Economics Exam – SSEMI 1-3

Which of the following best defines scarcity?

• Unlimited wants and unlimited resources

• Limited resources and unlimited wants

• Limited wants and unlimited resources

• Equal distribution of goods and services

What are the four factors of production?

• Land, labor, capital, entrepreneurship

• Land, goods, trade, technology

• Labor, markets, profit, innovation

• Land, consumers, trade, opportunity cost

What does opportunity cost mean?

• The money you spend on production

• The next best alternative you give up

• The total value of all goods produced

• The price paid for a product

In a market economy, who primarily decides what gets produced?

• Government

• Consumers and producers

• Supreme Court

• Military

Which economic system relies heavily on tradition and customs?

• Market economy

• Mixed economy

• Traditional economy

• Command economy

A farmer decides to grow corn instead of wheat. The wheat not grown represents:

• Production possibilities

• Absolute advantage

• Opportunity cost

• Comparative advantage

Which of the following is an example of human capital?

• Factory machines

• Education and training

• Natural resources

• Bank savings

A country that can produce more steel using fewer resources than another country has a(n):

• Absolute advantage

• Comparative advantage

• Opportunity cost

• Trade deficit

If a nation produces both cars and computers, but gives up producing some cars to produce more computers, this trade-off can be shown on a:

• Circular flow diagram

• Production Possibilities Curve (PPC)

• Business cycle chart

• Supply curve

When the government sets the price of bread below market equilibrium, what is the most likely result?

• Surplus

• Shortage

• Equilibrium

• Inflation