Econ Review

Definition: all resources are limited

• scarcity

• trade off

• shortage

• market economy

Jeff wants his brother to do the dishes for him. He decides to offer his brother $5 a week to do the dishes. What is Jeff giving his brother?

• A tradeoff

• An incentive

• A coercive bribe

• An invisible hand

You purchase a non-refundable ticket to see a movie. Halfway through the movie you realize that it’s the worst movie you’ve ever seen. You decide to leave because you don’t want to waste your time. What economic concept best explains your decision to leave?

• trade makes people better off

• markets coordinate trade

• sunk cost

• scarcity

Definition: deciding how to spend one more unit of a resource

• opportunity cost

• thinking at the margin

• cost-benefit analysis

• economics

What 3 things must we know about an economy to identify the type of economy it is?

• birth rates, death rates, GDP

• production, distribution, and marketing

• how many businesses, what kind of businesses, and how well they are performing

• production, distribution, and consumption

All its core, economics is about studying

• choices

• dollars

• success

• businesses

To an economist, land means

• soil or dirt

• how many acres a business owns

• natural resources

• entrepreneurship

The Production Possiblities Frontier (PPF) measures

• the efficiency of the economy

• the number of shoes one economy can produce

• how many resources an economy has

You are tired of chewing your gum in class, so you stick it under your desk. You would probably never do this to your desk at home. Which economics concept explains this?

• opportunity cost

• scarcity

• Tragedy of the Commons

• market economy

In this type of economy, production is determined by tradition, ritual, or custom.

• traditional economy

• free market economy

• mixed economy

• command economy