Chapter 1 Economics Test

Paradox Value refers to the 

• high value of non essential items and the low value of essential items

• high value of an essential item and the low value of a nonessential item

• contradiction of what consumers want and what they need

• contradiction between gross domestic product and market value

A nations wealth is determined by 

• accumulation of all tangible products

• accumulation of all tangible and intangible resources

• natural resources

• product possibilities frontier

The most comprehensive measure of a nations wealth is provided by its 

• capital goods

• gross domestic product

• product possibilities curve

• TINSTAAFL rating

Which of the following statements best describes the purpose of the production possibilities curve?

• It shows which products are most profitable 

• It identifies trends in production

• It predicts the future production of a nation

• It identifies all possible combinations of goods and services an economy can produce

Which of the following descriptions best explains the meaning of opportunity cost?

• initial cost of starting a new business

• the cost of choosing one alternative over another

• the cost of business failure

• the risk associated with producing a new item

Consumers waiting in long lines for a new product is an example of 

• Consumer rights

• Consumerism

• Scarcity

• Consumer responsibilities

When a nations total output increases over time, the nation experiencing 

• Economic Growth

• An expansion of the possibilities curve

• A decrease in gross domestic product

• Economic Interdependence

The efficient use of scarce resources leads to an increase

• Productivity

• Investment

• Capital

• Scarcity

A car is an example of a 

• Durable Good

• Capital Good

• Nondurable Good

• Service

Which of the following helps determine somethings value?

• Utility 

• Beauty 

• Scarcity

• Both A and C