Fundamentals Quiz 1 Review

A rational decision maker:

• ignores marginal changes and focuses instead on "the big picture".

• ignores the likely effects of government policies when he or she makes choices.

• takes an action only if the marginal benefit of that action exceeds the marginal cost of that action.

• takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions.

Jamie must make an economic decision. He must choose whether or not to buy a new truck. After considering all the options, he concludes that the marginal costs of the truck are greater than the marginal benefits. In Jamie's case, buying the truck would be:

• a rational economic decision.

• an irrational economic decision.

• an opportunity cost.

• a productive choice.

MagnaFlare is a corporation that makes road flares. One of the primary components of a MagnaFlare is ground magnesium. How would the magnesium ore, from which ground magnesium is made, be classified as a factor of production?

• Capital
• Land
• Entrepreneurship
• It is not a factor of production, it is a product.

Paul wants to buy a classic sports car. Unfortunately, only a limited amount of dealers and collectors have the model car he wants. As a result, Paul will have to pay a high price, if he can even get the car at all. Paul is experiencing

• depreciation in the market
• severe inflation
• an embargo on cars
• scarcity

Following a massive hurricane that hits Georgia's northern coast, residents have not running water or electricity. As a result, citizens buy up all of the flashlights and bottled water in the area faster than producers can supply them. What problem do people on the Georgia coast now face, regarding flashlights and bottled water? 

• Excessive rgulation
• Scarcity

• rationing
• incomplete tradeoffs

The study of how individuals, firms (businesses), and nations best allocate their limited resources is called

• Economics
• Entrepreneurship
• Scarcity calculation
• Government regulation

Which factor of production would you consider a lawn mower?

• Land
• Labor
• Capital
• Entrepreneur

Which factor of production would you consider a cow?

• Land
• Labor
• Capital
• Entrepreneur

What is the basic problem that all economies must deal with?

• How to satisfy limited wants with limited resources

• How to satisfy limited wants with unlimited resources

• How to satisfy unlimited wants with limited resources

• How to satisfy unlimited wants with unlimited resources.

A headline reads: "Tech Companies Innovate with Advanced Robotics." What basic economic question is being addressed in this headline?

• for whom to produce?

• when to produce?

• what to produce?

• how to produce?