Test: Economic Systems

Why is scarcity and choice a basic economic problems for all countries?

• Because resources are sustainable, and people must choose which resources to produce
• Because resources are limitless, and people have unlimited choices that can cause confusion
• Because resources are not always available, and people must choose whether to produce more resources
• Because resources are always limited, and people must make choices by prioritizing their needs over their wants

How would scarcity and shortages most accurately be compared?

• Scarcity is controllable, while shortages cause serious economic problems.
• Shortages are avoidable because resources are limitless, while scarcity is unavoidable.
• Shortages are common to all societies, while scarcity only occurs in developing countries.
• Scarcity always exists and is a problem faced by all societies, while shortages are manageable.

Which country on the map faces scarcity in gasoline? What conclusions can be drawn from the map?

• Scarcity is only measured in natural resources.
• Scarcity only occurs in countries with large populations.
• Scarcity is a third world problem.
• Scarcity is not determined by the wealth of a given nation.

The BMW car in the picture is an example of what

• needs
• shortages
• resources
• wants

Which factor of production is a teacher representing?

• capital
• resources
• physical capital
• labor

Which factor of production does a business owner buying a new piece of equipment represent?

• Human capital
• Entrepreneurship
• Land resources
• Physical capital

Which factor of production is conserved through the use more efficient machinery?

• Knowledge
• Entrepreneurship
• Human capital
• Labor

You are deciding which college to go to. You can go to LMU which will offer you more scholarships or you can go to UT which is a more prestigious school. What economic concept is being illustrated in this example?

• You determine the efficiency of choosing LMU or UT and decide which is most desirable for you.
• You determine the marginal cost of choosing LMU or UT and decide which is most desirable for you..
• You determine the profitable alternative of choosing LMU or UT and decide which is most desirable for you.
• You determine the opportunity cost of choosing LMU or UT and decide which is most desirable for you..

Which of the following accurately fills in the missing entry in the chart?

• Alternative factor
• Additional benefit
• Factor of production
• Opportunity cost

Which of the following is NOT one of the three basic economic questions?

• What goods and services should be produced?
• Who consumes goods and services?
• When should the goods or services be consumed?
• How should goods and services be produced?