Econ Unit One

Which describes an action that serves the goal of equity?

• a student who eats her lunch before the lunch period is given another lunch

• a player with the fewest points is given more points to help her catch up

• a player who cheats at cards is eliminated from the game

• a parent buys presents for all of the children attending his child's birthday party

Which best explains why the game of economics is about setting goals as well as making allocation decisions?

• It's unnecessary to have a goal to make allocation decisions.

• There are different and incompatible economic goals.

• Making allocation decisions requires information and resources.

• Consumers need goals in order to know what goods and services to buy.

You are organizing an economy. Which question must you answer first?

• How is production to be organized?

• What is to be produced?

• How are goods and services to be distributed?

• What is the most effective allocation of resources?

Which must an activity have in order to be considered a game?

• winners and losers

• one or more players

Which is not necessary to the game of economics?

• distribution of goods

• allocation of resources

• consumption of services

• reduction of waste

Which is a question that must be answered before production can take place?

• How is production to be organized?

• What can be done to eliminate scarcity?

• Who will receive the goods and services?

• What is the most fair distribution of goods?

Which is one way that land contributes to production?

• Roads allow for the transportation of goods.

• Tools are created by humans to aid production.

• Energy from the environment fuels production.

• Ideas are needed to figure out how to use natural resources.

Which is the reason why, in a free-market society, the government passes laws against theft, coercion, and fraud?

• protect freedom of choice

• prevent innovation

• plan an efficient economy

• guarantee security and growth

Which best explains why the profit motive often leads to efficiency and innovation?

• The competition to make profit drives producers to eliminate waste.

• Profit gives producers more money to be able to buy better resources.

• Consumers want to reduce waste in order to spend less on what they buy.

• Losing money prevents producers from hiring the most efficient workers.

Which statement accurately describes how costs and benefits are calculated?

• Cost-benefit analysis is an attempt to get benefits to exceed costs.

• Money is an important cost but not the only one.

• Calculations of cost and benefit are based on personal preferences.

• Benefits do not always increase as costs increase.