Economics Fundamentals sections 1-3

Economics is not the study of money; rather it is the study of

• the FED

• choices

• the federal budget

• interaction between microeconomic considerations and macroeconomic measures

Scarcity is

• is a man-made condition that afflicts only poor people and nations

• is a man-made condition that afflicts only the wealthy

• a naturally occuring condition that afflicts all individuals and nations

• a condistion that will be eliminated in our lifetime through the use of technology

Which of the following best describes the condition of scarcity?

• unlimited wants compel individuals and nations to choose how to best use their limited resources

• limited wants allow for man to choose resource use wisely

• limited resources encourage man to seek to satisfy limited wants

• unlimited FOP for all wants to be satisfied

What are the 4 Factors of Production (FOP)?

• land, labor, resources, profits

• rent for land, wages for labor, profit for capital, interest for entrepreneurship

• land, labor, capital, entrepreneurship

• land, labor, physical capital, financial capital

Entrepreneurs take risks because

• they want to earn a profit for themselves

• they feel morally obligated to provide G/S to their customers

• they feel obligated to provide benefits to their employees

• they want to be able to work from home

A farmer's plows and tractors are

• land

• physical capital

• financial capital

• labor

Manure produced by a farmer's cows is classified as which factor of production?

• physical capital

• financial capital

• labor

• land

Which of the following is not physical capital?

• a taxi driver's cab

• a pizza oven used in a pizza parlor

• wrenches used by a mechanic

• a sign language class completed by a teacher

An entrepreneur is an entrepreneur because he/she performs which of the following?

• an entrepreneur knows the difference between physical capital & financial capital, which is the only reason he/she is an entrepreneur

• uses the first 3 factors of production (land, labor, capital) to create a good or service

• because the entrepreneur is a self-proclaimed entrepreneur

• the only reason an entrepreneur is an entrepreneur is because he/she has excellent leadership skills

Opportunity Cost (OC) can be defined as

• your number 1 tradeoff when making a choice

• the number 2 alternative in your list of choices

• is the next best choice and one you didn't choose

• all of these examples describe opportunity cost (OC)