Summer School Unit 1

Paradox of value refers to the

• a. high value of an essential item and the low value of a nonessential item.

• b. high value of a nonessential item and the low value of an essential item.

• c. contradiction of what consumers want and what they need.

• d. contradiction between gross domestic product and market value.

A nation’s wealth is determined by its

• a. accumulation of all tangible and intangible resources.

• b. natural resources.

• c. accumulation of all tangible products.

• d. product possibilities frontier

Which of the following statements best describes the purpose of the production possibilities curve?

• a. It predicts the future production of a nation.

• b. It identifies trends in production.

• c. It shows which products are most profitable.

• d. It identifies all possible combinations of goods and services an economy can produce.

Which of the following descriptions best explains the meaning of opportunity cost?

• a. the initial cost of starting a new business

• b. the cost of business failure

• c. the cost of choosing one alternative over another

• d. the risk associated with producing a new item

Consumers waiting in long lines for a new product is an example of

• a. consumerism.

• b. consumer rights.

• C. consumer responsibilities.

• D. scarcity.

When a nation’s total output increases over time, the nation is experiencing

• a. a decrease in gross domestic product.

• b. economic growth.

• c. economic interdependence.

• d. an expansion of the possibilities curve.

The efficient use of scarce resources leads to an increase in

• a. productivity.

• b. investment.

• C. scarcity.

• D. capital.

When a business needs to decide whether a certain action is worth the cost, the most helpful analysis would be a(n)

• a. production possibility comparison.

• b. cost-benefit analysis.

• C. economic model.

• D. needs assessment.

The study of economics involves

• a. explaining how people deal with scarcity.

• b. studying how things are made, bought, sold, and used.

• c. explaining how incomes are earned and how jobs are created.

• d. all of the above.

Which of these statements describes a disadvantage of a traditional economy?

• a. Everyone knows his or her role.

• b. New ways of doing things are encouraged.

• c. New ways of doing things are discouraged.

• d. Difficult economic decisions are made by the state.