Economics Chapter 1 Quiz

What is the law that states, as we shift factors of production from making one good or service to another, the cost of producing the second item increases?

• Law of increasing costs

• Absolute advantage

• Law of diminishing returns

• Scarcity

What are natural resources that are used to make goods and services called?

• Labor

• Goods

• Land

• Capital

What is a person who purchases goods and services for personal use called?

• Capital

• Consumer

• Labor

• Producer

What are physical objects such as clothes or shoes called?

• Consumer

• Services

• Labor

• Goods

What are actions or activities that one person performs for another called?

• Labor

• Services

• Scarcity

• Goods

What is the term for limited quantities of resources to meet unlimited wants?

• Capital

• Utility

• Economics

• Scarcity

What is a person, company, or country that makes, grows, or supplies goods or commodities for sale called?

• Producer

• Services

• Entrepreneur

• Consumer

What is an ambitious leader who combines land, labor, and capital to create and market new goods and services called?

• Labor

• Producer

• Entrepreneur

• Consumer

What is using fewer resources than an economy is capable of using called?

• Underutilization

• Incentives

• Efficiency

• Scarcity

What are the three groups of resources that are used to make all goods and services called?

• Land, labor, and capital

• Opportunity cost, incentives, and efficiency

• Microeconomics, macroeconomics, and economics

• Cost-benefit analysis, factors of production, and scarcity