Economics Chapter 1

Scarcity arises because all societies have

• limited productive resources to satisfy unlimited wants
• unlimited productive resources to satisfy limited wants
• limited needs and unlimited wants
• unlimited needs and limited wants

Economics is the study of how

• gov't allocates scare resources to satisfy people's unlimited wants.
• gov't supplies money to businesses to produce goods & services.
• people use their scarce resources to satisfy their unlimited wants.
• businesses supply unlimited goods & services with limited resources.

The opportunity cost of a chosen item or activity is

• the money you must give up to buy it
• the value of all alternatives you must pass up
• The value of the best alternative you must pass up.
• the money you lost by not choosing the least expensive option.

___ is the physical & mental effort used to produce goods & services.

• Labor
• Revenue
• Behavior
• Marginal

The fundamental condition of economics that results from the combination of limited resources and unlimited wants.

• Scarcity

• Productivity

• Microeconomics

• Macroeconomics

The value lost by rejecting one use of resources in favor of another.

• Opportunity Cost

• Production Possibilities Curve

• Factors of Production

• Capital Good

A graphic representation showing all of the possible combinations of two goods or services that can be produced in a stated period, assuming that the amount of available resources and technology will not change during the period, and that all of the national, human, and capital resources involved are being used in the most efficient manner possible.

• Production Possibilities Curve

• Opportunity Cost

• Productivity

• Factors of Production

Who is the Father of Modern Economics?

• Ragnar Frisch

• Adam Smith

• Marshall

• None of these.

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

• productivity

• goods

• entrepreneurship

• services

As an economic term, land includes __________________.

• work people do

• natural resources

• machinery

• knowledge