Basic Economic Concepts Test

Scarcity is best defined as

• The cost of the next best decision regarding limitations of time and money

• The fact that people have limited wants but unlimited resources

• The fact that people have unlimited wants and limited resources

• The opportunity cost of deciding between one tradeoff versus another

Resources (factors of production) are

• plentiful for households but scarce for economies.

• scarce for households and scarce for economies.

• plentiful for households and plentiful for economies.

• owned by households and scarce for economies.

Any resources that are made by humans, such as machines, and used to create other goods and services are called

• services.

• production.

• capital.

• labor.

Economics may best be defined as a

• scientific study of supply and demand.

• study of choices that are made with respect to a limited description of economic activities.

• study of choices people make in light of their desire for unlimited wants but the reality of limited resources.

• branch of sociology that examines the choice making process in light of supply and demand.

Approximately what percentage of the world's economies experience scarcity?

• 0%

• 25%

• 50%

• 100%

The overriding reason as to why households and societies face many decisions is that

• resources are scarce.

• goods and services are not scarce.

• incomes fluctuate with business cycles.

• people, by nature, tend to disagree.

Which of the following is the best definition of a need?

• The paradox of value

• a synonym for a want

• The tradeoff construed when measuring opportunity cost

• A fundamental necessity for life

Jobs that produce services refer to the production of non-tangible economic products such as

• a manufacturing company that produces watches.

• the manufacturing of tangible goods.

• the private ownership of the factors of production.

• employment in an area that performs duties or work for other people (doctor, teacher, barber, etc.)

A computer, smart phone, and projector are all goods used for a business. In economics, these are known as

• human capital

• financial capital

• physical capital

• consumer goods

One example of an entrepreneur is

• a writer who is hired by a film studio to adapt a novel into a screenplay.

• a lawyer in a high-profile law firm that specializes in business law.

• an Olympic ice skater who later decides to join a professional ice show.

• a computer engineer that starts their own social media company