Fundamental Economics

The study of economics is primarily concerned with:

• choices/decisions that are made due to lack of resources

• the impact of government policies on markets

• the behavior of consumers in a free market

• the role of technology in economic growth

In economics, the value of the next best alternative is called _________.

• Opportunity Cost

• Trade-off

• Marginal Cost

• Sunk Cost

True or False: If we had more resources, we could eliminate scarcity.

• True

• False

• Maybe

• Not Sure

Raw materials (i.e. cotton, oil...etc.) are classified under which category?

• Land

• Labor

• Capital

• Entrepreneurship

Who wins in voluntary, non-fraudulent trade?

• only the seller

• only the buyer

• everyone

• only the government

What is a positive incentive for safe, non-distracted driving?

• lower insurance rates and fewer chances of wrecks

• higher fuel efficiency

• increased traffic violations

• more frequent car maintenance

In economic terms, why do medical doctors command such high pay?

• Health is very important

• Medical doctors have high student loan payments

• The government sets their wages at a high level so that demand does not exceed supply

• The human capital required to become a medical doctor involves a great degree of knowledge, training, and skill

How do you satisfy your unlimited wants in a world of limited resources?

• by making more money

• by making choices

• by stealing

• by setting a budget

Which of the following would be an opportunity cost of going to college?

• the cost of housing and food

• the cost of books and tuition

• the degree and the money you will earn

• the money you could have earned at a job

If a point lies inside the curve, this tells the company what?

• They are not efficient.

• They are maximizing profits.

• They are minimizing costs.

• They are operating at full capacity.