Economics Unit 1 Test

What opportunity cost might be associated with purchasing Car C? Select one:

Added expense for repairs.

What opportunity cost might be associated with purchasing Car A? (Select all answers that apply.)

Added expense for sales tax. Added expense for monthly payments. Added expense for insurance.

Which car would you choose? Explain why.

I would choose car C, because miles doesn't necessarily mean that it's bad car.

Based on the same scenario, which of the following is correct? Select one:

If Ameen decides to go straight to work for his father, his opportunity cost would be the learning experiences of college as well as any potential extra earnings that he could make once he earns the college degree.

There are initial expenses of owning a car that must be paid in order to operate the vehicle. Typical costs for these items are shown in the table below. Complete this table, using the car costs below, and a sales tax rate of 5%. (Enter only numbers; do not enter commas or decimal points). Car A: New car $20000 Car B: Used car with 60000 miles $5000 Car C: Old junker with 150000 miles $1000 Then to answer the questions that follow.

Initial CostsCar ACar BCar C Title and Registration $100 $100 $100 Sales Tax (Cost of car multiplied by 0.05) $1000 $250 $50 Three months insurance$600 $400 $200 Down Payment/Payment$1000 $1000 $1000 Total Initial Costs$2700 $1750 $1350

Which of the following best describes opportunity cost?

Potential benefits or gains that you give up by choosing one thing over another.

To illustrate the fact that you must give up at least one thing in order to get something else, consider this chart which breaks a 24-hour day into three equal sections of 8 hours for sleep, play, and work: What would you have to give up if you wanted to get 10 hours of sleep one night?

You would either have to take 2 hours out of work OR play, OR a combination of time out of each that would equal 2 hours.

Scenario: College or Full-time Job? When Ameen graduates from high school, he will be offered a job working full-time at his father's business. He would be earning $50,000 a year, which is a really nice salary for someone so young! Ameen wanted to go to college so that he could study more about business and business management. He is trying to decide if he should go to college and study business, or if he should go straight to his father's business and begin working and making money. Question: Which of the following correctly pairs the opportunity cost of the decisions that Ameen might make?

If Ameen decides to go to college, his opportunity costs include the salary that he could have earned working at his father's business.

Under Armour: A Brawny Tee House? No sweat Eleven years ago, Kevin A. Plank was a walk-on football player at the University of Maryland who relished throwing his body at hulking opponents. But he hated how the cotton T-shirts under his uniform got sopping wet with sweat or rain. By then, cycling outfits and football undershorts were made with moisture-wicking synthetic fabrics. Plank, a starter during kickoffs and punts, wondered why not gridiron T-shirts, too? He tore the content label off a pair of his wick-away shorts, bought the same material from a fabric store, and gave a tailor $460 to sew seven shirts. "I set out to build a better football undershirt," he says. Plank's teammates loved the tees. So he drove to New York's garment district, had hundreds more samples made, and dubbed his invention "Under Armour." Now, at 33, Plank is the multimillionaire head of an athletic apparel powerhouse. No Instant Success Yet it didn't happen as fast as Plank originally expected. "At 23, I was probably the smartest guy in the world," he jokes. "But I learned early on [that] this is not about one blast of exposure or one person wearing the product." Operating at first out of his grandmother's Georgetown house, Plank spent four years tirelessly pitching his product to college and NFL teams. "We convinced these big tough football players to start wearing tight-fitting synthetic shirts, which was completely new and different," he says... The pros' acceptance brings Under Armour an authenticity that advertising alone can't create. Dick's Sporting Goods Inc., a large national chain that's one of Plank's biggest retail partners, has set up special Under Armour "concept shops" within six of its stores. "Our goal is to have athletes of all ages know that we are the headquarters for Under Armour products," says Jeffrey R. Hennion, Dick's chief marketing officer. The appeal, he adds, is the notion that Under Armour can help anyone perform at a higher level. That cachet also gives Plank license to charge $40 for a short-sleeve T-shirt.

Kevin Plank is the ENTREPRENEUR who started the company Under Armour. At first, Plank himself was the only (NOT PRODUCTION OR EMPLOYEE) source involved in his venture. His initial investment of $460 and the fabric he bought would be considered CAPITAL. The property purchased for his first facility would be considered LAND, as would the cotton used in some of his later garments.

How does scarcity affect your life? Think of at least 2 examples of things you had to do without due to limited resources. Maybe you didn't have enough money to pay for the items, or the items themselves were in short supply. Explain how you would adjust to the situation?

Phone data: I had limited data but I only used it in certain situations, like trying to find my way to a certain place or back home. Or when losing power, you could use a battery for a flashlight only when needed.

Scenario: Musician or Engineer? Scarlett is a talented musician and enjoys performing and writing music. She would love to be a professional musician, but is concerned about supporting herself financially as an artist. Since she is about to graduate from high school, she is really starting to think about career options. She is also great at math and science, and has thought about studying engineering in college. The idea of being an engineer isn't very appealing to her, but she does value the potential economic stability that a job like that would provide. These are some of the things that she is thinking about as she approaches graduation. Question: Which of the following is correct based on the scenario above?

Both of these are correct.