to meet unlimited wants

• the loss of the next best use of resources

• the use of fewer resources than the economy is capable of using

• lowest legal price tan can be charged for a product

What are the basic economic questions all economic systems must answer when dealing with scarcity?

• unlimited wants vs limited resources

• underutilization

• supply and demand

• opportunity costs

Opportunity costs can be defined as

• the principle that limited amounts of goods and services are available to meet unlimited wants

• the loss of the next best use of resources

• the use of fewer resources than the economy is capable of using

• lowest legal price tan can be charged for a product

What economic model demonstrates opportunity costs decisions?

• Production Possibilities Curve

• Production Possibilities Schedule

• Opportunity Costs Curve

• Opportunity Costs Schedule

Underutilization can be defined as

• the principle that limited amounts of goods and services are available to meet unlimited wants

• the loss of the next best use of resources

• the use of fewer resources than the economy is capable of using

• lowest legal price tan can be charged for a product

All of the following cause the Production Possibilities Curve to be pushed outward except

• new technology

• additional resources

• international trade

• increased work ethic

How would one demonstrate an opportunity cost decision on the model?

• by movement along the curve

• by pushing the curve outward

• by pusing the curve inward

• by creating a whole new curve

Missing the chance to watch your favorite movie , so that you can do well on an exam is an example of

• opportunity costs

• scarcity

• labor

• underutilization

How would you illustrate the opportunity cost of producing more captial goods?

• moving from point B to A

• moving from point A to B

• moving from point B to D

• moving from point B to F