PFLE: Unit 1

Which of the following best illustrates the concept of scarcity?

• A student with unlimited time to complete an assignment

• A government with unlimited funds for social programs

• A farmer with limited land who must choose which crops to plant

•  A company that produces more goods than consumers demand

In almost every society, the problem of scarcity must be dealt with because-

• resources are limited

• governments tend to overspend on the military.

• goods are distributed evenly.

• farmers tend to overestimate their crop yields.

When an individual chooses to attend college full-time rather that work full-time, what represents the opportunity cost of this decision?

• The tuition and fees paid to the college

• The time spend studying for exams

• The incomes that could have been earned from working full-time

• The stress associated with academic performance

Which of the following is a non-price determinant of demand?

• Production technology

• Number of sellers

• Consumer Income

• Input costs

What role does government play in the circular flow model?

• Collects taxes from people only.

• No money is exchanged between the government and businesses.

• The government doesn't participate in the model.

• The government can be both a consumer and a producer.

If the government stopped producing helicopters for the U.S. military, what would happen to the local economy where they were being built?

• There would be in increase in income to local households.

• There would be a decrease in income to local households.

• People there would have more purchasing power.

• There would be a decrease in unemployment.

The role of resource owners and firms in a circular flow model of the economy are--

• independent of one another.

• only for domestic and never international markets.

• interdependent of one another/work together.

• never impacted by actions of the government.

Which explanation below best describes the Circular Flow Model of Economics?

• How resources, money, goods, and services flow through and economy.

• The production of more goods and services in an economy.

• The ongoing creation of jobs in the economy.

• The ability of banks to loan money to boost the economy and encourage spending.

The law of demand argues that as prices rise-

• the quantity demanded will fall.

• the quantity demanded will rise.

• the demand curve will shift to the right.

• the demand curve will shift to the left.

If businesses can increase the amount of productivity to increase inventories, the result will most likely be-

• decreased productivity.

• economic growth.

• increased inflation.

• increased taxes.