Economic Decision Making Quiz

People’s wants are unlimited. This fact means that which of the following is always present?

• scarcity

• costs of production

• marginal utility

• shortages

What are the factors of production?

• land, labor, and capital

• risk and opportunity

• wages, salaries, and profits

• goods and services

Ocean waves can be used to generate energy. Ocean waves are considered which type of resource?

• renewable

• perpetual

• nonrenewable

• capital

Which of these items is a measure of productivity?

• bushels of corn per acre

• dollars invested in new equipment

• years of education

• number of workers employed

Why are tradeoffs necessary?

• Advertisers promote products.

• Every product has flaws.

• Resources are limited.

• People want different things.

When Amy returns a good library book without finishing it so she won’t have to pay a late fee, what is her opportunity cost?

• paying for something else

• finishing the book

• reading a different book

• the wrath of the grumpy boomer librarian who is hard of hearing and shouts all the time. She has hearing loss and actually hates kids but she cant afford to retire so she took the job cause her social security payouts aren't enough.

Which scenario best illustrates the law of diminishing marginal utility?

• A car breaks down more often as it gets older.

• A collector of china figurines is eager to get a new one.

• Someone who doesn't listen to music does not care about getting a new CD.

• A new toy is less exciting to a child with many toys than to a child with just a few.

Suppose the country produces 3,000 bicycles. Estimate the maximum number of pairs of shoes it can produce with current resources.

• 60,000

• 20,000

• 40,000

• None. Its economy is a failure.