Unit 1 Economics

Economics is the study of

• the distribution of surplus goods to those in need

• affluence in a morally bankrupt world

• ways to reduce wants to eliminate the problem of scarcity

• the choices we make because of scarcity

Human capital is

• machinery that meets or exceeds federal safety standards for use by humans

• all capital owned by individuals or corporations, but not by governments

• the skill and knowledge of workers

• all capital owned by individuals, but not by corporations or governments

When the price is higher than the equilibrium price,

• buyers desire to purchase more than what is produced

• quantity demanded equals quantity supplied

• a surplus will exist - sellers produce more than buyers wish to purchase

• a shortage will exist

The law of demand implies that, other things remaining the same,

• as demand for cheeseburgers increases, the price of cheeseburgers will fall.

• as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will increase.

• as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will decrease

• as income increases, the quantity of cheeseburgers demanded will increase.

Which of the following is NOT an economic question regarding production?

• what to produce

• why do incentives affect marginal costs

• for whom to produce

• when to produce it

All of the following is a principle of capitalism EXCEPT

• involuntary exchange

• private property

• competition

• profit motive

Which of the following factors will cause a shift in the Supply Curve?

• An editorial in the newspaper that predicts a downturn in the economy

• The shrinkage of the labor market

• Government regulations, taxes, or subsidies

• The ability of consumers to substitute the desired good with other things

Scarcity is a situation in which ___.

• something is being wasted.

• we are unable to satisfy all our wants

• long lines form at gas stations

• some people are poor while others are rich

This image is an example of

• a good

• a production

• an allocation of limited resources

• a service

Entrepreneurs do all of the following EXCEPT

• come up with ideas about what, how, when & where to produce

• organize land, labor, and capital

• bear the risk from business decisions

• apply for patents with the federal government