Economics Chapter 1 Review
A pie graph would be best type of graph to show a. a comparison of Internet use in various regions of the world b. a comparison of Internet use in Europe in 2000 and 2005 c. the change in Internet use in Europe over the last five years d. the increase in Internet use among teenagers in Europe
a comparison of Internet use in various regions of the world
Which of the following would macroeconomics study? a. a general rise in prices b. a decline in coffee prices c. the success rate of sandwich shops d. the work habits of students
a general rise in prices
A normative economist might conclude that a. a lottery can be conducted in several ways b. certain types of lotteries raise millions of dollars c. a lottery is a bad policy because it burdens the poor d. a lottery is good because it separates people from their money
a lottery is a bad policy because it burdens the poor
A microeconomist would study a. a general decline in prices b. a rise in tea prices. c. the ups and downs of business cycles d. the impact of national tax policies
a rise in tea prices.
A supermarket running out of bananas is an example of a. horror b. a shortage c. utilization d. socialism
a shortage
What does the saying "There is no such thing as a free lunch" mean? a. free lunches were outlawed in 1920 b. You will receive a bill for the "free" lunch at a later date c. free lunches often cause food poisoning d. everything costs something
everything costs something
An example of underutilization is producing a. as many muffins and widescreen televisions as the economy is capable of making b. fewer muffins and widescreen televisions than the economy is capable of making c. more muffins and fewer widescreen televisions d. fewer muffins and more widescreen televisions
fewer muffins and widescreen televisions than the economy is capable of making
Adam Smith argued that a nation would be wealthier if it engaged in a. fraud b. free trade c. theft of other nations resources d. genocide
free trade
A macroeconomist would be interested in the a. general rise of prices b. decline of cheese prices c. fluctuation of oil prices d. sharp rise of coffee prices
general rise of prices
An example of a trade-off is a. giving up going to a movie to spend time shopping b. giving up going to a movie because it got bad reviews c. going to a movie to see your favorite movie star d. not going to a movie because your wife isn't feeling well
giving up going to a movie to spend time shopping
A country seeking to increase tourism will probably increase the production of a. tractors b. hotels c. nuclear weapons d. artificial bologna
hotels
A society with a large unskilled labor force will most likely practice a. machine-intensive farming methods b. labor-intensive farming methods c. machine and labor-intensive farming methods d. importing food to avoid famine
labor-intensive farming methods
Into what four categories do economists divide factors of production? a. land, labor, capital, and entrepreneurship b. land, labor, money, and entrepreneurship c. resources, labor, capital, and entrepreneurship d. resources, labor, money, and entrepreneurship
land, labor, capital, and entrepreneurship
A graphic organizer that is especially useful for showing changes over time is a a. line graph. b. bar graph. c. pie graph. d. circle graph.
line graph.
The satisfaction received from using one more unit of a good or service is called a. opportunity cost b. opportunity benefit c. marginal cost d. marginal benefit.
marginal benefit.
A discussion on whether an economic practice is ethical would likely be found in an article on a. businesses that failed b. macroeconomics c. positive economics d. normative economics
normative economics
Which of the following explains economics as it should be? a. microeconomics b. ideal economics c. delusional economics d. normative economics
normative economics
What does a point inside the curve of a PPC indicate? a. all resources are fully employed b. not all resources are fully employed c. employees are stealing d. workers have sabotaged machinery
not all resources are fully employed
The addition of new resources often enables a nation to a. produce more goods and services b. produce less goods and services c. produce more goods but fewer services d. invade other nations and steal their resources
produce more goods and services
What is another named for the production possibilities curve? a. production possibilities border b. production possibilities frontier c. production possibilities wall d. production possibilities turn
production possibilities frontier
Which is not considered a need? a. food b. clothing c. shelter d. smartphone
smartphone
Opportunity costs would be increased by a. firing all workers and moving the plant to China b. removing all of the safety features from factory machinery c. an across the board increase on all products d. switching from producing one product to another
switching from producing one product to another
To be a successful entrepreneur requires willingness to a. play it safe b. borrow money c. take risks d. abandon your family
take risks
The United States decides what goods to produce by letting a. only the government decide b. members of Congress decide c. only the producers decide d. the producers and consumers decide
the producers and consumers decide
Deciding to go to a ballgame rather than do your homework is an example of a(n) a. production possibility b. a bad idea c. trade-off d. person about to lose their college scholarship
trade-off
Harvesting less wheat than the land is capable of producing is an example of a. marginal costs b. opportunity costs c. good farming practices d. underutilization
underutilization
Which of the following best describes wants? a. limited and ever changing b. unlimited and ever changing c. limited and never changes d. things you'll never have
unlimited and ever changing
A line graph that shows rising and falling profits over several years would have a(n) a. A 90 degree slope b. downward slope c. varied slope d. almost level slope
varied slope
Wants are unlimited and a. constant b. free c. never fulfilled d. ever changing
ever changing
Being guided by self-interest when making a decision means that you a. act in a selfish manner b. attempt to maximize utility c. ignore the wishes of your family d. reduce the incentives of others
attempt to maximize utility
Data on DVD sales for three different years can best be compared by using a a. crystal ball b. bar graph c. psychic d. pie graph
bar graph
Which is especially useful for comparing data? a. line graph b. bar graph c. pie graph d. circle graph
bar graph
Which of the following buys goods for personal use? a. consumer b. a person who is broke c. people who have not maxed out their credit cards d. client
consumer
The governments of some nations answer the question of what to produce to a. enhance free trade b. control the economy c. make people dependent on the government. d. make the economy worse
control the economy
Which of the following examines the costs and expected benefits of a choice? a. choice-benefit analysis b. cost-profit analysis c. cost-benefit analysis d. choice-profit analysis
cost-benefit analysis
The benefits and costs of a choice is shown by using a a. statistical table. b. decision-making grid. c. circle graph. d. line graph
decision-making grid
Which term means "making decisions based on what you believe is the best combination of costs and benefits?" a. economizing b. impulse spending c. cutting back d. motivating
economizing
Using a PPC can help to increase a company's a. efficiency b. underutilization c. losses d. employee theft
efficiency
Which of the following involves using resources to produce the maximum amount of goods and services? a. utilization b. underutilization c. efficiency d. overefficiency
efficiency
A country with a large, relatively unskilled labor force using labor-intensive methods to grow crops is an example of a. efficient use of scarce resources b. inefficient use of scarce resources c. a third-world country d. marginal costs
efficient use of scarce resources
