Economics Unit I test

Economics is the study of:

• choices

• the physical and natural world through observation and experimentation.

• the history of human societies and cultures.

• the art and science of designing buildings.

Scarcity is defined as the limited availability of resources to meet unlimited wants. Which of the following is an example of scarcity?

• A desert having no water

• A library full of books

• A city with abundant food supply

• A beach with plenty of sand

Identify what are Goods, Services, and Products.

• Goods are tangible items, Services are intangible activities, and Products can be either.

• Goods are intangible items, Services are tangible activities, and Products are always tangible.

• Goods and Services are the same, Products are different.

• Goods, Services, and Products are all intangible.

Which of the following best describes the Factors of Production?

• Land, Labor, Capital, and Entrepreneurship

• Money, Machines, Materials, and Management

• Planning, Organizing, Leading, and Controlling

• Supply, Demand, Price, and Quantity

An Entrepreneur is defined as:

• A person who organizes and operates a business, taking on financial risks to do so.

• A person who works for a company and receives a salary.

• A person who invests in stocks and bonds.

• A person who manages a team within a corporation.

Financial capital is:

• a type of physical asset

• a measure of economic value

• a form of currency

• a type of investment

What is the difference between Opportunity Cost versus Opportunity Benefit?

• Opportunity Cost refers to the potential benefits an individual misses out on when choosing one alternative over another, while Opportunity Benefit is the gain received from the chosen alternative.

• Opportunity Cost is the gain received from the chosen alternative, while Opportunity Benefit refers to the potential benefits an individual misses out on when choosing one alternative over another.

• Opportunity Cost and Opportunity Benefit are the same and can be used interchangeably.

• Opportunity Cost is a financial term, while Opportunity Benefit is a psychological term.

A trade-off involves giving up one thing in return for another. What are the two resources you are not giving up in a trade-off?

• Time and money

• Effort and opportunity

• Resources and benefits

• Choices and alternatives

What does “Making Choices at the Margin” mean?

• It refers to making decisions based on the additional benefit vs. the additional cost.

• It means making choices without considering any costs.

• It is about making choices that do not involve any trade-offs.

• It refers to making decisions based on past experiences only.

Identify all of the points on a Production Possibilities Curve. What does it mean when you move from one point of the curve to another point?

• It means there is a change in the allocation of resources.

• It means the economy is producing at an inefficient level.

• It means there is no opportunity cost involved.

• It means the production capacity has increased.