EPF Cycle 1 - Basic Economics

Air, Water, Food, Shelter, Sleep

These are all examples of

• capital.

• wants.

• needs.

• natural resources.

Consumers have unlimited wants, but their ability to satisfy these wants is

• painful.

• limited.

• inflated.

• protected.

A student would like to attend a football game Friday night but has been asked to work an extra shift as a bus boy. He is working to save money for college. Giving up the ball game is an example of

• scarcity.

• opportunity cost.

• value-added decisions.

• trade off.

Which list contains the four factors of production?

• Labor, capital, productivity, and renewable resources

• Land, labor, capital, and entrepreneurial skills

• Land, labor, credit, and entrepreneurial skills

• Labor, capital, economics, and natural resources

A farmer's tractor is an example of which factor of production?

• Land/Resources

• Labor

• Management/Entrepreneurial Skills

• Capital/Capital Goods

Joe is starting a cleaning service. He has an office space, cleaning materials, and money to pay his initial costs. Which factor of production is he missing?

• Land

• Labor

• Capital

• Entrepreneurship

The "invisible hand" is a major factor in which economic system?

• Command Economy

• Market Economy

• Socialist Economy

• Traditional Economy

Which of the following is a characteristic of a traditional economy?

• Economic decisions are based on habits and customs.

• People are free to choose any career that they want.

• The government subsidizes unprofitable businesses.

• The government tells people which businesses they can run.

The United States has a mixed economy, meaning it is mostly a market economy with some aspects regulated by the government. Which of the following is an example of how the U.S. government is involved in the economy?

• It signed the North American Free Trade Agreement.

• It has imposed minimum wage laws.

• It allows corporations to sell many different things.

• It allows ownership of private property.

In a market economy, prices are determined by supply and demand. How is the price of an item affected if the supply goes down?

• The price will go down, but then it will go up.

• The price of the item will stay the same.

• The price of the item will go up.

• The price of the item will go down.