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Basics of Economics Unit 1 Final Assessment

Total questions: 93

Worksheet time: 3hrs 32mins

Name
Class
Date
1.

Which of the following groups are confronted with the problem of scarcity?

a)

governments

b)

businesses

c)

people

d)

all of these

2.

Which of the following items would best fulfill a need?

a)

automobile

b)

food

c)

shoes

d)

a Play Station

3.

Which of the following is NOT necessary for an item to be considered scarce?

a)

be limited in quantity

b)

be desirable

c)

be inexpensive

d)

have more than one valuable use

4.

Which of the following is a good?

a)

A car

b)

Having your tax returns done

c)

A haircut

d)

A pedicure

5.

Which of the following is a service?

a)

Having your taxes calculated

b)

A car

c)

A baseball bat

d)

A water hose

6.

The best word to describe scarcity is ____________.

a)

sunshine

b)

choices

c)

air

d)

unlimited wants

7.

The reason that scarcity exists is because consumers _______________.

a)

have unlimited wants, but limited resources.

b)

don’t produce items efficiently

c)

have a limited number of wants, but endless resources

d)

have limited wants, resources, but limited wants.

8.

What is the best way to define the word “want”?

a)

Most wants are limited.

b)

People will eventually be satisfied with what they have.

c)

Wants are unlimited.

d)

Wants are fixed and do not change.

9.

The study of how people make choices when confronted with scarcity is _____________.

a)

economics

b)

unlimited wants

c)

unlimited resources

d)

capital

10.

Physical products that can be purchased are called _______.

a)

goods

b)

services

c)

wants

d)

needs

11.

When considering the costs and benefits of a decision, you should do something as long as ______________________.

a)

the benefits are less than the costs

b)

the costs are less than the benefits

c)

the costs and benefits are both high

d)

the costs and benefits are both low

12.

What you give up when you choose one alternative over another is called _____________.

a)

opportunity cost

b)

marginal benefit

c)

marginal cost

d)

incentive

13.

What is the fundamental problem in a society and the reason we study economics?

a)

scarcity

b)

lack of capital

c)

the factors of production

d)

labor shortage

14.

Using marginal analysis to make a decision considers making a decision that considers the additional costs and additional benefits is called _______________.

a)

marginal benefits, but not the marginal costs

b)

marginal costs, but not the marginal benefits

c)

the marginal costs and marginal benefits

d)

marginal propensity to consume

15.

The best way to make most decisions is to ______________________.

a)

consider the costs but not the benefits

b)

consider the relationship of the costs and benefits

c)

rely on emotion and not consider the costs

d)

always choose the decision with the least amount of cost

16.

Which of the following is not one of the broad categories of productive resources?

a)

capital resources

b)

consumer resources

c)

human resources

d)

natural resources

17.

Since the factors of production are considered to be scarce, an economy needs to ___________.

a)

ignore the limit on resources and produce all that the people want

b)

only provide the basic necessities

c)

figure how to use the limited resources to make limited goods and services

d)

figure how to use the limited resources to make the most goods and services

18.

The factors of production are ________.

a)

neither inputs or outputs

b)

both inputs and outputs

c)

inputs

d)

outputs

19.

The factors of production are ___________.

a)

fixed resources

b)

land, capital and entrepreneurship

c)

goods and services

d)

land, labor, capital and entrepreneurship

20.

Which if the following is NOT an example of an entrepreneur?

a)

Bill Gates, who founded Microsoft

b)

Steve Jobs, who founded Apple

c)

a Birmingham police officer

d)

Jeff Bezos, founder of Amazon

21.

All of the things used in the production of goods and services are called _______.

a)

capital resources

b)

labor resources

c)

the factors of production

d)

land resources

22.

Which of the following is NOT considered to be a labor resource?

a)

a waitress

b)

a robot that simply replaces a worker

c)

a secretary, since he or she only provides a service

d)

a janitor

23.

A man-made tool that is used to make other goods and services is which factor of production?

a)

land

b)

labor

c)

capital

d)

entrepreneurship

24.

Which of the following is NOT considered to be a natural resource?

a)

iron ore

b)

hammer

c)

water

d)

the Amazon forest

25.

Which of the following is NOT considered to be a capital resource?

a)

a fleet of delivery trucks

b)

stock in a large corporation

c)

a set of company tools

d)

a very small warehouse

26.

Which of the following factor of production includes both physical and mental efforts?

a)

land

b)

labor

c)

capital

d)

entrepreneurship

27.

Which of the following is NOT considered to be a natural resource?

a)

fish

b)

gasoline

c)

trees

d)

oil

28.

Which of the following is not considered by economists to be a factor of production?

a)

oil

b)

money

c)

a used tractor

d)

a waitress

29.

Which of the following factor of production brings together the other factors of production to make goods and services?

a)

land

b)

labor

c)

capital

d)

entrepreneurship

30.

A farmer's tractor is an example of which factor of production?

a)

land

b)

labor

c)

capital

d)

entrepreneurship

31.

Which factor of production is considered to be a gift of nature?

a)

land

b)

labor

c)

capital

d)

entrepreneurship

32.

