Topic 1 Quiz

What are the three main factors of production?

• Land, labor, capital

• Goods, services, money

• Needs, wants, resources

• Supply, demand, price

What are the two types of capital?

• Physical and human

• Financial and natural

• Tangible and intangible

• Fixed and variable

What is an example of physical capital?

• Machinery

• Employee skills

• Financial investments

• Natural resources

What is the role of entrepreneurs in the economy?

• To innovate and create businesses

• To consume goods and services

• To provide labor

• To regulate markets

Define trade-offs.

• The act of giving up one benefit in order to gain another

• The cost of the next best alternative

• The total benefit received from a decision

• The process of making a decision

What is an example of an individual decision?

• Choosing a career

• Setting national policy

• Launching a new product

• Regulating trade

Define opportunity cost.

• The value of the next best alternative given up

• The total cost of all alternatives

• The benefit received from a decision

• The process of evaluating options

What is "marginal cost"?

• The total cost of all units

• The cost of producing one more unit

• The cost of the first unit

• The average cost of all units

What does "cost/benefit analysis" help with?

• Ignoring costs

• Making informed decisions

• Focusing on benefits only

• Avoiding decision-making

Why is "marginal cost" significant in economics?

• It determines total cost

• It assesses the cost of one more unit

• It ignores additional costs

• It focuses on past costs