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WorksheetsBasic Economic Concepts Test Review
Total questions: 65
Worksheet time: 33mins
Name
Class
Date
1.
Scarcity is best defined as
a)
The cost of the next best decision regarding limitations of time and money
b)
The fact that people have limited wants but unlimited resources
c)
The fact that people have unlimited wants and limited resources
d)
The opportunity cost of deciding between one tradeoff versus another
2.
Resources (factors of production) are
a)
scarce for individuals but plentiful for societies.
b)
plentiful for all individuals and for societies.
c)
scarce for individuals and scarce for societies.
d)
unlimited
3.
Any resources that are made by humans, such as machines, and used to create other goods and services are called
a)
services.
b)
production.
c)
capital.
d)
labor.
4.
Economics may best be defined as a
a)
scientific study of supply and demand.
b)
study of choices people make in light of their desire for unlimited wants but the reality of limited resources.
c)
branch of psychology that studies the human mind
d)
study of money
5.
Approximately what percentage of the world's economies experience scarcity?
a)
0
b)
25
c)
50
d)
75
e)
100
6.
The overriding reason as to why households and societies face many decisions is that
a)
resources are scarce.
b)
there are haves and have-nots
c)
incomes fluctuate with business cycles.
d)
people, by nature, tend to disagree.
e)
wants are scarce.
7.
Guns and butter are used to represent the classic societal tradeoff between producing
a)
durable or nondurable goods.
b)
imports or exports.
c)
military or consumer goods.
d)
law enforcement or agriculture.
8.
Which of the following is the best definition of a need?
a)
a way to express your individuality
b)
a synonym for a want
c)
the tradeoff construed when measuring opportunity cost
d)
a fundamental necessity for life
9.
Last week, a local student, had the opportunity to purchase a 1979 Honda Civic with a missing hood for $519, or a 2017 Infiniti G37 Coupe for $50K. He understood the opportunity cost and potential benefits of both purchases, but just couldn't resist; he chose the Infiniti. By choosing the Infiniti, he made a purchase that we would most likely consider to be a ____________, while it is also considered a____________
a)
need/good
b)
want/good
c)
need/service
d)
want/service
10.
All of the following are considered goods EXCEPT
a)
Nike shoes purchased for the Red Terror’s football team
b)
Brand new Reebok jerseys purchased for the soccer team
c)
Recycled warm-up outfits handed down to the basketball team
d)
-A CPR training seminar for the swimming team
11.
Which of the following would NOT be considered a factor of production
a)
trees used for making paper
b)
LeBron James
c)
a worker at Wal-Mart
d)
an iPhone used for personal use; text messaging between you and your friend
12.
A computer, smart phone, and projector are all goods used for a business. In economics, these are known as
a)
human capital
b)
financial capital
c)
physical capital
d)
consumer goods
13.
One example of an entrepreneur is
a)
a writer who is hired by a film studio to adapt a novel into a screenplay.
b)
a lawyer in a high-profile law firm that specializes in business law.
c)
an Olympic ice skater who later decides to join a professional ice show.
d)
an computer engineer that starts their own social media company
14.
You were recently hired as an advocate for energy conservation by the “Go Green Society of America!”. Your first job was to consult local business people on methods for cutting back on their consumption of energy. In this example, you were the _______________, the Factor of Production, and were providing a _______________ for the businesses.
a)
land/good
b)
land/service
c)
laborer/service
d)
laborer/good
15.
A local high school student was recently hired as a clown for Bubba's Clown Company. Bubba decided to send the student off to clown camp in order to increase his ability to entertain. Economists would assert that Bubba's Clown Company has made
a)
the student very happy young man.
b)
an investment in physical capital.
c)
an investment in human capital.
d)
a capital gain in the factor of productions.
16.
Tradeoffs are best defined as
a)
alternative choices made by consumers, when they essentially give up one thing in order to obtain another
b)
the cost of the next best alternative use of time, money or resources
c)
intrinsic value that people receive when they choose one option over another
d)
the value of the next best alternative use of time money or resources
17.
After school today, your friend invites you to lunch at Taco Bell, which they say that they will pay for 100%. According to economics there is no such thing as a free lunch. Which of the following might you have given up?
a)
time
b)
leisure
c)
recreation
d)
all of the above
18.
What is the opportunity cost of a decision?
a)
the total cost of all the alternative decisions that could have been made
b)
the best possible way the question could have been decided
c)
the available, alternative ways that a person might have made used their time
d)
the next best use of your resources; the most desirable alternative forgone (given up) in light of the decision you made
19.
The adage, "There is no such thing as a free lunch," means
a)
even people on welfare have to pay for food.
b)
the cost of living is always increasing.
c)
people face tradeoffs.
d)
all costs are included in the price of a product.
