Economics: Fundamentals

Question 1

Shifting production from 10 lbs of cheese to 20 lbs of cheese means an opportunity cost of

Accepted Answer

1 gallon of milk

Question 2

Which of the following describes an economic system with no government involvement?

Accepted Answer

(free) market

Question 3

The best description of the US economy is

Accepted Answer

mixed, mostly market

Question 4

In economics, rational decisions occur when

Accepted Answer

marginal benefit is equal to or exceeds the marginal cost

Question 5

Which of the following motivates entrepreneurs to take risks and start new businesses?

Accepted Answer

profit

Question 6

Natural resources such as wheat, water, and iron ore would be considered which resource?

Accepted Answer

land

Question 7

In a cookie shop, which represents the factor of land?

Accepted Answer

the sugar used to bake the cookies

Question 8

Unlimited needs and desires meeting limited resources is the definition of. . .

Accepted Answer

scarcity

Question 9

In which type of economy do communities generally have the lowest standard of living?

Accepted Answer

traditional

Question 10

What is a human resource you could use in an art gallery?

Accepted Answer

knowledge of trends in modern art

Question 11

Which of the following is an economic safety net provided by a mixed market economy?

Accepted Answer

unemployment benefits

Question 12

Why is specialization important?

Accepted Answer

It leads to higher efficiency.

Question 13

The best description for nearly all economies in the modern world is

Accepted Answer

mixed

Question 14

Which of the following describes a traditional economy?

Accepted Answer

Based on customs passed down from previous generations

Question 15

A movement from curve 1 to curve 2 shows a/an__________ on this production possibilities curve

Accepted Answer

increase

Question 16

When the marginal benefits of a decision equal or exceed the marginal costs, it is called. . .

Accepted Answer

a rational decision

Question 17

The three fundamental questions of economic production are

Accepted Answer

What, How for Whom

Question 18

Competition and free enterprise are most common in which type of economic system?

Accepted Answer

market

Question 19

Which of the following describes a command economy?

Accepted Answer

the government makes all economic decisions

Question 20

Point B on the following production possibilities graph is considered...

Accepted Answer

maximum efficiency with given resources

Question 21

A factory's warehouse would be considered which of the following productive resources?

Accepted Answer

capital

Question 22

The next best alternative given up when you make a decision is called. . .

Accepted Answer

opportunity cost

Question 23

Attending school or a training program helps people invest in which of the following?

Accepted Answer

human capital

Question 24

Specialization increases productivity because

Accepted Answer

workers gain expertise in their assigned tasks

Question 25

What does the word allocate mean?

Accepted Answer

to distribute

Question 26

A free market economy is

Accepted Answer

has no government involvement

Question 27

The study of how individuals, firms, and nations can best allocate their resources is called

Accepted Answer

economics

Question 28

If I trade my old iPhone for your Ipod and we agree, we can agree that

Accepted Answer

we both gained because it was voluntary and not fraudulent

Question 29

Which of the following is an example of a public good or service?

Accepted Answer

a national highway

Question 30

In a centrally planned economy, the 3 economic questions are answered by the

Accepted Answer

Central government alone

Question 31

Government agencies inspect restaurants. What economic effect does this have?

Accepted Answer

they charge more to cover resources used to meet regulations

Question 32

Lack of econ security, unequal distribution of G & S, and uneven wealth are in a __ economy.

Accepted Answer

market

Question 33

What would cause the PPF to shift outwards (right)?

Accepted Answer

all of the above

Question 34

If the dot on the PPF is on the curve, what can we assume?

Accepted Answer

efficient

Question 35

If a factory owner uses some of her profits to purchase new machinery she is investing in

Accepted Answer

capital goods

Economics: Fundamentals

Questions 35

Economics: Fundamentals

Questions 35