unit 1 multiple choice questions
Provide an example of thinking at the margin
john has six shirts and is trying to decide whether to buy a seventh
List the factors of production
land, labor and capital
Provide an example for the law of diminishing marginal utility
a new toy is less exciting to a child with many toys then to one with few
Example of specialization
an assistance in tailoring shop only replaces zippers
What is a market?
an online auction site
What is the law of unintended consequences?
actions often have unforeseen effects
What is an opportunity cost?
biggest loss in a gain
What type of economic system is most common today?
mixed economy
Why are economies most efficient when they have full employment?
no productive resources are going unused
Explain the cost vs. benefits principle
people choose something when its expected costs are less than its anticipated benefits
Why do we have scarcity?
peoples wants are unlimited while resources are limited
Describe how government best fulfills its role in model free enterprise economy
protect property rights and enforce contracts
Why are tradeoffs necessary?
resources are limited
What term is most closely related to tradeoffs?
scaricty
Using the circular flow model, provide an example of a factor payment
the hourly wage a store pays to a clerk
What are the THREE fundamental economic questions?
what, how and whom
