Econ Test Chapter 1

A system for coordinating the production and distribution of goods and services is known as: a. an economy. b. a tradeoff. c. an opportunity cost. d. a society.

A

Activities produced in an economy are known as: a. services. b. resources. c. wants. d. goods.

A

Any long-lasting good that is used to make other goods or services describes the scarce resource: a. physical capital. b. human capital. c. land. d. labor.

A

Minimal amounts of food, water, and shelter necessary for survival are known as: a. needs. b. wants. c. resources. d. goods.

A

The basic elements from which all goods and services are produced are known as: a. resources. b. tradeoffs. c. an economy. d. a society.

A

The study of how people make decisions and how those decisions affect others in the economy is the study of: a. microeconomics. b. macroeconomics. c. normative economics. d. negative economics.

A

The time and effort people contribute to the production process describes the scarce resource: a. labor. b. entrepreneurship. c. land. d. capital.

A

Scarcity in economics exists: a. if we desire more of something than we can have. b. if we desire nothing. c. if we desire less of something than we can have. d. if we desire something.

A. if we desire more of something than we can have

Which of the following is NOT an example of a resource? a. services b. land c. capital d. entrepreneurship

A. services

A collection of buyers and sellers, wherever they may be is a: a. economy b. market. c. entrepreneur. d. society.

B

An economy is efficient if it takes every opportunity to: a. make some people better off. b. make some people better off without making other people worse off. c. cut costs. d. produce more goods and services

B

What factor makes an economy inefficient? a. There is an opportunity to eliminate tradeoffs. b. Some people could improve their economic status without hurting others. c. It has high opportunity costs. d. It is not using all of its resources.

B

Which of the following is a normative statement? a. The unemployment rate rose sharply in 2008. b. Too many teenagers live in poverty. c. The opportunity cost of an action is the value of the next-best alternative. d. People buy less gasoline when their incomes fall.

B

A country's economy has declined by 5% in the past year. How has that country's production possibilities frontier changed? a. The frontier has a shallower curve than before. b. Movement has taken place along the production possibility frontier. c. The frontier has moved to the left. d. A rightward shift of the frontier has taken place.

C

Any collection of people who share a common bond, such as those living in the same city or country, are known as: a. a resource. b. a want. c. a society. d. a need.

C

Anything long-lasting that is created by humans for use in production describes the scarce resource: a. land b. capital. c. entrepreneurship. d. labor.

C

Which of the following is a positive statement? a. Professional athletes are paid too much. b. The federal budget deficit is too large and needs to be reduced. c. There has been an increase in the rate of unemployment. d. Women and men should receive the same rate of pay

C

Which of the following questions would be explored in the study of macroeconomics? a. Is a college education a good investment? b. How will faster Internet connections affect the film industry? c. What causes inflation and makes prices rise? d. How many hours should you work for pay each week

C

Why do the tools of economics apply to fields outside of the production and distribution of goods and services? a. People make all decisions based on how much money they have available. b. The field of normative economics was developed to answer these kinds of questions. c. Economic concepts such as trade-offs apply to practically every area of life. d. Microeconomics and macroeconomics explain both small- and large-scale economic activities.

C

Anything drawn from nature for use in the production of goods and services describes the scarce resource: a. entrepreneurship. b. labor. c. capital. d. land

D

Physical items produced in an economy are known as: a. wants. b. services. c. resources. d. goods.

D

The skills and knowledge of workers describes the scarce resource: a. entrepreneurship. b. labor. c. physical capital. d. human capital.

D

The tendency for the opportunity cost of a good to rise as more of the good is produced is called: a. the law of decreasing opportunity cost. b. the law of constant opportunity cost. c. TINSTAAFL. d. the law of increasing opportunity cost

D

Things that we desire that are not essential to life are known as: a. resources. b. needs. c. goods. d. wants.

D

To an economist, the cost of something is the: a. total amount of money you paid for it. b. total amount of time it took you to get it. c. total amount of labor you had to exert to get it. d. total of all that you gave up to get it.

D

Whenever the scarcity of money or time forces you to make a choice, you face: a. choosing a service rather than a good. b. choosing a good rather than a service. c. a need. d. a tradeoff

D

Which statement correctly contrasts positive and normative economics? a. Positive economics deals with opinions and ideals, but normative economics does not. b. Positive economics includes information based on facts, and normative economics relies only on opinions. c. Normative economics considers only questions about the overall economy, and positive economics deals mostly with decision-making. d. Normative economics weigh questions relating to ideals, but positive economics does not.

D

Economics is: a. the study of money. b. the study of government. c. the study of markets and prices. d. the study of choice under conditions of scarcity

D. The study of choice under conditions of scarcity

Two movies you want to see are releasing this weekend but you only have enough money today to see one. This statement best represents the economic concept of: a. entrepreneurship. b. capital. c. services. d. scarce resources

D. scarce resources

A curve showing the maximum quantity of one good that can be produced for each possible quantity of another good produced is: a. a cost. b. a production possibilities frontier. c. a tradeoff. d. a resource.

b

The willingness of people to organize, operate, and assume the risks involved with business ventures describes the scarce resource: a. physical capital. b. human capital. c. entrepreneurship. d. labor.

c

Sonya's school cafeteria has three meal options that each cost $2.50: a salad bar, a sandwich with an apple, and a hot entrée. Sonya considers both the salad bar and the hot entrée one day, and eventually chooses the hot entrée . What is the opportunity cost of her decision? a. $2.50, the sandwich with apple, and the hot entrée b. zero, because they are the same price c. $2.50 and the sandwich with apple d. a salad from the salad bar

d

The opportunity cost of something is: a. equal to the money cost. b. higher for services than for goods. c. higher for goods than for services. d. what you give up to get it.

d

The term _____________ is used to describe the four types of resources, along with anything made with these resources that is then used to make something else: a. output. b. tradeoff. c. scarcity. d. input

d