Economics Unit 1 test

What condition is necessary in order for scarcity to occur?

• A lack of resources to satisfy wants.

• Supply must exceed demand.

• The prices for goods must steadily increase.

• The prices for goods must steadily increase.

What are the four factors of production?

• and, labor, supply, and demand

• entrepreneurship, labor, monopoly, competition

• supply, demand, monopoly, and competition

• land, labor, capital, and entrepreneurship

What type of economic system is used in communist nations?

• capitalist

• command

• market

• socialist

According to the law of diminishing return, if a company continues to hire more people but does not increase any of the other factors of production, what will happen?

• The company's output will jump at first but will then steadily decrease.

• The company will be more productive in the long run.

• The company will stay in business for a long time.

• he company's output will intially decrease but will go up in the long run.

Which is an example of a natural resource?

• trucks

• boxes

• robots

• water

Which economic system is a fascist government most likely to have?

• command economy

• market economy

• mixed economy

• traditional economy

A county decides to create a new after-school program instead of expanding trash pickup on county roads. What is an opportunity cost of this decision?

• a cleaner community

• the after-school program

• teacher's pay

• new county roads

How are capital goods and consumer goods different?

• Capital goods are rare, high priced items; consumer goods are common, affordable items.

• Capital goods are imports from foreign countries; consumer goods are produced domestically

• Capital goods are used to make other products; consumer goods are finished products.

• Capital goods are made from recycled materials; consumer goods are made from new materials.

A small business owner is an example of what factor of production?

• land

• labor

• capital

• entrepreneurship

A farm is an example of what factor of production?

• land

• labor

• capital

• entrepreneurship