Unit 1 Test Review- Fundamentals

Which factor of production would lumber represent?

• outward, to the right
• Capital (physical capital)
• negative incentive
• Land (natural resource)

Which factor of production would an oven represent?

• government (also called central planners)
• Capital (physical capital)
• loss of productive resources or breakdown in technology
• mixed economy

What is another term for a "land" resource?

• Natural Resource
• profit
• Capital Resource
• economic growth; increase in resources and technology

In this type of decision, the marginal benefits exceed the marginal costs

• Rational Decision
• mixed economy
• soft skills
• Capital (physical capital)

Unlimited wants and limited resources- the basic economic problem

• Scarcity
• supply and demand
• Capital (physical capital)
• Natural Resource

an incentive that either increases costs, enforces penalties, or reduces benefits, resulting in a decrease in the activi

• first come, first served
• supply and demand
• negative incentive
• profit

allocates resources to those who are first in line

• outward, to the right
• first come, first served
• human capital
• Capital Resource

The most desirable alternative given up as the result of a decision (ex. Spending $10 on gas instead of the movies, the

• opportunity cost
• profit
• money/wages
• Capital Resource

In market economies, _________ ___ _________determines pricing.

• Natural Resource
• supply and demand
• money/wages
• soft skills

Who decides what goods and services will be produced in a command economy?

• outward, to the right
• government (also called central planners)
• economic growth; increase in resources and technology
• negative incentive