Economics(Ch1-3)-Review

What is the basic economic problem faced by all societies?

• achieving happiness

• an inefficient economic system

• rewarding factors of production

• scarcity of resources

Which product is most likely to be classified as a free good?

• birthday presents

• public transportation

• seawater

• government funded education

Which option is not an example of capital as a resource?

• computers

• factory

• machinery

• natural resources

What is the opportunity cost to the economy if the government decides to build a new motorway?

• the cost of relocating and compensating residents in order to build the motorway

• the money spent on building the motorway

• the other projects that could have been undertaken had the motorway not been built

• the overall cost to taxpayers of financing the motorway project

Why does scarcity exist?

• Each year workers tend to produce less than previously

• Machines wear out with time

• There are not sufficient resources to produce all the products people want

• There is a limit to people's wants

Why will scarcity continue to be a problem in the future?

• Prices will rise

• The quantity of resources will decline

• Wants will continue to increase

• World population will fall

Which of the following is a free good?

• vaccines provided by the state free of cost

• Products given away by a supermarket to attract customers

• Recycled paper

• Wind coming in from the sea

Which factor of production's function is to make decisions and take risks?

• Capital

• Enterprise

• Labour

• Land

Which type of factor of production is a road?

• Capital

• Enterprise

• LAnd

• Labour

A country produces 3000 new capital goods in a week. 500 of these replace worn out capital goods. What is the net investment made?

• 500

• 2500

• 3000

• 3500