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WorksheetsDomain 1: Basic Economic Concepts
Total questions: 32
Worksheet time: 50mins
Name
Class
Date
1.
The definition of Scarcity is...
a)
An unlimited amount of resources to meet limited wants and needs
b)
A limited amount of resources to meet unlimited wants and needs.
c)
When people use time and energy to create events
d)
A city where individuals commit themselves to unlimited wants and needs
2.
Sally decides to attend college after high school rather than getting a job. What is her opportunity cost?
a)
All the things she could have done in that time
b)
Her tuition and fees
c)
Wages she could have earned at a job
d)
The education she gains in college
3.
Why are entrepreneurs important in a free enterprise economy?
a)
They hire their own employees
b)
They make safe investments
c)
They pay excellent salaries
d)
They start new businesses
4.
What is foregone benefit of the next best alternative when resources are used for one purpose rather than another?
a)
Opportunity Cost
b)
Trade in
c)
Trade on
d)
Scarcity
5.
What are these?
Land, labor, capital, and entrepreneurship
Land, labor, capital, and entrepreneurship
a)
Economy
b)
Infrastructure
c)
Factors of production
d)
Capital
6.
If a country can produce a good at a lower opportunity cost then they have a(n)...
a)
Absolute Advantage
b)
Comparative Advantage
c)
Trade Surplus
d)
Trade Defecit
7.
If a country produces more of a good than another country then they have a(n)...
a)
Absolute Advantage
b)
Comparative Advantage
c)
Trade Surplus
d)
Trade Defecit
8.
A graphical representation of the alternative combinations of goods and services an economy can produce is called?
a)
Production Frontier Curve
b)
Production Possibilities Curve
c)
Production Performance Curve
d)
Production Alternative Frontier
9.
The economic choices made by individuals, businesses, and governments and the interactions of those choices answer which three major economic questions?
a)
What?, How?, and Why?
b)
What?, How?, and For Whom?
c)
Why?, How much?, and At what price?
d)
At what price?, What?, and Why?
10.
Which of the following would be a clear indication of being an entrepreneur?
a)
Appearing on Shark Tank looking for investments
b)
The amount of revenue taken in during the company's first few years
c)
Ability to be a wealthy investor who provides capital to other business
d)
Ability to combine the factors of production and produce something innovative
11.
Someone apples for a patent for their invention. The government grants these patents to:
a)
encourage free trade
b)
promote innovation
c)
regulate the business cycle
d)
strengthen American culture
12.
According to this production possibilities curve, which point represents under-utilization?
a)
Point A
b)
Point B
c)
Point C
d)
Point D
13.
Based on the chart, which of the following points represent an unattainable production level?
a)
Point A
b)
Point C
c)
Point E
d)
Point F
14.
Assume a country wants to move from Point B to Point D on this Production Possibilities Curve. What must that country do?
a)
Increase spending on border security and keep hospital spending constant
b)
Decrease spending on border security and increase hospital spending
c)
Decrease spending on border security and keep hospital spending constant
d)
Increase spending on border security and decrease hospital spending
15.
When the quantity equals 400 pretzels:
a)
producers are willing to supply 400 pretzels for $2
b)
consumers are willing to pay $3 for the 400th pretzel
c)
producers are willing to supply 400 pretzels for #3
d)
consumers are willing to pay $2 for 400th pretzel
16.
When 300 pretzels are produced:
a)
The marginal cost is equal to the marginal benefit
b)
The marginal cost is greater than the marginal benefit
c)
The marginal cost is less than the marginal benefit
d)
The marginal cost is not related to the marginal benefit
17.
The US can produce 3 tons of wheat
Ireland can produce 2 tons of wheat
Which country has the absolute advantage in producing wheat?
Ireland can produce 2 tons of wheat
Which country has the absolute advantage in producing wheat?
a)
Ireland
b)
The US
18.
What is the effect of the United States and Ireland both specializing in the goods that they have a comparative advantage in?
a)
Only the US will experience gains from trade
b)
Only Ireland will experience gains from trade
c)
Neither country will experience gains from trade
d)
Both countries will experience gains from trade
19.
Suppose that in one week Sam can knit 5 sweaters or make 4 blankets and Rob can knit 10 sweaters or make 6 blankets. Which of the following is true?
a)
Sam has an absolute advantage in making blankets
b)
Sam has neither a comparative nor an absolute advantage in knitting sweaters or making blankets
c)
Sam has a comparative advantage in making blankets
d)
Sam has a comparative advantage in knitting sweaters
20.
The US can produce 200 airplanes or 400 trucks. Japan can produce 300 trucks or 100 airplanes.
Which country has the absolute advantage in producing airplanes?
Which country has the absolute advantage in producing airplanes?
a)
Japan
b)
US
21.
If a country produces more of a good than another country then they have an
a)
Absolute Advantage
b)
Comparative Advantage
c)
Trade Surplus
d)
Trade Defecit
22.
A technique of reducing or forgoing one or more desirable outcomes in exchange for increasing or obtaining other desirable outcomes in order to maximize the total return or effectiveness under given circumstances.
a)
Trade-off
b)
Opportunity cost
c)
PPF
d)
Scarcity
23.
Which factors of production are visible in this photo of a Chilean copper mine?
a)
land and physical capital
b)
land and human capital
c)
labor and physical capital
d)
labor and human capital
24.
A popular bakery has only a few ingredients left to make their products. They could bake muffins or cookies, but they can’t make both. The bakers decide to make cookies for their customers. What is the opportunity cost of their decision?
a)
muffins
b)
cookies
25.
Emelia has been invited to a sleep over at Chloe’s house for this Saturday. Emelia has tickets to see her favorite band in concert that same night. She decides to give the tickets to her sister and go to Chloe’s house. What is the opportunity cost of her decision?
a)
seeing her favorite band
b)
spending time at a friends house
26.
The Welch family has saved some money. They can spend it on a vacation to the Grand Canyon or build a swimming pool in their back yard. They decide to spend the money on a swimming pool. What is the opportunity cost of their decision?
a)
vacation
b)
swimming pool
27.
Trade-offs create this. It is the thing that you DO NOT chose. It is what you have to give up in order to get something else. It is your 2nd BEST ALTERNATIVE.
a)
Trade-offs
b)
Opportunity Cost
c)
Scarcity
d)
Production Possibilities Curve
28.
The force that encourages people and organizations to improve their material well-being
a)
profit motive
b)
competition
c)
free contract
d)
legal equity
29.
Economists build economic models to:
a)
Be able to use graphs to show how the economy works
b)
Describe how a business should combine the factors of production
c)
Help analyze the way the world works
d)
Find out how high teenage unemployment is
30.
Economics is primarily the study of:
a)
How scarcity can be eliminated
b)
How firms manipulate prices
c)
How government influences resource allocation decisions
d)
The problem of scarce resources relative to human wants
31.
Which of the following is considered a trade-off?
a)
Decreasing the amount of resources spent on all wants to reduce the total costs in the future
b)
Replacing one resource with another resource to satisfy a want
c)
Organizing the use of a resource in a manner that fulfills all wants
d)
Reducing the amount of resources spent on one want to spend more on another want
32.
Which of the following is considered to be an opportunity cost of playing sports?
a)
Medical bills as a result of an injury
b)
Equipment necessary to play the sport
c)
Loss of some time spent with friends and/or family
d)
Cost of a physical
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