Unit 1: CFA 1 (Standard 1) Review

Which of the following is an example of a natural resource used in production?

• A factory worker

• Coal

• A delivery truck

• A business owner

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What does the term "opportunity cost" mean?

• The money spent on a product

• The next best alternative forgone (given up)

• The total resources used

• The profit earned from a choice

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Which of the following is a method for allocating scarce resources?

• Sharing

• Recycling

• Advertising

• Borrowing

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Which of the following is considered a human resource?

• Oil reserves

• A skilled engineer

• A computer

• A patent

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Scarcity exists because:

• Resources are unlimited

• Wants are limited

• Unlimited wants exceed limited resources

• People do not want much

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A city has only 100 tickets for a popular concert, but 500 people want to attend. Which allocation method is used if tickets are sold to the first 100 people in line?

• Lottery

• First-come-first-served

• Authority

• Sharing

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A company must choose between investing in new machinery or hiring more workers. What is the opportunity cost if they choose to buy machinery?

• The cost of the machinery

• The additional workers they could have hired

• The profit from machinery

• The time spent deciding

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If a government allocates scarce water resources during a drought by allowing only people with medical needs to receive extra water, which allocation strategy is being used?

• Price

• Personal characteristics

• Contest

• Lottery

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A school has one scholarship to award and decides to give it to the student with the highest grades. Which allocation method is this?

• Majority rule

• Contest

• Sharing

• Force

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A family must decide whether to spend their savings on a vacation or a new refrigerator. If they choose the vacation, what is the opportunity cost?

• The money spent on the vacation

• The new refrigerator

• The time spent planning

• The enjoyment from the vacation

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