Economics Test 1

Girl shopping for shoes

Each of the following is a factor of production except

Resources

Factors of production are also known as

The person who makes the eye shadow

Monica likes to wear red lipstick, and she always wears blue eye shadow whenever she has red lips. A resource for the eye shadow is

I, II, and III

On the basis of the diagram below showing an economy's production possibilities curve for two good, which of the following statements must be true. I. The opportunity cost of moving from point P to point is 10 units of Y II. The opportunity cost of moving from point R to point P is 8 units units of X III. The opportunity cost of moving from point Q to point R is 0 units of Y

Is measured by how much of one good/service a person has to forgo in order to get some stated amount of another good/service

Opportunity cost

Shift inward

A decline in available natural resources will cause the PPF to

That choosing to produce one good requires sacrificing production of other goods that only one other good in an economy is affected by of another good

A point on the production possibility frontier(PPF) shows

Trade-offs; produces

A producation possibility frontier illustrates the ______________ facing n economy that ___________ only two goods.

Trade-offs; consumes

A production possibility frontier illustrates the __________ facing an economy that ________ only two goods

20 capital goods

According to the graph below, if a country is currently producing a point X, the opportunity cost of producing another consumer good is

Inefficient production points

All points inside the production possibility frontier represent

Non-feasible production points

All points outside the production possibility frontier represent

I, II, and III

An opportunity cost is entailed in which of the following decisions? I. A student decides to attend college full-time II. A family uses its $20. 000 savings to purchase an automobile III. A farmer decides to grow more wheat and less corn

I, II, and III

Changes in which of the following factors would affect the growth of an economy I. Quantity and quality of human and natural resources II. Amount of capital goods available III. Technology

I and II

For an economy with a straight-line production possibilities curve, which of the following must be true? I. The opportunity cost of producing another unit is constant II. Resources are completely adaptable to alternative uses. III. Resources are used efficiently

The amount people want exceeds the amount available at a zero price

Goods are scare if and only if

Markets and the goverment

In a mixed economy, what to produce and how much to produce are determined by

Good

Rita also likes to wear red lipstick and blue eye shadow. The red lipstick is a

One relent factor(independent variable) changes will all the others remind constant when studying an economic effect

The "other things equal" assumption means

Adam Smith

The 18th century Enlightenment philosopher who wrote The Wealth of Nations, which included the sea of the Invisible Hand, was

Increasing opportunity cost

The fact that a society's production possibility frontier is curves demonstrates the law of

real interest rate

The long-run growth rate of an economy will increase(The PPC will shift out) by an increase in all of the following except

How scarce resources are allocated, given unlimited wants

The study of economics is primarily concerned with which of the following

The dress

When Ina decides to buy a $200 pair of high heels instead of a $400 dress to wear to prom, her opportunity cost is

The added benefit of producing more dresses exceeds the additional cost of producing

Which of the following is a correct example of marginal analysis