Chapter 1 Economics Test

What is the special talanet that some people have for finding new business opportunities and for developing new products and new ways of doing things?

• entrepreneurship

• incentive

• intangible good

• opportunity cost

Which of the following is a diagram that shows three economic concepts?

• flow chart

• bar graph

• production possibilities frontier

• table

Which of the following refers to the mental and physical talents that people contribute to the production of goods and services?

• entrepreneurship

• capital

• land

• labor

Which of the following encourages people to take action?

• disincentive

• interest

• incentive

• marginal

What do economists use to explain how something works and to answer a question that does not have an obvious answer?

• labor resources

• opportunity cost

• marginal thinking

• theories

Which of the following is a land resource?

• iron ore

• a forklift

• a computer used for bookkeeping

• a salesman

Which of the following is the condition where people's wants are greater than the resources available to satisfy those wants?

• opportunity cost

• rationing

• scarcity

• entrepreneurship

Because of scarcity, what must people do?

• earn profits

• be motivated

• make choices

• determine wants

What determines who gets what and how much they get?

• a rationing device

• scarcity

• opportunity cost

• tangible goods

What do economists believe that people think about when they make decisions?

• incentives

• trade offs

• utility

• marginal costs and benefits