Fundamentals Part I Quiz Review

A rational decision maker:

• ignores marginal changes and focuses instead on "the big picture".

• ignores the likely effects of government policies when he or she makes choices.

• takes an action only if the marginal benefit of that action exceeds the marginal cost of that action.

• takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions.

MagnaFlare is a corporation that makes road flares. One of the primary components of a MagnaFlare is ground magnesium. How would the magnesium ore, from which ground magnesium is made, be classified as a factor of production?

• Capital
• Land
• Entrepreneurship
• It is not a factor of production, it is a product.

When wants exceed resources is known as

• Rational Decision
• Entrepreneurship
• Scarcity
• Productive resources

Profit, Job creating, innovation and improving society motivate people....

• To go to work
• Stay at home and not go to work
• Get an Education
• Become an Entrepreneurs

What is the basic problem that all economies must deal with?

• How to satisfy limited wants with limited resources

• How to satisfy limited wants with unlimited resources

• How to satisfy unlimited wants with limited resources

• How to satisfy unlimited wants with unlimited resources.

Which of the following is NOT one of the 3 Economic questions?

• What to produce

• Whom to produce for

• How to produce

• When to produce

A bulldozer is an example of...

• Land
• Labor
• Entrepreneurs
• Capital

Capital refers to...

• The "gifts of nature" or natural resources not created by human effort.

• people with all their efforts and abilities

• the tools, equipment, and factories used in production of goods and services

• individuals who start a new business or bring a product to market.

Labor refers to...

• people with all their efforts and abilities

• individuals who start a new business or bring a product to market.

• the tools, equipment, and factories used in production of goods and services.

• The "gifts of nature" or natural resources not created by human effort.

Susan offers to trade her old iPod for Claudia's cell phone and Claudia accepts. Assuming both products work perfectly, we can conclude that
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• Claudia is now happier than Susan.
• neither party has gained because the exchange was fraudulent
• both people have gained because the exchange was voluntary and non-fraudulent
• Susan places the same value on cell phones as she does for iPods