Fundamentals Rev 1

What is the most basic problem of economics?

• Scarcity
• Allocation
• Productivity
• Specialization

What is it called when you choose between two possible uses for a resource, giving up one alternative for another?

• Trade Offs
• Real Costs
• Building materials
• Trading spaces

A popular bakery has only a few ingredients left to make their products.  They could bake muffins or cookies, but they can’t make both.  The bakers decide to make cookies for their customers.  What is the opportunity cost of their decision?

• muffins 
• cookies 

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

If a point lies on the curve this means the company is being efficient. If a point lies inside the curve, this tells the company what?

• They are being over efficient
• They are not efficient
• It is impossible
• None of the above

SSEF1(d) The opportunity cost of shifting production from "Point E" to "Point C" would be:

• 30 cans of cola
• 30 chocolate bars
• 70 cans of soda
• 20 chocolate bars

If a natural disaster strikes, where would a production possibilities curve most likely shift

• No shift

• inward (as seen in Case 1)

• outward (as seen in Case 2)

• all of the above

Which phrase could be used to describe a PPC shifting outward?

• Resources wasted or idle
• Economic Growth
• Inefficient use of resources
• A decrease in demand for a product

In which economic system is the protection of private property rights essential?

• Command

• Traditional

• Market

• Socialism

In which economic system does the government answer all three of the big economic questions? (What to produce? How to produce? For whom to produce?)

• Command

• Socialism

• Market

• Traditional