(Practice) Quiz Unit 1 Fundamentals

The basic economic condition that exists when unlimited wants exceed limited productive resources is called

• scarcity

• opportunity cost

• capital

• trade-off

A restaurant purchases new kitchen equipment. This is an example of an investment in:

• natural resources

• labor

• land

• capital

Which of the following is NOT a factor of production?

• marginal cost

• entrepreneurship

• labor

• land

When a trade-off is made, an economist would BEST define the opportunity cost as:

• switching to different criteria

• providing the capital needed after making a decision

• giving up the benefit of the next best alternative

• acquiring the labor needed to fulfill a decision

Mary has to decide between going to the movies with friends or staying home and studying for an exam. She chooses to stay home and study. What is her opportunity cost in this situation?

• saving $20.00

• going to the movies

• making a good grade on her exam

• losing sleep

Which of the following are the 3 basic questions all economies must address regarding resources?

• what? how? for whom?

• why? what? how?

• when? why? how?

• for whom? when? what?

Which of the following does C.E.L.L. (factors of production) answer?

• What should be produced?

• How should it be produced?

• When should it be produced?

• For whom should it be produced?

In a command economy, how are resources allocated?

• lottery

• first-come, first-served

• authority

• contest

Which type of economic system has the MOST consumer sovereignty?

• market

• command

• traditional

• mixed

A mixed economy has elements of what two types of economies?

• traditional and command

• market and traditional

• command and market

• socialist and traditional