An entrepreneur must be willing to __________.

a)

take risks

b)

not take risks

c)

borrow large sums of money

d)

seek a job with an established company

33.

The reason that individuals and societies must make choices is ____________.

a)

most goods are considered free goods like air and sunshine

b)

wants and needs are very limited in scope

c)

the factors of production are unlimited

d)

the factors of production are limited

34.

The assumptions for drawing a production possibilities curve include all of the following EXCEPT _______________.

a)

technology is fixed

b)

resources are fixed

c)

resources are not fixed

d)

only two products can be compared

35.

Which economic concepts may be illustrated in a production possibilities curve?

a)

scarcity

b)

economic growth

c)

efficiency

d)

all are illustrated in a PPC

36.

The use of resources to produce the maximum amount of goods and services is considered to be __________.

a)

efficient

b)

wasteful

c)

impossible

d)

unnecessary

37.

A point that lies inside (below) the production possibilities frontier(curve) is ____________.

a)

possible but considered inefficient

b)

possible to meet with current resources and efficient

c)

impossible to meet with current resources

d)

possible to meet with future resources only

38.

An economy at its production possibilities frontier is operating ___________.

a)

with slow economic growth

b)

at full potential

c)

without division of labor

d)

as a free enterprise economy

39.

When a country that produces only two goods is producing on its PPC, the decision to produce more of good A means that ___________.

a)

more of good B also will be produced

b)

the same amount of good B will be produced

c)

less of good B must be produced

d)

there are no opportunity costs involved

40.

A point that lies outside (beyond) the production possibilities frontier (curve) is ________________.

a)

inefficient

b)

possible to meet with current resources

c)

impossible to meet with current resources

d)

possible to meet but considered inefficient

41.

A PPC will shift outwards if ___________.

a)

fewer workers are available to produce goods and services

b)

there are increases in trade, technology, productivity and capital stock

c)

tax rates are increased

d)

there is an increase in the number of people who buy the products

42.
The opportunity cost of increasing production from 7 to 9 trucks is
a)
Scarcity
b)
2 boats
c)
2 trucks
d)
3 boats
43.
The opportunity cost of increasing production from 4 to 7 boats is
a)
1 boat
b)
2 boats
c)
2 trucks
d)
3 trucks
44.
The opportunity cost of increasing production from 4 to 7 boats is
a)
1 boat
b)
2 boats
c)
2 trucks
d)
3 trucks
45.
What is the opportunity cost of going from day 5 to day 2?
a)
700 Donuts
b)
21 Soccer balls
c)
0 Donuts
d)
0 Soccer Balls
46.
What is the opportunity cost of going from day 2 to day 5 is what?
a)
21 Soccer Balls
b)
700 Donuts
c)
1000 donuts
d)
25 Soccer balls
47.
The opportunity cost of going from day 4 to day 1 is what?
a)
500 Donuts
b)
19 Soccer Balls
c)
300 Donuts
d)
3 days
48.
Point C on the chart below, represents which of the following concepts?
a)
Unattainable
b)
Max Efficiency
c)
Underutilization
d)
Incentive
49.
If I hired a helper to make donuts and soccer balls along with myself, the line would move closer to which letter or point?
a)
Point C
b)
Point B
c)
Point A
d)
Would not move
50.

A firm operating at 'X' produces 70 whips and 60 saddles. It changes production to 'Y' producing 20 whips and 90 saddles. The opportunity cost of this production change is

a)

20 whips

b)

30 saddles

c)

50 whips

d)

60 saddles

51.
Apple can make 1,000 iPhones or 600 iPads in their factory each day. What is the opportunity cost of making each iPhone?
a)
3/5 iPad
b)
3/5 iPhone
c)
5/3 iPads
d)
5/3 iPhones
52.
What is the opportunity cost of going from point D to point B?
a)
6 carrots
b)
6 apples
c)
24 carrots
d)
24 apples
53.
What is the opportunity cost of going from point C to point A?
a)
16 apples
b)
16 carrots
c)
8 apples
d)
8 carrots
54.
What is the opportunity cost of going from point C to point A?
a)
16 apples
b)
16 carrots
c)
8 apples
d)
8 carrots
55.
What is the opportunity cost of going from point A to point D?
a)
28 apples
b)
28 carrots
c)
10 apples
d)
10 carrots
56.
What is the opportunity cost of going from point D to point C?
a)
2 carrots
b)
2 apples
c)
12 apples
d)
12 carrots
57.
What is the opportunity cost of going from point A to point C?
a)
8 apples
b)
8 carrots
c)
16 apples
d)
16 carrots
58.
Which point represents the economy working at 100% efficiency?
a)
Point X
b)
Point C
c)
Point Y
d)
Point Z
59.
Which point represents a point in production that is currently unattainable?
a)
Point X
b)
Point A
c)
Point D
d)
Point Y
60.
The US can produce 200 airplanes or 400 trucks. Japan can produce 300 trucks or 100 airplanes. 
Which country has the comparative advantage in producing trucks and what is their opportunity cost? 
a)
Japan, 1/3 airplane per truck
b)
US, 1/2 airplane per truck
c)
US, 2 airplanes per truck
d)
Japan, 3 airplanes per truck
61.

