Unit 1 Basic Economics Hudspeth

What is the fundamental problem of economics? 

• How to keep consumers out of debt?
• How to fulfill our unlimited wants and needs with limited resources?
• How to figure out the way to make the most money?
• How do we ensure all people get a college education?

Opportunity Cost is best defined as

• What you give up when you choose something

• The price you pay to purchase something

• The benefit you gain by making a decision

• The amount of debt you take on by making a decision

Soil, minerals, air, water, and coal are all examples of

• Fossil fules
• Conservation
• recycling
• natural resources

A person that takes a risk by starting a new business.

• human capital
• capital goods
• entreprenuer
• tariff

Antonio has an Economic test tomorrow and knows that if he stays up and studies until 11 p.m. he has a good chance of making an A on the test.  However he is really tired and knows that if he goes to bed at 10:00 p.m. he can easily make a B on the exam.  What is Antonio's opportunity cost if he goes to bed at 11:00 p.m.

• An A on the exam 
• making a B on the exam 
• Losing one hour of sleep
• gaining one hour of sleep

 The difference between a good and a service is that:

• Goods are available in unlimited quantaties and services are not 
• Goods are tangible and services are not 
• Services are available in unlimited quantaties and goods are not 
• goods help satisfy unlimited wants and services do not

What is the major difference between scarcity and a shortage? 

• They are really the same
• Shortages always exist and scarcity is temporary 
• Shortages are temporary and scarcity always exist. 
• Scarcity is limited and shortages are unlimited 

What term describes the tools and technology used to make a product?

• capital

• human capital

• exports

• imports

How do you satisfy your unlimited wants in a world of limited resources?

• by making more money
• by making choices
• by stealing
• by setting a budget

What does a production possibility curve show?

• The prices of two types of products being produced
• The quantity of capital and consumer goods that people would like to be produced
• The maximum combination of two types of goods that can be produced with given resources.
• The relative profitability of capital and consumer goods