Economics - Unit 1

Economics is the study of ______________

• Money

• How to get rich

• Consequences and Punishments

• Choices

The idea that resources are limited; we don't have an unlimited supply of what we want

• scarcity
• supply
• demand
• inflation

True or False: Everything that is scarce requires a choice, and these choices always involve a tradeoff.

• True
• False

The second-best choice that we give up when a decision is made is called the _____.

• opportunity cost

• producer

• profit

• scarcity

A combination of vision, skill, ingenuity, and willingness to take risks that is needed to create and run a business. Someone who does this is called a(n) ____.

• Entrepreneur

• Laborer

• Economist

• Environmentalist

Which of these is NOT one of the three factors of production?

• labor

• land

• capital

• stocks

What is the production possibilities curve?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs

Efficiency is producing the maximum possible output from available resources

• True
• False

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing

What does point B represent?

• Production at greater than the country's minimum potential
• Production is less than the country's minimum potential
• Productive inefficiency
• Productive efficiency