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Econ Unit 2

Total questions: 45

Worksheet time: 2hrs 0mins

Name
Class
Date
1.
In economics, rational decisions occur when
                                                             SSEF2b
a)
suppliers lower their prices to increase demand
b)
marginal benefits of an action equal or exceed the marginal costs
c)
a budget is used for spending and saving decisions
d)
command economies answer the three basic questions
2.
Which is a human resource that Ms. Johnson could use for her art gallery?
SSEF1b
a)
Light fixtures to help display the artwork.
b)
A security system to protect the artwork.
c)
Knowledge of trends in modern art.
d)
A series of paintings by a prominent local artist.
3.
Which is a fundamental questions every society must answer?
SSEF1a
a)
What goods and services are to be produced?
b)
How are the goods and services to be produced?
c)
Who will get the goods and services that are produced?
d)
All of the above
4.
A and B both wash cars and change oil. Currently, each man washes and changes oil by himself, but the process takes lots of time. they would MOST LIKELY improve their efficiency if
SSEF2b
a)
A & B wash a car and chang eoil together
b)
A washes car while B changes oil
c)
A washes B car while B washes A's car
d)
A and B reduce the number of cars they wash
5.
Susan offers to trade her old iPod for Claudia's cell phone and Claudia accepts. Assuming both products work perfectly, we can conclude that
SSEF3b
a)
Claudia is now happier than Susan.
b)
neither party has gained because the exchange was fraudulent
c)
both people have gained because the exchange was voluntary and non-fraudulent
d)
Susan places the same value on cell phones as she does for iPods
6.
Investing heavily in new capital equipment and technology is MOST related to
SSEF6b
a)
supply and demand
b)
opportunity costs
c)
economic growth
d)
economic freedom
7.
Competition and free enterprise are most common in which type of economic system?
SSEF4a
a)
traditional
b)
market
c)
communist
d)
planned
8.
Economic growth is often tied to investment in machinery, new technology, and education of the population. This is because
SSEF6b
a)
these items lead to a greater productivity of inputs
b)
the only way to measure economic growth is to observe change sin these factors
c)
investment in these items are sole determinant of output
d)
all of these items improve captal resources
9.
There are four types of economic systems.  Most economies are _____. 
SSEF4a
a)
Traditional 
b)
Command 
c)
Market 
d)
Mixed
10.
Which BEST describes productivity?
SSEF6a
a)
the interaction of buyers and sellers
b)
the relationship of inputs and outputs
c)
producing at high opportunity costs
d)
trading based on absolute advantage
11.
In this type of economy, the government places control on businesses, but the individual decides what to make. 
SSEF4b
a)
Mixed
b)
Market
c)
Command 
d)
Traditional
12.
Which provides the greatest incentive for entrepreneurs to take risks?
SSEF1c
a)
prices
b)
inflation
c)
profits
d)
interest
13.
If the producer in the PPC seen here is producing at point X, moving to point Z would mean an opportunity cost of
SSEF1d
a)
3 pounds of cheese
b)
7 pounds of cheese
c)
10 gallons of milk
d)
20 gallons of milk
14.

Which of these terms is the BEST synonym for the word "entrepreneur"? SSEF1c

a)

Business owner

b)

Homeowner

c)

Employee

d)

Student

15.

Land, labor, capital, and entrepreneurship are the: SSEF1b

a)

Basis of employment

b)

Results of production

c)

Factors of production

d)

Results of supply and demand

16.

As one of the factors of production/productive resources, capital can be defined as: SSEF1b

a)

the goods and services a business produces.

b)

the supply of labor needed to produce goods.

c)

the people that purchase goods and services.

d)

the equipment and factories needed to produce goods.

17.

Which of these BEST represents capital investment for a company? SSEF1b

a)

advertising

b)

renting space

c)

buying new equipment

d)

hiring new employees

18.

An opportunity cost is: SSEF1d

a)

usually absent in a command economy.

b)

when goods are recycled into other goods.

c)

the next-best alternative you give up in order to do something else.

d)

is only an issue when there is not a scarcity of goods and resources.

19.

Which type of cost occurs when an individual pays for a piano lesson instead of going to a movie? SSEF1d

a)

fixed cost

b)

marginal cost

c)

residual cost

d)

opportunity cost

20.

As developing nations industrialize and make use of capital resources, new challenges to the supply of the world's natural resources will no doubt appear because: SSEF1b

a)

the newly developed countries will industrially overtake the existing developed countries.

b)

the rate of depletion will increase as developing countries begin to use more natural resources.

c)

more developed countries do not want developing countries to become more economically independent

d)

the developing countries will learn to bargain with their natural resources and impact the economies of other nations.

21.

The basic economic condition that exists when unlimited wants exceed limited productive resources is called: SSEF1a

a)

Capital

b)

Scarcity

c)

Opportunity cost

d)

Hyperinflation

22.

Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr. Stevens decides to open his sporting goods store, what is the opportunity cost of this decision? SSEF1b

a)

the opportunity to rent it to another tenant

b)

the property tax he would pay on the building

c)

the opportunity he has to run his own business

d)

the profits he would make from his sporting goods store

23.

· ditch digger · computer programmer · international financier

ALL of these are examples of: SSEF1b

a)

skilled labor.

b)

human resources.

c)

unskilled labor.

d)

capital resources

24.

In economics, rational decisions occur when? SSEF2b

a)
suppliers lower their prices to increase demand
b)
marginal benefits of an action equal or exceed the marginal costs
c)
a budget is used for spending and saving decisions
d)
command economies answer the three basic questions
25.

Which is a fundamental questions every society must answer? SSEF4

a)
What goods and services are to be produced?
b)
How are the goods and services to be produced?
c)
For whom are the goods being produced
d)
All of the above
26.

Which type of economic system would have the least amount of government regulation? SSEF4a

a)
Traditional
b)
Command
c)
Market
d)
Socialist
27.

Jingo was born to be a warrior-hunter,   Jingo trades the furs of animals he catches to other families and tribes for many goods.  What economic system is this? SSEF4  

a)
Market
b)
Command
c)
Traditional
d)
Capitalist
28.

Consumer sovereignty, profit motive, private ownership, and competition are all most associated with which economic system? SSEF4a

a)
Command
b)
Market
c)
Traditional
d)
None of the above
29.

We start a new colony on mars and must distribute the scarce resources we have to everyone.  We do so by having our leader allocate them as he decides.  This strategy for allocating resources would be considered: SSEF4c

a)
Lottery
b)
Authority
c)
Sharing
d)
Majority rule
30.

Opportunity Cost is the? SSEF1d

a)

item exchanged for another item

b)

difference between a need and want

c)

value of the next best alternative

31.

Mary decides to produce and sell apple juice. She leases an apple orchard and renovates her kitchen to produce and bottle the apple juice. Mary hires three employees. Two employees will maintain the apple orchard and bottle the juice, and one will market the apple juice using the Internet. In the manufacture and sale of the apple juice, what factor of production does Mary represent? SSEF1

a)

Labor

b)

Entrepreneurship

c)

Capital

32.

According to the principle of the invisible hand....... SSEF1

a)

everyone acting in his or her self-interest leads to the best outcomes for society.

b)

government must carefully guide economic activity to reach the best outcomes for society.

c)

government policies work like an invisible handle on a safe to protect valuable resources.

33.

What is the opportunity cost in moving from point C to D? SSEF2a

a)

54 Balls

b)

19 Balls

c)

75 Caps

34.

When deciding which of the two items to purchase, one should always? SSEF3b

a)

Choose the item that costs less.

b)

Choose an item after comparing the costs and benefits of both items.

c)

Choose the most expensive

35.

When a person rents an apartment, who benefits from the transaction? SSEF3b

a)

Only the person renting the apartment.

b)

Only the landlord.

c)

Both the person renting the apartment and the landlord.

36.

Rational economic decisions, whether it be a small or large transaction, will always have? SSEF2b

a)

both parties having higher marginal benefits than costs

b)

only one party who has more marginal benefits than costs

c)

more government regulation to ensure consumer protection

37.

All of the following are factors of production except? SSEF1b

a)

government

b)

land

c)

capital

38.

A production possibility frontier will shift outward if? SSEF2a

a)

there is a technological improvement

b)

there is an increase in the labor force

c)

all of the above

39.

Something that encourages or motivates a person toward action is referred to as? SSEF2b

a)

total revenue

b)

incentive

c)

scarcity

40.

Complete the following phrase: "Because _______ exists, _______ have to be made." SSEF1a

a)

scarcity, choices

b)

money, choices

c)

choice, decisions

41.

Manpower Inc. provides temporary workers trained in typing, clerical, and secretarial work. Manpower Inc. provides which factor of production? SSEF1b

a)

Natural Resources

b)

Human Capital

c)

Physical Capital

42.

Which of the following would most likely be seen in the obituary of Adam Smith? SSEF1

a)

Creator of the production possibility curve

b)

Father of the Command Economy

c)

Founder of Modern Economics

43.

In the hands of a trained plumber, what would the following image be? SSEF1b

a)

Natural Resources

b)

Entrepreneurship

c)

Physical Capital

44.

Percy has $30. He has 3 things he would like to do with the money. He can buy his mother a birthday present, buy 2 new CDs, or purchase a new badminton racket. He finally decides to buy his mother a present. His next choice would have been to buy 2 new CDs. What was his opportunity cost? SSEF1d

a)

the value of his mother’s present

b)

the enjoyment of listening to the CDs

c)

the use of the new racket

45.

A recent drought may cause farmers to rethink the methods of farming. This rethinking will cause the farmers to look at which economic question? SSEF4a

a)

How to produce

b)

Why produce

c)

For whom to produce