Eco - Chapter 1 - What is Economics?

The need to make choices arises because

• some things are not limited
• shortages are constant situation
• everything that exits is limited
• people need to share their resources

The basic problem of economics is

• scarcity
• shortages
• lack of choice
• overabundance of resources

To an economist, a want is

• something you do not have
• something you must have to survive
• someething other than a basic survival need
• something most people have

The four factors of production are the resources of land, labor, capital, and:

• productivity
• entrepreneurship
• technology
• services

As an economic term, land includes:

• work people do
• machinery
• natural resources
• knowledge

What trade-off is involved when you buy a CD?

• exchanging time for money
• exchanging money for goods
• exchanging one service for another
• exchanging goods for services

In a trade-off, opportunity cost is the value of the:

• factors of production
• scarce resources
• action that was chosen
• next best alternative

The amount of military goods given up in a year is the opportunity cost for producing:

• more weapons
• a balanced budget
• more civilian goods
• a production possibilities curve

Which of the following describes what economist do?

• predict which policies will be good or bad
• offer solutions to economic problems
• consider every detail of a problem
• rely on public opinion

Economics is the study of how people:

• calculate their income tax
• choose from limited resources to meet their needs
• respond to war and drought
• gain knowledge and skills from study and experience