WorksheetsEconomics Unit 1 Study Guide
Total questions: 30
Worksheet time: 38mins
Name
Class
Date
1.
1. Economics is the study of how people
a)
Calculate their income tax
b)
Choose from limited resources to meet their needs
c)
Respond to war and drought
d)
Gain knowledge and skills from study and experience
2.
2. Physical objects such as clothes or shoes are defined as
a)
goods
b)
labor
c)
capital
d)
services
3.
3. Something such as air, food, or shelter that is necessary for survival is a
a)
need
b)
service
c)
want
d)
worker
4.
4. All goods and services we produce are
a)
expensive
b)
scarce
c)
recyclable
d)
efficiently produced
5.
5. The resources used to make all goods and services are called
a)
factors of production
b)
the gross national product
c)
the production possibilities frontier
d)
opportunity costs
6.
6. Which of the following is not a factor of production?
a)
a woman who makes a quilt
b)
the cotton cloth and thread used to make the quilt
c)
the children whom the woman supports with her labor
d)
the wood frame on which the quilt is sewn
7.
7. Any human-made resource that is used to create other goods and services is
a)
a service
b)
an entrepreneur
c)
capital
d)
labor
8.
8. Which of the following is not an example of capital?
a)
the paint used by a house painter
b)
the computer used by an accountant
c)
the trees used to make paper
d)
the factory where a good is produced
9.
9. Natural resources that are used to make goods and services are considered
a)
equipment
b)
money
c)
labor
d)
land
10.
10. A student buys a soda from the vending machine with a choice of soda or water. What is the opportunity cost?
a)
the soda that was purchased
b)
the vending machine
c)
water
d)
orange soda
11.
11. A trade-off is
a)
a purchase in a marketplace
b)
an alternative that we sacrifice when we make a decision
c)
any good or service a consumer needs
d)
a factor of production
12.
12. An opportunity cost is
a)
the most desirable alternative given up as a result of a decision
b)
any good or service we barter for another good or service
c)
the cost in dollars and time of any decision
d)
a choice between two equally desirable goods or services
13.
13. An example of opportunity cost would be
a)
not being able to afford a family trip because the family buys a computer
b)
buying a movie ticket
c)
the price of gasoline for a family trip
d)
buying a computer to help get better grades in school
14.
14. If Karen gets up early and studies three hours for a test, she is likely to get an A. If she sleeps in, she will probably get a C. What is the opportunity cost of sleeping in?
a)
three additional hours of sleep
b)
getting a ride to school
c)
a C
d)
three additional hours of studying
15.
15. A production possibilities curve (PPC) is
a)
the line on a production possibilities graph that shows maximum possible output
b)
the points on a production possibilities graph that show an underutilization of resources
c)
the points on a production possibilities graph that show the total profits of an economy
d)
the line on a production possibilities graph that shows unattainable outputs
16.
16. A country's production possibilities depend on
a)
its technological level and its available resources
b)
its natural resources
c)
its human capital and its physical capital
d)
all of the above
17.
17. Using resources in such a way as to maximize the production of goods and services is called
a)
efficiency
b)
underutilization
c)
thinking at the margins
d)
growth
18.
18. If the country uses all of its resources to make shoes, how many pairs of shoes will it be able to make?
a)
21 million
b)
12 million
c)
15 million
d)
zero
19.
19. Which of the following is not a production possibility for the country?
a)
14 million tons of watermelon, 12 million pairs of shoes
b)
20 million tons of watermelon, 5 million pairs of shoes
c)
21 million tons of watermelons, zero shoes
d)
18 million tons of watermelons, 12 million pairs of shoes
20.
20. What is the opportunity cost of increasing watermelon production from 14 million tons to 18 million tons?
a)
5 million pairs of shoes
b)
3 million pairs of shoes
c)
4 million tons of watermelon
d)
3 million tons of watermelon
21.
21. What is the opportunity cost of increasing shoe production from 14 million pairs to 15 million pairs?
a)
1 million pairs of shoes
b)
8 million pairs of shoes
c)
4 million tons of watermelon
d)
8 million tons of watermelon
22.
22. What is the per-unit opportunity cost (PUOC; a.k.a. marginal opportunity cost) of increasing shoe production from 12 million pairs to 14 million pairs?
a)
2 pairs of shoes
b)
3 pairs of shoes
c)
3 tons of watermelon
d)
6 tons of watermelon
23.
23. A point that lies inside of a production possibilities curve is said to be
a)
efficient.
b)
inefficient
c)
unattinable.
d)
none of the above.
24.
24. A point that lies outside of a production possibilities curve is said to be
a)
efficient.
b)
inefficient.
c)
unattainable.
d)
none of the above.
25.
25. A PPC is typically represented by a curved line due to the principle of
a)
increasing opportunity costs.
b)
supply and demand.
c)
economic choice.
d)
entrepreneurship.
26.
26. All of the following would cause an outward shift in a country's production possibilities curve EXCEPT
a)
Technology improves
b)
More resources are discovered
c)
Production is inefficient
d)
Outputs are increased
27.
27. All of the following are true of a cost-benefit analysis EXCEPT
a)
It is a decision-making tool.
b)
Costs always involve money.
c)
The wise choice is the one that gives the greatest benefit at the least cost.
d)
It involves alternatives and trade-offs.
28.
28. If Country A can produce a good at a lower per-unit opportunity cost (PUOC) than Country B, then Country A is said to have a(n)
a)
absolute advantage.
b)
comparative advantage.
c)
absolute disadvantage.
d)
comparative disadvantage.
29.
29. What is an entrepreneur?
4 lines
30.
30. How is scarcity related to opportunity costs and the study of economics?
4 lines
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