Economics Review 1

When an economist uses the term opportunity cost, it refers to these situations EXCEPT-

• Paying rent instead of going to a concert

• Taking a vacation instead of fixing a leaking roof

• Buying steak at the store for dinner

• Getting a pedicure instead of going out to eat

Utility is a measure of

• Scarcity

• Usefulness and satisfaction

• Consumer response

• choices

The basic idea of choice presents which of the following problems in economics?

• Decisions produce costs

• People get to decide that they want

• Choice is a way of life

• Businesses can sell what they want

Resources that are made by humans and used to create other goods and services is called

• land

• labor

• capital

• production

Which of the following is NOT considered capital for a hotdog business?

• Assistants

• Food truck

• Ketchup

• A grill

The inability to satisfy the unlimited wants and needs of people is the definition of:

• Scarcity

• Economics

• Factors of production

• Opportunity cost

Which of the following concepts can be modeled using a production possibility graph?

• Societies have preferences of what should be produced

• The government knows what is best for the economy

• Making more of one good means making less of the other good

• Prices will be determined in a market

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

• Consumers make all the economic decisions

• Relying on customs and beliefs to shape the economy

• High degree of individual freedom

• The government sets the prices of products

What incentive do manufacturers have to sell their products?

• Popularity of the product

• Making profit on sales

• Putting others out of business

• Pleasing the consumer

The government owns all the industries, businesses and farms. What type of economy is this?

• Market

• Traditional

• Business

• Command