SV Contemporary Economics Review Chapter 1

Which of the following statements accurately describes an entrepreneur?

• The entrepreneur wants production costs to exceed revenue.

• All entrepreneurs must accept the risk of failure.

• A person can only be considered an entrepreneur if he or she develops a new product.

• The entrepreneur works mainly with nonprofit organizations.

Economics is about making choices.

• True
• False

An example of a positive economic statement is "The U.S. unemployment rate is 3.8%."

• True

• False

Markets are the means by which buyers & sellers carry out exchange.

• 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

Scarcity arises because all societies have

• limited productive resources to satisfy unlimited wants
• unlimited productive resources to satisfy limited wants
• limited needs and unlimited wants
• unlimited needs and limited wants

An individual who tries to earn a profit by developing a new product or finding a better way to produce an existing one is a(n)

• employee
• manager
• entrepreneur
• executive

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