Unit 1 Review

What is a need according to the study of economics?

• Something that is desired but not essential

• Something that is essential for existence

• A luxury item

• An optional service

Which of the following is an example of a want?

• Food

• Shelter

• Air conditioner in a cooler climate

• Water

What is scarcity?

• Unlimited resources

• Limited goods and services

• Excess supply

• Abundance of resources

What is the role of advertising?

• To reduce consumption

• To suggest purchasing goods and services

• To promote savings

• To discourage spending

What are the three big questions societies must answer due to scarce resources?

• What to buy, where to buy it, and how much to pay.

• What to make, how to make it, and for whom to make it.

• What to sell, how to sell it, and who will sell it.

• What to consume, how to consume it, and why to consume it.

What is a key factor societies must consider when deciding for whom to produce?

• The cost of raw materials.

• The availability of technology.

• The distribution of resources.

• The demand for luxury goods.

What is one of the questions societies face regarding the production of goods?

• How to increase consumer demand.

• How to reduce environmental impact.

• How to balance quality and cost.

• How to expand international trade.

Which of the following is an example of a capital good?

• A beach

• A surgeon

• A commercial oven

• Sunshine

What is the role of entrepreneurs in the factors of production?

• They provide natural resources

• They contribute labor

• They organize and manage the other factors

• They supply capital goods

What does the term 'land' include in economics?

• Only farms and forests

• Only mineral deposits

• All natural resources not created by humans

• Only beaches and sunshine