Unit 1 - Intro to Economics

Scarcity is a problem

• measured by the amount of goods available.

• of the poor, but not the rich.

• because human wants are unlimited while resources are limited

• only in industrialized economies.

Which of the following is true of resources?

• Resources are inputs used to produce goods and services.

• Labor is the mental and physical capacity of workers to produce goods and services.

• Entrepreneurship organizes resources to produce goods and services.

• All of these are true.

Which of the following is NOT an example of a factor of production?

• A forest.

• A computer program.

• A labor leader.

• Dollars.

An economics textbook is an example of:

• capital.

• labor.

• a natural resource.

• entrepreneurship.

The central question in economics is how to:

• deal with the problem of scarcity.

• change government economic policy.

• change people's wants to match their needs.

• manage money and become wealthy.

The branch of economics that focuses on economywide variables like inflation and unemployment is

called:

• macroeconomics.

• microeconomics.

• free-market economics.

• aggregate economics.

Which of the following is a microeconomics topic?

• A price of a new home.

• The inflation rate.

• The economy's growth rate.

• The unemployment rate.

A model is defined as a:

• description of all variables affecting a situation.

• positive analysis of all variables affecting an event.

• simplified description of reality to understand and predict an economic event.

• prediction based on historical evidence.

When economists use the term Ceteris paribus, they are indicating that:

• the relationship between two economic variables cannot be determined.

• the analysis is true for the individual but not for the economy as a whole.

• all other variables except the ones specified are assumed to be constant.

• their conclusions are based on normative economics rather than positive economic analysis.

A positive economic statement is:

• an opinion of an action that should be taken.

• an action that will have a positive effect on the economy.

• a statement testable by facts.

• a claim that the speaker is positive will occur.