Econ Chapter 1 Review

Economics use the word utility to describe the satisfaction one receives from a good

• True

• False

A rationing device is a method used to resolve who gets what of available goods and resources

• True

• False

According to Economists, one of the four broad categories of resources is Money

• True

• False

Economists sometimes refer to the LAND category as Natural Resources

• True

• False

The slope of a nonlinear curve varies from one point to another point

• True

• False

Entrepreneurship is...

• the talent for organizing the use of land, labor and capital, among other things

• skill in influencing government regulators and legislators

• accumulated technical knowledge in using labor and capital

• knowledge of the particular natural resources to be found in a given area

The physical and mental talents people bring to production processes comprise the resource called

• Entrepreneurship

• Natural Resources

• Capital

• Labor

The opportunity cost of attending college is

• the money one spends on college tuition, books, and so forth

• the highest valued alternative one forfeits to attend college

• the least valued alternative one forfeits to attend college

• equal to the salary one will earn when one graduates from college

Here are three things you could do if you do not attend your economics class:

watch television with some friends (you value this at $25),

read a good book (you value this at $17),

or go to work (you could earn $20 during the economics class).

The opportunity cost of going to your economics class is

• $20, because this is the only alternative of the three where you would actually receive a monetary payment

• $17 because this is the lowest value alternative forfeited

• $25 because this is the highest valued alternative forfeited

• $62 because this is the total dollar sum of all options

Which of the following is an example of a positive economic statement?

• The U.S. public should devote more resources to education

• The poor should pay lower taxes and the rich should pay higher taxes.

• Soap operas should be taken off television

• If you drop a ball from the top of a building, it will fall to the ground