Foundations of Economics Review

SCARCITY is a condition that:

• exits only in POOR nations

• only POOR countries experience

• ALL people have to deal with

• rich people NEVER deal with

If a barrel of crude oil is used to make gasoline, the opportunity cost would be...

• the price you pay for the gasoline

• the price of the crude oil

• value of anything else you could have made besides gasoline

• the gasoline produced

an efficient economy...

• has few people not working for a living

• uses its resources to make the most goods & services

• ensures safety of all citizens

• always creates the newest technology

Hammers, computers, phones, buildings, a grill, would all be examples of...

• land

• labor

• capital

• entreprenuers

Which type of economy has NO government involvement?

• free market

• communism

• socialism

• traditional

On a production possibility graph, any point ON the frontier line would be considered....

• underproduction

• efficiency

• growth

• income

timber, water, fruits & veggies would be considered...

• labor

• land

• entrepreneurs

• capital

What is the main goal of a socialist economy?

• individual control of the market

• economic equity & fair distribution of wealth

• total government control of all resources

• money over everything

Entrepreneurs...

• never take risks

• enter into business for charity

• organizes the factors of production to produce output

• control business under a command system

How would an economy or business get to a point above the frontier line on a production possibility graph?

• improvements in technology or new resources acquired

• decline in employment numbers

• government intervention

• using all the resources you currently have