Economics Test #1

What does macroeconomics study?

• How individuals make choices

• How businesses operate

• How an entire economy functions

• How households budget

What does the principle of scarcity imply?

• Resources are unlimited

• All resources are limited

• Resources are only limited in certain areas

• Resources are always available

What are the factors of production?

• Land, Technology, Dirt, Resources

• Land, Labor, Capital, Entrepreneurship

• Land, Labor, Entrepreneurship

• Resources used in the production of only services

The factor of production that includes natural resources is known as:

• Land

• Labor

• Capital

• Entrepreneurship

_________ are the raw materials for most of the things we use.

Water is classified as renewable because it ​ ​ ​ ​ (a)  

• is not affected by human consumption
• is only found in certain parts of the world
• is a resource that can be replenished quickly
• in a nonrenewable resource

Fossil fuels are classified as nonrenewable resources because they -

• Are constantly replenished by nature
• Cannot be replaced within a human lifespan
• Have no impact on the environment
• Are easily extracted from the earth

The things needed to produce: Land, Labor, Capital, Entrepreneurship

• Factors of Production

• Human Resources

• Capital Goods

• Factors of Economics

The money left over after expenses are paid

• Capital

• Incentive

• Scarcity

• Profit

What is Economics?

• The study of how people make rational self-interest choices in using unlimited resources to satisfy limited wants and needs

• The study of how people, when faced with scarcity, make irrational choices

• The study of how people, when faced with scarcity, make rational self-interest choices in using limited resources to satisfy wants and needs

• The study of economic choices