WorksheetsReview of 1.1 What is Economics?
Total questions: 68
Worksheet time: 38mins
Which of the following is a free good?
Something that satisfies human wants that is not produced using scarce resources
Healthcare in a country where you do not have to pay
A free gift that comes with a subscription to a new website
A free good that comes when a supermarket makes a buy-one-get-one-free offer
Which of the following is not a characteristic of a pure free market economy?
Consumer sovereignty
Government provides the road system
Price mechanism guides the allocation of resources
Private businesses produce goods and services
Which of the following will increase potential output and cause the PPC of a country to shift outwards?
More expensive products
A rise in wages
New technological development
An increase in employment in the country
Using the PPC diagram, which of the following is correct?
There is a greater demand for good B than there is for good A
The opportunity cost of producing 280 units of good B is 140 units of good A
There is an under-utilisation of resources in the economy
Producing 200 units of good B means foregoing the production of 50 units of good A
Using the PPC diagram, which of the following is not true?
The opportunity cost of increasing output of good B from 140 to 180 units is 50 units of good A
The economy is producing efficiently at points F and G
This economy will always produce on the PPC
The movement along the PPC from point F to point G could be described as a reallocation of resources
Which of the following is the most accurate definition of opportunity cost?
The highest value alternative given up to get the option chosen in a decision-making situation
The price you pay for a good when you buy it
In a buying decision, it is what you have to give up in order to afford something
When a business invests in a new factory, it is the interest cost on the loan they take out
Scarcity of resources in a market economy means that:
Inflation will always be a problem
The economy cannot produce on its production possibility curve
Economic recessions are inevitable
Consumers and producers will face an opportunity cost when they make decisions
Economics is a subject that is focused on the study of:
How the government allocates its funds to different types of public spending
How resources can be used more efficiently to satisfy human wants
How scarce resources are allocated to satisfy unlimited human wants
How new economic resources are used by businesses
Which of the following is true when scarce resources are allocated efficiently?
Equal amounts of land, labour and capital are used in producing goods or services
All firms in the economy are maximising their sales and profits
Consumers in the economy have equal amounts of goods and services
It is impossible to increase the output of one good without reducing the output of another good
The central problem in economics is:
Government
Busineseses
Scarcity
Opportunity Cost
Which goal of national economies looks to maximize the benefit of resources while preventing waste?
Economic Freedom
Economic Equity
Economic Efficiency
Economic Growth
The limited availability of resources is known as...
Scarcity
Voluntary Exchange
Profit
Opportunity Cost
Point A inside this Production Possibilities Curve represents:
Resources are being inefficiently used
Production is not attainable
Production is possible if there is an increase in resources
Production possibilities are going to decrease
What does a Production Possibilities Curve illustrate?
Choices result in voluntary exchange
Production is impossible
Choices result in trade-offs because of scarce resources
Production of multiple goods creates inefficiency
A student must decide between going to the movies with friends or staying home and studying for a final exam. She chooses to stay home and study. Which economic concept describes going to the movies in this scenario?
Comparative Advantage
Equilibrium Point
Income Effect
Opportunity Cost
Which of the following is NOT a basic question of economic systems?
What should be produced?
For whom should it be produced?
How long should it be produced?
How should it be produced?
By directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Which famous economist most likely wrote this?
Karl Marx
Fredrich Hayek
John Maynard Keynes
Adam Smith
The graph used to illustrate the impact of scarcity on the economy is known as a:
Cost-Benefit Analysis
Supply Curve
Production Possibilities Curve
Demand Curve
Which type of economy has the MOST government involvement?
communism
free-market
capitalism
socialism
What would be an example of a capital resource
water
trees
business owner
school building
There are 4 _______________. They are land, labor, capital and entrepreneurship.
Factors of Production
Market Economy
Profit
Economics
This measurement is used to determine how well a country's economy is doing.
Stock Market Prices
Gross National Assessment
Gross Domestic Product
Phrase that means how good a person's quality of life is.
Opportunity standard
Standard of living
rent control
A student must decide between going to the movies with friends or staying home and studying for a final exam. She chooses to stay home and study. Which economic concept describes going to the movies in this scenario?
Comparative Advantage
Equilibrium Point
Income Effect
Opportunity Cost
Which of the following is true?
Needs, wants, and resources are all unlimited
Needs and wants are unlimited but resources are limited
Needs and wants are limited but resources are unlimited
Needs, wants, and resources are all limited
The term "invisible hand" was Adam Smith's way of explaining the relationship between what two groups?
The communist government and the people
The producers and the consumers
The government and the people
The United States and other countries
It is a social science that examines how people choose among the alternatives available to them.
Entrepreneurship
Economics
Scarcity
Shortage
It is the branch of economics that focuses on the choices made by individual decision-making units in the economy typically consumers and firms and the impacts those choices have on individual markets.
Macroeconomics
Scarcity
Shortage
Microeconomics
It is the branch of economics that focuses on the impact of choices on the total, or aggregate, level of economic activity. It analyzes the broad aspects of a country’s economy.
Microeconomics
Scarcity
Oikonomia
Macroeconomics
The natural resources that people use: Forests, pasture land, minerals, water, etc. are products used in the production of goods and services, come from the earth.
Labor
Land
Capital
Entrepreneurship
Goods made by people to be used specifically to produce goods and services: Tools, office equipment, roads, factories, etc.
Labor
Land
Entrepreneurship
Capital
This is basically the ideas that go into the process of creating a good or providing a service.
Capital
Entrepreneurship
Land
Labor
The human ability to produce a good or service: Talents, skills, physical labor, etc. the work that goes into the production of a good or service.
Human resources or Labor
Land
Capital
Entrepreneurship
An unemployed factory worker is under what factor of production?
Labor
Capital
Natural resource
Land
The library building on your campus is under what factor of production?
Labor
Capital
Land
Entrepreneurial Skills
An untapped deposit of natural gas is under what factor of production?
Natural Resource
Capital
Labor
Land
The local power plant is under what factor production?
Labor or Human resources
Capital
Land
Entrepreneurship
Micro Economics word is derived from Greek word "Mikros"
True
False
Interpret the Economic System
Socialistic Economy
Mixed Economy
Capitalistic Economy
Which type of economy has central ownership, the government, and lack of individual choice?
Market
Mixed
Command
Traditional
Focusing on a narrow range of products/services that can be produced most efficiently and cost-effectively.
subsistence
specialization
scarcity
bartering
Competition and profit motive are important characteristics of a:
command economy
traditional economy
market economy
socialist economy
Privatization refers to ....
Transfer of assets from people to government
Transfer of assets from public to private organizations
Transfer of assets from corporate to public
Transfer of assets from corporate to government
In the production possibilities diagram, efficient management of resources is shown by
movement from outside of the curve to a point on the curve
all the points on the curve
change in the slope of the curve
the points inside the curve
Which of the following represents a point lying outside the production possibility curve?
Unemployment
High price
Increasing cost
Unattainable production in the combination of two goods
Man made resources in production process is known as (a)
The assumption that everything else remain constant is known as " (a) "
scarcity, choice, efficiency, equity, economic well-being, sustainability, change, interdependence and (a) are the nine concepts that you need to learn in your Economics course
Which two important, often misunderstood and misused, economic terms come to your mind when you look at the two pictures?
Economic scarcity
Fairness and distirbution
Government Intervention
Equality and Equity
Which of the following events would cause the movement in a PPF shown here?
Tsunami on an island state
Increase in immigration
Depletion of fish in the sea
Return of unemployed to the workforce
War
