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WorksheetsUnit 1 Economics Review
Total questions: 65
Worksheet time: 1hrs 6mins
Manufactured goods needed to produce other goods and services are called
nondurable goods
Gross Domestic Product (GDP)
capital goods
consumer goods
Study the graph. Suppose this nation starts with producing all military goods. It then decides to produce a mix of civilian and military goods represented by point B. What represents the cost in military goods given up?
the vertical distance between point X and point Y
the horizontal distance between point Y and point Z
the horizontal distance between point Z and point E
the vertical distance from point A to point X
In this production possibilities frontier, what could cause production to move from point "A" to point "E"?
factories that are available but idle
the availability of additional resources
increased productivity
economic growth
A popular model used to illustrate the concept of opportunity cost is
Productions Possibilities Frontier
Paradox of Value
Entrepreneurship
Factors of Production
Which of the following choices best describes what this production possibilities frontier is depicting?
alternative possibilities
cost of idle resources
opportunity cost
economic growth
What factor of production do these images illustrate?
Labor
Capital
Land
Entrepreneurship
Illustrated in the in the production possibilities curve, the company decides to make 4 gallons of red paint. How many gallons of blue paint would they produce?
2
6
3
8
What factor of production do these images illustrate?
Land
Capital
Labor
Entrepreneurship
The purpose of government in a command economy is to
ensure the availability of consumer goods
encourage entrepreneurs
make major economic decisions
promote economic freedom
An example of a market economy is
The Inuit
The United States
The former Soviet Union
North Korea
Which group of people ultimately determines the products that a free enterprise economy produces?
Congress
Local government
Property owners
Consumers
Who plays one of the most important roles in the free enterprise system by starting new businesses?
Entrepreneurs
Workers
Government
Consumers
A market economy
does not provide for everyone's basic needs
limits the choices of the goods and services
permits extensive government intervention
offers a high degree of certainty for its workers
The concept of voluntary exchange means
that no money was exchanged
people freely and willingly engage in market transactions
only workers will benefit from the exchange
neither buyers nor sellers make a profit
Which economic system can change direction quickly and drastically?
Traditional
Market
Command
Mixed
Diaguita Indians have lived in this region for generations...We grow beans, corn and potatoes on the mountain slopes. To irrigate these crops, we still use the channels built centuries ago by our ancestors. We also breed llamas...In our community, the more llamas you own, the richer you are.
In the economic system described in this passage, answers to the basic economic questions would be determined by
habit and customs
market prices
government leaders
individual consumers
Where would a mixed economy be located in the diagram?
W
Y
X
Z
While many grocery stores offer BOGOs (Buy 1 Get 1) specials, the reality is that both items have a cost. What economic term explains this principle?
scarcity
specialization
capital
TINSTAAFL
Which is not one of the basic economic questions
What to Produce?
How Much Does it Cost?
How to Produce?
For Whom to Produce?
The means by which a society answers the three basic economic questions is known as
Production analysis
Scale
Economic systems
Group economics
Economics
the study of how to meet unlimited, competing wants with limited resources
the study of how people need to budget their money
the study of people and how they spend their money
the study of how to meet limited wants with limited resources
If the production possibilities curve moves outward to the right, what would be the cause of the shift?
old, broken down equipment
improved technology
higher raw material costs
shortage of resources
Which of the following statements describes the concept of scarcity?
producing one good and neglecting another
when societies distribute goods unevenly
societies cannot produce enough goods for themselves
limited resources cannot satisfy unlimited wants
Which is the BEST definition of marginal benefit?
trading without using money
the rise of prices for goods and services
the additional gain from producing or consuming ONE more of something
the next best alternative
If we open a business, and I focus on making the goods, and you focus on the financials and marketing of the goods, our arrangement would be an example of:
specialization
competition
incorporation
division of land
On a PPC, a point anywhere ON the line is an example of:
inefficiency
terrible management
efficiency
a lack of resources
On a PPC, a point anywhere inside of the curve represents:
efficiency
impossibility
inefficiency; underutilization
division of labor
In a capitalist market, what is a typical role of the government?
provider of public goods
price setter
owner of all resources
decision-maker on how to use goods
In England, the government owns the airlines and hospitals, but most other businesses are privately owned. England's economy would be considered:
command
market
traditional
mixed
Which of the following is NOT a characteristic of a market economy?
private business
property rights
competitive markets
centrally-planned production
Which of these would be considered human capital?
an assembly line for producing cars
the purchase of new equipment that uses robots
a training course taken by an employee to learn new skills
a computer-assisted drawing program
Which of the following statements about entrepreneurs is false?
