NEW- Micro Unit 1 Summary- Basic Economic Concepts

What fundamental economic concept describes the situation where human wants for goods, services, and resources exceed what is available?

• Abundance

• Scarcity

• Surplus

• Efficiency

Which of the following is NOT considered one of the four factors of production in economics?

• Land

• Money

• Labor

• Capital

Which branch of economics focuses on the decisions made by individual consumers and businesses, such as the cost of production or the effect of minimum wage?

• Macroeconomics

• Econometrics

• Microeconomics

• Behavioral Economics

In which type of economic system does the government primarily own the factors of production and make decisions about what, how, and for whom goods and services are produced?

• Free Market Economy

• Mixed Economy

• Traditional Economy

• Command Economy

Which of the following best describes a mixed economy?

• An economic system where all resources are owned and controlled by the government.

• An economic system where individuals own the factors of production, and the government has no role.

• An economic system that combines private ownership of resources with government regulation and provision of public services.

• An economic system focused solely on providing public goods and services without regard for profit.

What is the opportunity cost of choosing to spend an evening studying for an exam?

• The money spent on textbooks and study materials.

• The knowledge gained from studying for the exam.

• The enjoyment or earnings from the next best alternative activity, such as going to the movies or babysitting.

• The total amount of time spent studying.

On a Production Possibilities Curve (PPC), what does a point located inside the curve represent?

• An impossible or unattainable level of production.

• An efficient use of all available resources.

• An inefficient use of resources, indicating unemployment or underutilization.

• A shift in the curve due to technological advancement.

The Law of Increasing Opportunity Cost is best illustrated by a Production Possibilities Curve that is:

• A straight line, indicating constant trade-offs.

• Bowed outward, showing that producing more of one good requires giving up increasingly larger amounts of another.

• Shifting inward, representing a decrease in available resources.

• Shifting outward, representing economic growth.

Which country holds an absolute advantage in the production of cars?

• United States

• Canada

• Both countries

• Neither country

What is the opportunity cost for the United States to produce one plane?

• 1/2 car

• 2 cars

• 1/4 car

• 4 cars