Economics Unit 1 Review

Economics is about making choices.

• True
• False

An example of a positive economic statement is "The U.S. unemployment rate is 5.8%."

• True
• False

Your opportunity cost depends on your alternatives.

• True
• False

Which of the following is a service?

• a restaurant meal
• a guitar lesson
• dry-cleaning fluid
• a concert t-shirt

Economics is the study of how

• gov't allocates scare resources to satisfy people's unlimited wants.
• gov't supplies money to businesses to produce goods & services.
• people use their scarce resources to satisfy their unlimited wants.
• businesses supply unlimited goods & services with limited resources.

An example of a renewable resource is

• oil
• coal
• copper
• timber

An example of an exhaustible resource is

• timber
• corn
• oil
• cotton

The opportunity cost of a chosen item or activity is

• the money you must give up to buy it
• the value of all alternatives you must pass up
• The value of the best alternative you must pass up.
• the money you lost by not choosing the least expensive option.

The United States is a pure market economy.

• True
• False

The government makes all economic decisions

• Traditional
• Command
• Market