Unit 1 Practice Test

Which of these is not a basic economic question?

• What to produce?

• How to produce?

• For Whom to produce?

• These are all basic economic questions

The basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good.

• Scarcity

• Surplus

• Profits

• Income

A shortage of a resource, like water and corn in 2012, is considered

• Income

• Surplus

• Scarcity

• Profits

True or False: only gold or diamonds can be valuable due to scarcity, not knowledge or skills. 

• True

• False

What is the fundamental problem of economics?

• Pursuit of Happiness

• Scarcity

• Opportunity Cost

• Capital

The sacrifice involved when you make any decision is called...

• Alternative Costs

• Opportunity Costs

• Scarcity

• Factors of Production

Sleeping to study for a test is an example of an opportunity cost.

• True

• False

Opportunity costs can be valued only in money and not in things such as time or energy.

• True

• False

What are the four factors of production?

• Land, Labor, Capital, Entrepreneurship

• Land, Capital, Machine, Businesses

• Labor, Trade Offs, Opportunity Costs, Money

• Land, Labor, Equity, Entrepreneurship

What factor of production is this?

• Land

• Labor

• Capital

• Entrepreneurship