Economics Module 1 Review

A want is something people desire but can live without, while a need is something essential for survival. Which of the following best illustrates the difference between a want and a need, and how they relate to scarcity?

• A need is food, which is essential for survival, while a want is a new video game, which is not necessary. Scarcity means there are limited resources to satisfy both.

• A want is water, which is essential for survival, while a need is a new phone, which is not necessary. Scarcity means there are unlimited resources.

• A need is a new car, which is essential for survival, while a want is air, which is not necessary. Scarcity means resources are always available.

• A want is shelter, which is essential for survival, while a need is candy, which is not necessary. Scarcity means there are more resources than people need.

Identify the economic concept at play in the following scenario: Knox has a big Algebra test tomorrow on which he must make a good grade in order to pass the class; he also has soccer tryouts after school tomorrow. He knows that if he doesn't practice soccer tonight, he might not make the team. He also knows that if he doesn't pass Algebra, his parents won't let him play soccer- even if he is good enough to make the team. Therefore, he decides to study Algebra until he feels confident about his ability to pass the upcoming test before he dedicates any time to soccer.

• scarcity analysis

• production factors

• cost-benefit analysis

• opportunity cost

An estimation of revenue and expenses over a specified period of time is known as a budget.

• True

• False

• Buy a new shirt and save the remaining money

• Stay home because she can't afford any of the other options

• Go to the movies and buy a new shirt

• Go to the movies and save the remaining money

What are land, labor, capital, and entrepreneurship collectively called?

• the supply and demand matrix

• the factors of production

• scarcity analysis

• the decision-making model

Which of the following would be considered a land resource?

• Petroleum

• An oil drilling rig

• A device for detecting earthquakes

• A country road

• Point F

• Point E

• Point C

• Point D

In order to build relationships among her teaching staff, Ms. Benton takes them on a two-day retreat out of town. She pays for their expenses and provides substitute teachers to cover their classes. Which of the following best demonstrates the "opportunity cost" of this retreat?

• student attendance rates, due to having substitute teachers

• cost of travel, including housing and food

• lost instructional quality for students left under substitute supervision

• chance for teaching staff to bond during the retreat

The cost added by producing or consuming one extra item of a product is best described as:

• Price

• Expense

• Marginal cost

• Opportunity cost

The fact that people's wants tend to be unlimited but that the resources we have available to meet these wants are limited is the basis of the economic concept of

• scarcity.

• insatiable needs.

• cost.

• goods production.