QUIZ - Economics 1.3

alternative choices

• opportunity cost

• production possibilities frontier

• trade-offs

• free enterprise economy

• standard of living

where consumers and privately owned businesses

answer the three basic economic questions

• opportunity cost

• production possibilities frontier

• trade-offs

• free enterprise economy

• standard of living

the quality of life based on the possession of the

necessities and luxuries that make life easier

• opportunity cost

• production possibilities frontier

• trade-offs

• free enterprise economy

• standard of living

the cost of the next best alternative when a choice

is made

• opportunity cost

• production possibilities frontier

• trade-offs

• free enterprise economy

• standard of living

diagram representing various combinations of goods

and services an economy can produce when all

resources are fully employed

• opportunity cost

• production possibilities frontier

• trade-offs

• free enterprise economy

• standard of living

Which of the following best describes the relationship between trade-offs and opportunity costs?

• Opportunity costs are incurred when trade-offs are made.

• Opportunity costs are the opposite of trade-offs.

  trade-offs are made.

• Trade-offs lower the opportunity costs of an economic decision.

• Trade-offs occur when there are no opportunity

  costs.

Imagine you decide to purchase a soccer ball for $35. Which of the following is an opportunity cost of

your decision?

• the time spent deciding to spend your money

• something else that could have been bought

• $35 in cash

• the time spent making the purchase and the tax paid on the ball

Which of the following is NOT a characteristic of a production possibilities frontier?

• It illustrates the concept of opportunity costs.

• It is based on full employment of all resources.

• It is used by economists as a tool for description and analysis.

• It indicates the ideal production levels for goods

  and services.

The study of economics helps people to

• become better decision makers.

• make wise choices for political candidates.

• understand the free-enterprise system.

• all of the above

Which of the following is NOT an example of economic decision making?

• writing a thesis

• building simple models

• using cost-benefit analysis

• taking small, incremental steps