Economics Chapter 1 - 3 Review

Opportunity costs for watching television ___ throughout a week-long period

• steadily increase

• quickly decrease

• constantly change

• remain stable

Which of the following statements best summarizes the economic problem?

• The unemployment rate in the U.S. continues to rise

• You can never accurately determine opportunity costs

• While your wants are unlimited, the resources needed to satisfy these wants are scarce

• Not enough young people can afford a college education

Economic theory can do which of the following things?

• Predict what will happen to the unemployment rate if the country goes to war

• Cause the price of bread to rise steadily

• Drive the economy in a certain direction

• None of these choices

Suppose you decide to tutor your younger brother in Spanish instead of going to a movie with your friends. In order to arrive at this decision, which of the following did you need to take into account?

• Sunk cost

• Opportunity cost

• Scarcity

• Economic theory

Productive resources are

• unlimited

• the goods produced by companies

• scarce

• available only in the United States

Which of the following is a service, as opposed to a good?

• a sweater

• typing

• tomatoes

• scissors

Which of the following statements accurately describes an entrepreneur?

• The entrepreneur works mainly with non-profit organizations.

• The entrepreneur wants production costs to exceed revenue

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

• All entrepreneurs must accept the risk of failure.

Rational decision makers will change the status quo if they expect that the marginal benefit form the change will be _____ the expected marginal cost.

• less than

• greater than

• equal to

• all of these choices

When making economic decisions, how should you approach sunk costs?

• Sunk costs should not be considered in such decisions

• Sunk costs should be carefully calculated before making any decisions

• You must take measures to ensure that your economic decisions will not cause you to incur sunk costs

• None of these choices

Economists assume which of the following things?

• That unemployment will steadily increase

• That people try to make rational decisions

• That demand for all products will grow over time

• That the supply of products is fixed