Unit 1 Foundations of Economics

The major issue with economics around the world is which of the following concepts?

• disease

• scarcity

• transportation

• corrupt governments

What type of incentive would this picture represent?

• positive

• habitual

• police

• negative

What is the difference between "Macroeconomics" and "Microeconomics?"

• Macroeconomics deals with how we individually spend money and improve the economy in the United States.

• Microeconomics is the study of economics and trade on a global scale and how this impacts the United States.

• Macroeconomics studies global monetary issues like international trade and its impact on the United States.

• Microeconomics deals with how nations spend money, collect debt, and trade goods with other countries around the world..

Which of the following best describes the study of economics?

• It is the study of various aspects or branches of the study of human society, considered as an educational discipline.

• It is the is the study of past and future events that helped shape the world and America.

• It is the study of how people try to satisfy seemingly unlimited and competing wants through use of scarce resources.

• It is the scientific study of the human mind and its functions, especially those affecting behavior in a given context.

Manufactured goods needed to produce other goods and services are called which of the following?

• capital goods

• non-durable goods

• Gross Domestic Products

• consumer goods

Which of the following is the best characteristic of division of labor?

• assembly line production

• entrepreneurship

• a home craft business

• classroom education

Use the graph to answer the following question. Study the graph. Suppose this nation starts with producing all military goods. It then decides to produce a mix of civilian and military goods represented by point B. What represents the cost in military goods given up?

• the vertical distance from point A to point x

• the vertical distance between point x and point y

• the horizontal distance between point y and point z

• the horizontal distance between point z and point E

In the time period covered by the production possibilities curve, the company decides to make 4 gallons of red point. How many gallons of blue paint can the company make with the available time and resources?

• 3

• 2

• 8

• 6

The diagram shows the production possibilities curve for an economy. Which of the following is true if the economy is currently producing at point E?

• It is producing the maximum possible output given the scarcity of resources.

• It is devoting most of its resources to producing Good Y.

• It is not using its resources fully and efficiently.

• It can increase the production of Good X only if it decreases the production of Good Y.

An incentive is best described as which of the following?

• the opposite of a tradeoff

• it could be a reward but could not be a penalty

• it could be either a reward or a penalty

• it could be a penalty but could not be a reward