20.
Coca Cola’s decision to build a new factory building is an example of a ______________ tradeoff.
a)
individual
b)
business
c)
social
d)
scarce
21.
The purpose of a production possibilities curve is to
a)
enable a country to mobilize to win a war
b)
increase productivity of an economy’s workers
c)
show alternative ways to use an economy’s resources and the cost of various possibilities
d)
make it possible to increase an economy’s inputs
22.
All of the following are examples of how production possibilities frontier could shift to the right (grow) in different markets EXCEPT
a)
technology increases allowing an entity to produce more of goods and services
b)
more laborers are available due to heightened levels of immigration
c)
the internet makes communication more efficient and cost productive
d)
a country’s population ages and reduce the workforce of a nation
23.
You bought two new albums with the last $30 in your checking account instead of having dinner and a movie with your friends this Saturday night. Your next payday is on Monday. What is the opportunity cost of these albums?
a)
the difference between the cost to produce the albums and the price you paid for them
b)
the $30 used to purchase the albums
c)
dinner and a movie with your friends this Saturday night
d)
knowing you are the first of your friends to have these albums
24.
Efficient use of resources is represented by point(s)
a)
point O
b)
point A
c)
point P,X,N
d)
point M
25.
Underutilization, or inefficient use of resources is shown on the graph by point(s)
a)
point O
b)
point A
c)
point P,X,N
d)
point M
26.
Growth based on an increase in resources (factors of production) is shown by point(s)
a)
point O
b)
point A
c)
point P,X,N
d)
point M
27.
If this economy devotes all of its resources to the production of shoes, then it will produce
a)
100 shoes and 5 shin guards
b)
0 shoes and 5 shin guards
c)
100 shoes and 0 shin guards
d)
5 shoes and 100 shin guards
e)
0 shoes and 0 shin guards
28.
The opportunity cost of this economy moving from point A to point D is
a)
zero shoes
b)
30 shoes
c)
70 shoes
d)
100 shoes
e)
50 shoes
29.
The opportunity cost of this economy moving from point E to point A is
a)
zero shin guards
b)
8 shin guards
c)
4 shin guards
d)
5 shin guards
e)
3 shin guards
30.
The opportunity cost of this economy moving from point F to point D is
a)
zero shin guards
b)
5 shin guards
c)
2 shin guards
d)
3 shin guards
e)
4 shin guards
31.
If this economy produces 4 shin guards they are able to produce ____ shoes
a)
100
b)
40
c)
80
d)
15
e)
50
32.
The production possibilities curve is a graph that shows the various combinations of output that an economy
a)
should produce.
b)
is capable of producing.
c)
demands.
d)
supplies.
33.
Which of the following would most likely have caused the production possibilities frontier to shift outward from X to Y?
a)
a reduction in unemployment
b)
a technological breakdown
c)
an increase in technology that allows the economy to produce more.
d)
a decrease in the human capital within the economy.
34.
All of the following are types of decisions that can be made at the margin EXCEPT
a)
whether to grow beans or corn on a large farm.
b)
whether or not to hire a new worker.
c)
whether to leave early in the morning or late in the day for a trip.
d)
whether to be a fireman or police officer when a 5 year old grows up (i.e. 25 years old).
35.
During World War 2, women entered the American labor force and remained as workers even after the war. The most likely change in the PPC would be to
a)
a movement along the solid line
b)
a shift inward
c)
a shift outward
d)
nothing would occur
36.
A deadly virus that kills 10% of the labor force within the country would most likely cause the curve to
a)
shift inward
b)
shift outward
c)
nothing would occur
d)
movement along the solid line
37.
Efficient production is represented by which point(s)?
a)
A
b)
B
c)
C
d)
X
e)
Y
38.
Which of the following would most likely have caused the production possibilities frontier to shift outward?
a)
a decrease in employment
b)
a technological advance in the consumer goods industries but not capital goods
c)
a general technological advance in both capital and consumer goods
d)
an increase in the availability of capital-producing resources but not consumer goods
39.
The PPC illustrates the trade-off for a particular student between time spent studying per week and income per week from working part-time. What is the opportunity cost for this person of moving from point a to point b?
a)
$5 of income per week
b)
$10 of income per week
c)
two hours of studying per week
d)
$10 per hour of studying per week
e)
$20 of income per week
40.
The opportunity cost of moving from point A to C is ___ textbooks
a)
8
b)
9
c)
10
d)
11
e)
12
41.
This ppf represents __ opportunity costs.
a)
constant
b)
increasing
c)
reduced
d)
efficient
42.
Which of the following events would allow the economy to produce more?
a)
Unemployed labor is put to work.
b)
The economy puts its idle capital to work.
c)
The economy creates a new technological method to increase production beyond its previous capabilities.
d)
The economy experiences a negative supply shock.
