Economics Final Exam Review

Economics is the study of...

• productive technology

• consumption decisions confronting scarcity

• how society decides what, how, and for whom to produce

• the lose of interest in using savings

Because resources are limited...

• only the very wealthy can get everything they want

• firms will be forced out of business

• the availability of goods will be limited, but the availability of services will not

• people must make choices

What is the main idea behind the study of economics?

• Monetary policy

• Efficiency of production

• Allocation of scarce resources

• Business decisions

What is a basic economic issue for all societies?

• Scarcity

• Taxation

• Inflation

• Recession

Scarcity guarantees that....

• demand will exceed resources

• resources will exceed demand

• demands will be equal to resources

• most wants will be satisfied

The expression, "There's no such thing as a free lunch," implies that....

• everyone has to pay for their own lunch

• the person consuming a good must always pay for it

• trade-offs are incurred when resources are utilized

• no one has time for a good lunch anymore

A tradeoff is

• allowing the government and other organizes to choose for us

• sacrificing one thing for another

• deciding who consumes the products produced in an economy

• holding other variables fixed

In economic terms, what are land, labor, capital and entrepreneurship?

• Production possibility

• Factors of production

• Production tradeoffs

• Opportunity costs

The effort to coordinate the factors of production is a description of

• physical capital

• human capital

• labor

• entrepreneurship

True or False: The opportunity cost is the value of something that must be given up to acquire or achieve something else.

• True

• False