Econ H Ch 1 Test

According to circular-flow model, the flows of resources and products are supported by the flows of income and expenditure

true

Because productive resources are scarce, goods and services are scarce, too

true

Goods and services are scarce

true

Example of a renewable resource, if used properly.

wildlife

Renewable resource, if handled properly?

wildlife

Labor is a type of human resource

true

Productive resources are defined as the inputs used to produce the goods and services that people want

true

Productive resources include human resources and capital resources

true

Tutoring is an example of a capital good

true

an exhaustible resource can easily be used up

true

future economic trends are not influences by economic theories

true

market economics might focus on the breakfast cereal industry

true

there is no such thing as a truly free good

true

time and information are essential to making rational consumer choices

true

Ex of a natural resource:

water

Define the term entrepreneur

A person who tries to earn a profit, a person who develops a new product, a person who improves an existing product

If you decided to attend a concert instead of babysitting, which of the following did you need to consider? A. Opportunity cost B. Sunk cost C. Scarcity D. Economic theory

A. Opportunity cost

In the seventeenth century, why did many glassmakers in England refuse to relocate to Virginia? A. The opportunity cost of doing so was too high B. The opportunity cost of doing so was too low C. There was no opportunity cost involved D. There was no consideration of opportunity cost

A. The opportunity cost of doing so was too high

Which of the following statements is true of opportunity costs? A. It is the value of all alternatives you pass up when you make a choice B. It is the value of the best alternative you give up when you make a choice C. It can only be measured in dollar terms D. It is the same for all individuals

B. It is the value of the best alternative you give up when you make a choice

Which of the following would lead to a sunk cost? A. Buying a new CD at an outlet store B. Putting a non-refundable deposit at one college and then attending another C. Deciding to study on a Friday night instead of going to a party D. Paying the landscaper to cut your lawn

B. Putting a non-refundable deposit at one college and then attending another

Which of the following is an example of a sunk cost? A. Exchanging one brand of tomato sauce for another one at the grocery store B. Ordering dessert at a restaurant even though you're full C. Throwing away the newspaper before you've read it because your cat tore it into pieces D. Buying a new tire

C. Throwing away the newspaper before you've read it because your cat tore it into pieces

All circular-flow model focus on interactions between households and firms

False

Making rational consumer choices can be done without time and information

False

Once the opportunity cost of attending college is calculated, it is clear that it is more useful for every young person to go to college instead of enter the work force.

False

Opportunity costs are always measured in dollar amounts.

False

People make decisions based upon the expected opportunity cost of a choice.

False

You should carefully consider sunk costs when making economic decisions.

False

Your opportunity cost never depends on your alternative.

False

Which of the following statements best describes the economic problem?

The productive resources needed to satisfy our unlimited wants are too scarce to do so

What defines economics?

The study of how people use scarce resources to satisfy unlimited wants

Ex of a capital good?

bulldozer

Good:

deli meat

A bus station is an example of capital good

true

An entrepreneur is...

-a person who tries to earn a profit -a person who develops a new product -a person who improves an existing product

Subjects of economics:

-unemployment rate -stock market -shoe industry NOT -anything that's free

Which of these is the ultimate limiting factor in making choices? A. Wealth B. Knowledge C. Time D. Location

C. Time

Which of these does not describe sunk costs? A. Can't be recovered B. Have already been incurred C. Are irrelevant D. Will be refunded

D. Will be refunded

What is an example of a good?

Deli meat

If you must stay at home and study for an upcoming economics test, the opportunity cost of studying would most likely be highest at which of the following times? A. Monday evening B. Wednesday morning C. Thursday afternoon D. Friday evening

Friday evening

A productive resource is scarce if it is not freely available

true

According to economists, which of these leads the average person to choose the most valued alternative among a number of possibilities? A. Rational self-interest B. Scarcity C. Sunk cost D. Opportunity cost

Rational self-interest

Provide an example of an entrepreneur who introduced a new product or found a better way to produce an existing one.

Steve Jobs, Elon Musk, and whomever else your heart wants

In deciding if you want to attend college, which of the following would not involve an opportunity cost? A. Value of goods and services that could be purchased with money spent on books B. Value of goods and services that may be purchased with tuition money C. the money you could earn at a full-time job D. The cost of room and board

The cost of room and board

Which of the following accurately describes ecconomics?

The study of how people use scarce resources to satisfy unlimited wants

Although it is assumed that people are driven by rational self-interest, this does not mean that people are not concerned for others

True

Because acquiring information about alternatives is costly and time-consuming, you usually make choices based on limited or even faulty information.

True

Economists agree on the most theoretical principles based on positive economic analysis

True

Even a person with unlimited wealth must deal with opportunity costs.

True

Households both demand services and supply resources in the economy

True

In the context of economics, marginal is defined as incremental or additional

True

It is not wise to spend your time and effort figuring out how to avoid sunk costs.

True

Market economics might focus on the shoe industry

True

Sunk costs are irrelevant.

True

With every choice comes an opportunity cost.

True

Example of a natural resource

Water

How does the scarcity of your time affect your study/homework habits?

You have to decide which subjects to study more for; organize time

Example of a capital good

a screwdriver

A good is free if it involves no apparent cost to you

false

An exhaustible resource can be drawn upon indefinitely, as long as it is used widely

false

Depending on the situation, an entrepreneur does not always need to assume the risk of success or failure in a business venture

false

Economic theories are directly responsible for causing future economic trends

false

Getting a manicure is an example of a good, not a service

false

In order to be accurate, theories should be detailed in nature

false

a tree is an example of a capital resource

false

economic decision makers need not consider all costs that are related to their choice

false

the problem of a scarce resources but unlimited wants exists only for the poor

false

Productive resources

human resources, natural resources, capital resources

Productive Resources:

human resources, natural resources, capital resources NOT: goods and services

Which of the following statements best describes the ecconomic problem?

the productive resources needed to satisfy our unlimited wants are too scarce to do so

types of goods subject to economic interpretation

the unemployment rate, the stock market, industries

Service:

writing

What is an example of a service?

writing