43.
What is the opportunity cost to Toy-land of increasing the production of dolls from 200 to 300?
a)
100 fire trucks
b)
150 fire trucks
c)
200 fire trucks
d)
350 fire trucks
44.
What is the opportunity cost to Batterland of increasing the production of pancakes from 150 to 300?
a)
75 waffles
b)
150 waffles
c)
250 waffles
d)
325 waffles
45.
Inefficient, underutilized production is represented by which point(s)?
a)
X
b)
Y
c)
A
d)
B
e)
C
46.
The fundamental problem facing all is scarcity, which is defined as
a)
unlimited needs, but limited wants.
b)
unlimited wants, but limited needs in order to satisfy those wants.
c)
unlimited wants, but limited resources to satisfy those wants.
d)
the science of decision-making.
47.
All of the following are goods EXCEPT
a)
television program
b)
ipad
c)
desk
d)
shoes
48.
All of the following would most likely be considered needs in the United States EXCEPT
a)
food
b)
water
c)
breathable air
d)
Bugatti Chiron
49.
All of the following are examples of services EXCEPT
a)
getting a haircut
b)
going to the dentist
c)
receiving tutoring for a test
d)
buying a newspaper
50.
Which of the following factors of production are being acquired in the following scenario: "General Motors purchases robots to install the interior lining of an automobile"?
a)
land
b)
labor
c)
capital
d)
entrepreneurship
51.
All of the following are considered laborers EXCEPT
a)
a police officer
b)
a teacher
c)
an accountant
d)
a barber's clippers
e)
a dentist and her secretary
52.
All of the following would be considered improving human capital EXCEPT
a)
going to college
b)
going to trade school
c)
going to culinary arts school to learn to cook
d)
a company sending their workers to college to improve their skills
e)
a company hiring workers from India instead of the US
53.
All of the following are considered entrepreneurs EXCEPT
a)
Oprah Winfrey
b)
Bill Gates
c)
the owner of a local pizza restaurant
d)
an accountant for Microsoft
54.
All of the following are true about tradeoffs EXCEPT
a)
they are what we give up when we choose one action over another.
b)
we always give up something to get something else.
c)
there is no such thing as a free lunch.
d)
we can satisfy all of our wants.
55.
An office building is an example of
a)
human capital
b)
physical capital (capital good)
c)
entrepreneurship
d)
labor
56.
Which list contains the four factors of production?
a)
land, labor, capital, and entrepreneurial skills
b)
labor, capital, economics, and natural resources
c)
land, labor, credit, and entrepreneurial skills
d)
labor, capital, productivity, and renewable resources
57.
A farmer's tractor is an example of which factor of production?
a)
entrepreneurial skills
b)
land
c)
labor
d)
capital
58.
Shaquan is scheduled for a private workout at his local gym. He also could be doing homework or hanging out with his friends. Shaquan ultimately decides to go to the gym as scheduled. If he had not gone to the gym he would have met up with his friends. The opportunity cost of going to the gym is which of the following?
a)
the time spent working out
b)
the homework and hanging out with friends.
c)
hanging out with friends
d)
all of his available options, the gym, homework and hanging out with friends.
59.
Today you chose to come to class. If you did not come to class today, you could have done a number of other activities. You could have slept, worked out, watched t.v., or worked. If you did not come to class today, you would have slept. Therefore, the opportunity cost of coming to class was
a)
sleeping, working out, watching tv or working at your job.
b)
the 50 minutes of sleep.
c)
making money at your job.
d)
the fact that you had to sit in class.
60.
Which of the following qualify something as being scarce?
a)
limited and non-desirable
b)
unlimited and non-desirable
c)
limited and desirable
d)
non-desirable
61.
All of the following factors of production are appropriately linked and might be helpful in the operation of a pizza company EXCEPT
a)
cash register - capital
b)
delivery person - labor
c)
business owner - entrepreneur
d)
company car - land
62.
Financial Capital is best defined as
a)
money used by entrepreneurs and businesses to buy what they need to make their products or provide their services
b)
collective amount of skills, abilities, and specialized talents of people
c)
also known as Capital Goods - Human made objects used to create other goods and services
63.
Because resources are scarce an economy needs to determine
a)
which resources to use and which resources to avoid
b)
how to avoid using resources
c)
how to allocate the scarce resources available (guns or butter)
d)
how to produce all goods and services that everyone wants
64.
The reason that one of the basic premises of economists is "there is no such thing as a free lunch" can be explained by
a)
money is required for all goods and services
b)
too much food leads to weight problems
c)
you always give up something to get something
d)
only tangible goods have costs
65.
Which of the following would be considered land?
a)
cattle
b)
phones
c)
water
d)
computers
e)
trees
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