Economics: Chapter 1

Which of the following is one of the four factors of production?

• productivity

• goods

• entrepreneurship

• services

As an economic term, land includes __________________.

• work people do

• natural resources

• machinery

• knowledge

All economic choices involve _________________.

• trade-offs

• destruction of resources

• shortages

• tax dollars

What trade-off is involved when you buy a CD?

• exchanging time for money

• exchanging one service for another

• exchanging money for goods

• exchanging goods for services

Economic models are useful because they _________________.

• show the way people react to changes in the economy

• provide every detail about a problem to be studied

• judge the value of economic events

• make testing hypotheses unnecessary

Which of the following is a visual aid that helps a business determine how best to use its resources?

• opportunity cost

• trade-off

• production possibilities curve

• scarcity

Why can't economic models judge whether policies are good or bad?

• models are not good enough

• models are not based on fact

• judgements depend on values

• Economists do not test their hypotheses

These people take risks in order to reap profits.

• Analysts

• Stock brokers

• Entrepreneurs

• Economists

To an economist, a want is _________________________.

• something you do not have

• something other than a basic survival need

• something you must have to survive

• something most people have

Which of the following describes what economists do?

• predict which policies will be good or bad

• consider every detail of a problem

• offer solutions to economic problems

• rely on public opinion