Econ Mastery Test 1

What is the concept of TINSTAAFL?

• There is nothing greater than what you have right now.

• There is never a greener lawn than your neighbor's.

• There is nobody that loves you more than your mother.

• There is no such thing as a free lunch.

What term means not enough to satisfy unlimited wants?

• Goods

• Scarcity

• Services

• Opportunity Cost

• Trade-Offs

What term means the second best alternative that must be given up to get something

• Goods

• Scarcity

• Services

• Opportunity Cost

• Trade-Offs

What are land resources?

• Factories, equipment, and machinery used for production

• Money in banks used for business investment

• Soil, mineral deposits, forests and other raw materials

• Workers and managers who produce goods & services

What is marginal cost?

• Total cost

• Extra or additional cost of producing one more unit of a good

• Revenue

• Profit

In a command economy, consumers answer which of the 3 questions of economics?

• What to produce?
• How to produce it?
• For whom to produce?
• None of these choices are correct

The inverse relationship between price and quantity that describes what consumers will buy is

• Substitution Effect
• Law of Demand
• Law of Supply
• Law of Diminishing Marginal Utility

The substitution effect allows consumers to more likely purchase a similar product because   

• It is more expensive
• It will decrease their income
• Their demand equals supply
• It is less expensive

A demand curve shows:

• Only the income that a consumer can use
• Contains quantities that producers are willing to sel
• Consumers buy more at higher prices
• Consumers will want more quantities at lower prices

What is market equilibrium?

• Producers produce as much as they want

• Quantity supplied equals quantity demanded

• Demand exceeds supply

• Quantity demanded equals quantity demanded