William's opportunity cost for producing 1 cake is

a)

1/2 pies

b)

2 pies

c)

2/3 pies

d)

3/2 pies

e)

1 pie

62.

The best example of a private good is ___________.

a)

Talladega National Forest

b)

Public beaches in south Alabama

c)

NASA

d)

Alabama and Auburn football tickets

63.

The best example of a public good is ___________.

a)

3D televisions

b)

Nike shoes

c)

flood control

d)

haircuts

64.

Which one of the nations listed below has an economy that can best be described as a command economy with limited free market opportunities?

a)

China

b)

The United States

c)

South Korea

d)

Germany

65.

Which of the nations listed below has a command economy?

a)

South Korea

b)

Germany

c)

The United States

d)

North Korea

66.

Which of the four types of economies listed below is the most common among nations of the world?

a)

Pure free market

b)

Pure command

c)

Mixed economy

d)

Pure Traditional

67.
Choose the correct word
a)
erazer
b)
erasser
c)
erraser
d)
eraser
68.

In which economic system is the protection of private property rights essential?

a)

Command

b)

Traditional

c)

Market

d)

Socialism

69.

In which economic system does the government answer all three of the big economic questions? (What to produce? How to produce? For whom to produce?)

a)

Command

b)

Socialism

c)

Market

d)

Traditional

70.

Based on the passage, East Germany's government planned to transform its economy from: Click the magnifying glass for a better view.

a)

Traditional to mixed

b)

Command to traditional

c)

Market to mixed

d)

Command to mixed

71.

Which of the following best explains a mixed economy?

a)

Private ownership of the factors of production and regulation of businesses by government

b)

Market exchanges answer all three of the big economic questions

c)

Family customs and traditions determine what and how to produce a good

d)

Government answers all three of the big economic questions

72.
Place where buyers and sellers meet to exchange goods and services for money
a)
Market
b)
Factor of production
c)
Money
d)
Interdependent
73.
The four types of economic systems are: 
a)
Traditional, Command, Mixed, & Market
b)
Traditional, Command, Combined, & Market
c)
Communism, Capitalism, Free Market, and Macroeconomics
d)
Microeconomics, Macroeconomics, Individual, and Traditional.
74.
A command economy is when the government is in control.
a)
True
b)
False
75.

Which of the following is an economic system in which the government and people are used to decide how to use scarce resources?

a)

Market economy

b)

Command economy

c)

Traditional economy

d)

Mixed economy

76.

Which of the following is an economic system in which economic decisions are made according to tradition & culture?

a)

Market economy

b)

Command economy

c)

Traditional economy

d)

Mixed economy

77.

What is an economic system where only the government makes the economic decisions?

a)

traditional economy

b)

free enterprise

c)

mixed economy

d)

command economy

78.

What type of economy do most countries in the world have?

a)

Market economy

b)

Command economy

c)

Traditional economy

d)

Mixed economy

79.

The country of North Korea has a dictator that makes all of the economic decisions. What type of economy is this?

a)

Traditional

b)

Market

c)

Command

d)

Centrally Planned

80.

The government has little to no role in the production of goods in this type of economy.

a)

Traditional

b)

Mixed

c)

Command

d)

Market

81.

I am a farmer in Africa, and have always traded for my goods. I have a _____ economy.

a)

Traditional

b)

Command

c)

Market

d)

Mixed

82.

The government gets to decide who gets what

a)

Traditional

b)

Command

c)

Mixed

d)

Market

83.

Based on traditions

a)

Command

b)

Traditional

c)

Market

d)

Mixed

84.

The goods produced will be the same, generation after generation

a)

Mixed

b)

Market

c)

Command

d)

Traditional

85.

Businesses have freedom to produce whatever they think consumers will buy

a)

Market

b)

Command

c)

Mixed

d)

Traditional

86.

A command economy is when the government is in control.

a)

True

b)

False

87.
Which of the following is not a factor of production? 
a)
Import 
b)
Land 
c)
Labor 
d)
Capital 
88.
Which of the following is an economic system in which the government and people are used to decide how to use scarce resources?
a)
Market economy
b)
Command economy
c)
Traditional economy
d)
Mixed economy
89.
Which of the following is an economic system in which economic decisions are made according to social roles & culture?
a)
Market economy
b)
Command economy
c)
Traditional
Traditional economy
d)
Mixed
Mixed economy
90.
What is an economic system where only the government makes the economic decisions? 
a)
traditional economy
b)
free enterprise 
c)
mixed economy
d)
command economy
91.
________ is the most basic economic problem.
a)
Scarcity
b)
Labor
c)
Greed
d)
Capital
92.
A person who comes up with a product or service, and finds the money and time to produce this new product.
a)
Entrepreneur
b)
Incentive
c)
Specialization
d)
Barter
93.
The sacrifice that is made when a person chooses between two goods or services.
a)
Profit
b)
Economics
c)
Productivity
d)
Opportunity Costs

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