ECON: Unit 1 Review (MicroECON)

Economics is the study of

• how society distributes its goods and resources.

• how society evaluates the financial information about the economy.

• how society distributes money and evaluates its effects.

• using its goods and services and analzying how much each good and/or service cost.

Goods are the tangible products that we want and/or need. Select an example of a good.

• Mowing the lawn

• Studying for AP exams

• Money

• Washing your car.

Services are actions that provide us with something that we want and/or need. Provide an example of a service.

• Money

• Food

• Internet

• Riding my bike and dropping off newspaper

Select the best term for the following definition:

The condition that forces us to make decisions about how to best use our resources to satisfy our wants and needs every second of every day

• Incentives

• Scarcity

• Factors of Production

• Economics

Select the best term for the following definition:

The value of the next best choice NOT chosen when making a decision

• Tradeoffs

• Entreneurship

• Opportunity Cost

• Economics

Tradeoffs identifies all of the options you are giving up, whereas the

opportunity cost involves evaluating the value of your next best choice.

• True

• False

Which example does not fit the definition of scarcity?

• Money

• Serving as an Uber driver as a part-time job

• Energy

• Gasoline

What is the relationship between scarcity and opportunity cost?

• Scarcity and opportunity cost are both the result of tradeoffs

• The reason we incur (experience) an opportunity cost is because of scarcity.

• Scarcity exists because of opportunity costs.

• Scarcity helps limit opportunity costs.

True/False: The Factors of Production are used to produce a good or a service.

• True

• False

Which is the term for the following definition: Natural resources and the raw materials that are used to produce goods and services.

• Land

• Labor

• Capital

• Enterpreneurship