Fundamentals of Economics #1

Johnny has $50 and wants to buy a pair of Nike Shoes that cost $95.  He has to settle for a pair of Sketchers for $45.  In economic terms Johnny is facing the problem of: 

• Shortage
• Scarcity 
• Unemployment 
• Marginal costs

Antonio has an Economic test tomorrow and knows that if he stays up and studies until 11 p.m. he has a good chance of making an A on the test.  However he is really tired and knows that if he goes to bed at 10:00 p.m. he can easily make a B on the exam.  What is Antonio's opportunity cost if he goes to bed at 11:00 p.m.

• An A on the exam 
• making a B on the exam 
• Losing one hour of sleep
• gaining one hour of sleep

Freddie wants to start a lawncare business and make extra money after school and on the weekends.  What productive resources will he need to start his business. 

• lawnmower, weed eater, gasoline
• Money to buy his neccessary materials 
• land, labor and capital
• Money and tools 

Country X has a barell of crude oil and they knw that they can produce several items from this barrell.  If the following is their priority list, What is their opportunity cost of choosing heating oil
1. Heating oil
2. Gasoline 
3. Plastics
4. fertilizer

• Heating Oil
• Plastics 
• Gasoline 
• Fertilizer

The study of economics is primarily concerned with:

• demonstrating that capitalistic economies are superior to socialistic economies. 
• determining the most equitable distribution of society's output.
• keeping private businesses from losing money.
• choices which are made in seeking to use scarce resources efficiently.

When you go to lunch at MZHS and willingly give your money for pizza you are participating in a 

• Voluntary exchange 
• trade off 
• Opportunity Cost 
• fraudulent exchange

An economy in which the individuals own the factors of production and decide for themselves the answers to the basic economic questions is what kind of economy? 

• Traditional 
• Market 
• Command 
• Centrally Planned 

The economy of the Bushmen of the Kalahari Desert the people follow the examples of their ancestors.  This is what kind of economy? 

• Traditional 
• Market 
• Command 
• Centrally planned 

The Country of Korea, who has a dictator that makes most of the econmic decisions is what kind of economy?

• Traditional 
• Market 
• Command 
• Centrally Planned 

The Federal Government of the United States has a progressive tax system which takes more taxes from individuals as their income rises.  This money is used to support many individuals with food, housing and medical services. This function of government in a market economy is called: 

• resolving market structures 
• efficiency and stability
• protecting property rights
• redistributing income