they take on very little risk when starting a business
they create jobs in the economy
they have profit motive as a goal when starting a business
they decide how to use resources to create new products
Minerals would be considered which one of the 4 Factors of Production?
labor
capital
land
entrepreneurship
If you decide to work an additional shift at work instead of going to the football game, what is the opportunity cost of your decision?
the money made by working extra hours
the opportunity to be promoted faster
the money you would have spent on dinner
the enjoyment of attending the game with friends
What is an opportunity cost of attending college?
lost income by not getting to work full-time
tuition
room and meal plan
the money you will earn after graduating from college
Why do opportunity costs arise in business?
resources are unlimited
consumers have a limited amount of wants and needs
resources must be used to produce one good or another because resources are limited
resources are free
What system is best suited for entrepreneurship?
capitalism
communism
command economy
traditional economy
Which of these is an essential characteristic of a command economy?
consumer decision-making
profit seeking
private business
government control
Which of these is a natural resource that package delivery companies require?
a large warehouse
a spare engine
a trained driver
gasoline supply
Which of these is a capital resource for a carpet manufacturing company?
tufting machine
bank account
warehouse building
parking lot
If you speed, you are likely to receive a traffic ticket. What type of incentive is a speeding ticket?
neutral
positive
negative
this is not an example of an incentive
Which economic system is most likely to have the narrowest range of incomes by attempting to distribute resources evenly?
command
traditional
market
mixed
The economic theory of scarcity states that because resources are limited, people have to do what?
hoard resources
pay taxes
borrow money
make choices
What is one way that technology can improve the production of goods?
Websites can allow consumers to purchase goods online.
Container ships can transport a number of goods at once.
Automation can create goods more cheaply and easily.
Airlines can send goods from one place to another.
Who was Adam Smith?
He was a philosopher who promoted the idea of free enterprise.
He was an economist who spoke against the market economy.
He was an official who ran an important government agency.
He was a producer who operated a factory in Scotland.
In a mixed market economy, what is a typical way the government can reduce unemployment?
The government can pay for projects to create work.
The government can control factories to provide jobs.
The government can create new farm fields to hire workers.
The government can raise taxes to encourage employment.
It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________.
opportunity cost; production cost
production cost; opportunity cost
What is an example of scarcity?
An abundance of resources
Limited resources
Renewable resources
A choice of resources
Which of the following will be accomplished by efficient allocations of the factors of production?
guaranteeing economic success
understanding whether a product will fail
fulfilling many needs and wants of a society
replenishment of limited resources
A basic concept in economics is that all resources are ___.
Scarce
Allocated
Valuable
Renewable
Economic Systems have ______ needs & wants, but ______ resources.
limited, unlimited
limited, limited
unlimited, limited
unlimited, unlimited.
How are individuals and economies similar?
Both must allocate resources
Both must categorize available resources
Both must recognize issues with resource.
Both must choose to use either renewable or nonrenewable resources
What are the three economic questions?
For whom to produce?
What to produce?
Where to produce?
When to produce?
How to produce?
Which of the following illustrates an opportunity cost?
James has enough money to by both socks and a book.
Alyssa does not have enough time to study for her test.
Jose only has time to study or play soccer.
Lydia does not have enough money to buy a new shirt.
Which economic system is described?
Strong property rights
Able to start new business
Few government regulations
Mixed Market
Market (Pure or Free)
Traditional
Command
The fundamental problem of Economics: Unlimited wants, limited resources.
Opportunity Cost
Trade Offs
Scarcity
Marginal Benefit
The factors of production (land, labor, capital, and entrepreneurship) are also known as this:
Trade Offs
Environmental Resources
Natural Resources
Productive Resources
The Honda plant divides their workers into specific jobs on their assembly line. The workers do this one task all day. This is an example of what economic principals?
Opportunity Cost and Trade Offs
Rational Decision Making
Division of Labor and Specialization
Positive and Negative Incentives
Looking at the PPC graph, which letters are efficient? Click ALL that apply.
A
B
C
E
F
Looking at the PPC graph, which letter(s) are inefficient? Click ALL that apply.
A
B
C
E
F
Looking at the PPC graph, which letter(s) are not possible? Click ALL that apply.
A
B
C
E
F
What is the opportunity cost of moving from D to C?
50 Clothes
25 Food
What is the opportunity cost of moving from 100 clothes to 150 clothes?
50 Clothes
25 Food
Demarco going to his job at Cook Out is an example of which productive resource?
Land
Labor
Entrepreneurship
Human Capital
In college, people can major in a wide variety of fields including medicine, journalism, business, and design among others. This is an example of the concept of
scarcity
specialization
elastic demand
progressive taxation
