1.4 Test Review

When supply increases, the price ________

• increases

• decreases

• remains constant

• varies due to the government

When demand increases, what also increases?

• price

• supply

• scarcity

• opportunity cost

How does the concept of scarcity impact economic behavior?

• People can control what products are produced

• The opportunity cost of making decisions decreases

• The government can control what products are produced

• People are pressured to make choices about using their resources

What does scarcity do?

• Decreases the amount of profit companies are able to make

• Allows people to access unlimited resources

• Prevents people from getting everything that they want

• Increases the supply of particular products

What is opportunity cost?

• The value of what is lost when picking one choice over another

• the price of an item based on supply and demand

• The inability of the market to meet the needs of all of the people

• Motivation for businesses to produce certain goods or services

Which of the following is NOT true of a free market economy?

• Businesses can increase profits

• Businesses can compete for incentives

• Individuals can own private property

• Governments can set the price of goods and services

Hiring new employees is an example of which factor of production?

• Labor

• Capital

• Land

• Entrepreneurship

Tools used for the production of a good - such as hammers, nails, a saw - are examples of what factor of production?

• Labor

• Capital

• Land

• Entrepreneurship

Which level of industry would jobs including the health service, transportation, education, entertainment, tourism, finance, sales and retail be associated with?

• Primary sector

• Secondary sector

• Tertiary sector

• Quaternary sector

Programmers, IT specialists, technology developers, information sharing experts, and even professional bloggers are part of which level of industry?

• Primary sector

• Secondary sector

• Tertiary sector

• Quaternary sector