Fundamental Concepts

Scarcity is defined as a limited supply of resources and...

• limited wants for those resources

• unlimited resources

• limited resources

• unlimited wants for available resources

What is opportunity cost?

• the value of the next best option that is not selected when a choice is made.

• there is not enough of it.

• things people make to earn money.

• actions people do to earn money.

Michael has been invited by a friend to go fishing on Friday. His parents are going to a concert. Michael chooses to go fishing with his friend. What is his opportunity cost?

• fishing with a friend

• going to a concert

Ashton tried our for cheer leading and made the varsity team. She can choose to cheer for football or basketball. She chooses to cheer for football, what is her opportunity cost?

• to cheer for football

• to cheer for basketball

Which of the following is a negative incentive?

• increase wages will increase hours

• makes people better called "rewards"

• lower interest rates

• decrease wages - less incentive to work

What is the process of evaluating marginal benefits (MB or gains) of a decision against marginal costs (MC or costs) of a decision, based on the assumption that the selected decision is one in which MB > MC?

• Irrational Choices

• Thinking at the Margin

• Rational Decision Making

• Investing

A buy one get one free sale at a shoe store is an example of what economic concept?

• incentive
• profit
• choice
• opportunity cost

Gold and oil can be seen as:

• Natural resources

• Labour

• Capital

• Entrepreneurship

Identify the correct factor of production.

Individuals with great ideas and willing to take risks.

• Natural resources

• Labour

• Capital

• Entrepreneurship

Identify the correct factor of production.

Machinery and factories are?

• Natural resources

• Labour

• Capital

• Entrepreneurship