Unit 1 Economics Test

Refer back to the Scarcity/Rational decision making activity. (G/V/E 1.1 &1.2 need 17/25) Part 1 Think of a situation when you have had to weigh opportunity cost when making a decision about something important. Part 1 A. What was the scarce resource? Part B. How were decisions made allocating that resource in the past? Part 2 Did you follow the same process in allocating that resource or did you find a more efficient way to allocate it? Explain and include the allocation strategies used in the past and in the current situation.

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The basic economic condition that exists when unlimited wants exceed limited productive resources is called LT 1-1

• Capital
• Scarcity
• Productivity
• Factors of production

How does the presence of Entrepreneurs help a country's economy? LT 1.3

• A) Entrepreneurs help create jobs
• B) Entrepreneurs help to create natural resources
• C) Entrepreneurs contribute to decreases in literacy rates
• D) Entrepreneurs contribute to embargos

What is the opportunity cost of saving money to purchase a car? LT 1-4

• A) The cost of working hard to save money
• B) The money you could have earned at a job
• C) The Cost of insurance, gas and maintenance
• D) The money could be used to go on vacation

When deciding whether to spend and additional hour studying or sleeping, Frank is engaged in what economic activity? LT 2-1

• A) bartering
• B) marginal analysis
• C) market transactions
• D) trade negotiations.

What is the desired positive incentive of non-distracted driving? LT 2-2

• A) You have lower insurance rates and fewer chances of wrecks.
• B) You are more aware of your surroundings and able to avoid speed- traps
• C) You will have higher insurance rates and more chances of wrecks
• D) You will be able to drive at faster speeds because you concentrate better

Methods available to societies as they seek to answer the "for whom to produce" question? LT 3.1

• A) government regulation
• B) public goods and services
• C) allocation strategies
• D) productivity

All of these are found in a command economy except ? LT 3-1

• A) minimum wage
• B) ownership of corporate stock
• C) environmental controls
• D) govenrment regulation of the economy

What kind of economy has the following characteristics? Decentralized decision making, adjust to changes in the market place and producers and consumers have control of the economy. LT 3-1

• A) Command
• B) Socialistic
• C) Market
• D) Traditional

Consumer Sovereignty assumes that which fundamental statement in a market economy is true? LT 3-1

• A) buyers should be able to name their own price for goods
• B) Through purchase choices, buyers determine the prouduction of goods