EST Economic Feb Test 1

Which of the following best describes what we mean by resources in economics?

• Natural resources like natural gas and trees

• The factors used to produce goods and services

• Human resources like workers

• The ability to handle a situation

• Monetary wealth

When a government decides only people who have paid an annual fee will get certain services, such as firefighting services, which of the three economic questions does it answer?

• Who should get the goods produced?

• Is it fair to deny services?

• How should it be produced?

• What should be produced?

• Is this a good way to allocate services?

Economics may best be defined as a

• scientific study of supply and demand.

• study of efforts to satisfy seemingly unlimited wants with scarce resources.

• limited description of economic activities.

• branch of sociology.

A basic requirement for survival is a(n)

• need.

• want.

• opportunity cost.

• paradox of value.

An economic system is successful when it

• creates a large number of wealthy people.

• maintains normal unemployment levels.

• controls government agencies.

• satisfies the needs of its people.

An entrepreneur would most likely have the best chance for success in

• a command economy.

• a market economy.

• a traditional economy.

• any of the economies.

Changes in a market economy tend to be

• revolutionary.

• prohibited.

• gradual.

• discouraged.

Which term is used to describe the study of how people make decisions in a world where resources are limited?

• scarcity

• decision-making modeling

• economics

• cost-benefit analysis

According to economic theory, when does scarcity occur?

• when a society has more resources than it needs to produce goods and services

• when there are not enough resources to produce all of the things a society would like to have

• when inflation occurs and demand for goods and services decreases

• when inflation occurs and demand for goods and services increases

When deciding between renovating a water treatment plant or building a new community pool, what is the government most likely to consider?

• scarcity vs. resources

• wages vs. prices

• wants vs. needs

• consumers vs. producers