Chapter 1: The Economic Way of Thinking

Which of the following best describes wants?

• limited and ever changing

• unlimited and ever changing

• limited and never changes

• unlimited and never changes

A person who makes goods or provides services is called a

• consumer

• customer

• provider

• producer

A country that does not posses oil is unlikely to produce

• gasoline

• rice

• corn

• furniture

A society with a large unskilled labor force will most likely practice

• machine-intensive farming methods

• labor-intensive farming methods

• machine and labor-intensive farming methods

• few intensive farming methods

Into what four categories do economists divide factors of production?

• land, labor, capital, and entrepreneurship

• land, labor, money, and entrepreneurship

• resources, labor, capital, and entrepreneurship

• resources, labor, money, and entrpreneurship

To be a successful entrepreneur requires a willingness to

• play it safe

• borrow money

• take risks

• limit risks

Which term means "making decisions based on what you believe is the best combination of costs and benefits?"

• economizing

• budgeting

• cutting back

• motivating

What does the saying "There is no such thing as a free lunch" mean?

• some things cost nothing

• most things cost nothing

• most things cost something

• everything costs something

Being guided by self-interest when making a decision means that

• act in a selfish manner

• attempt to maximize utility

• ignore the desires of others

• reduce the incentives of others

An example of a trade-off is

• giving up going to a movie to spend time shopping

• giving up going to a movie because it got bad reviews

• going to a movie to see your favorite movie star

• going to a movie because it got good reviews