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Fundamentals Test Review
Fundamentals Test Review
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Answers
1
A PPC shows what economic concept.
Opportunity Cost
Trade-Off
Profit
Scarcity
2
Which term describes the problem of limited economic resources combined with unlimited wants.
Factors of Production
Economics
Trade-Off
Scarcity
3
Who owns the factors of production in a command economy?
Businesses
The Producers
The consumers
Government
4
What would have to happen to reach point X?
More Natural Resources
New and better physical capital
All of Above
Increase in labor production
5
Leah works at Ford on the assembly line installing breaks. This is an example of
Opportunity cost
Factors of Production
Specialization
Trade-Offs
6
Which point on the Production Possibilties curve is showing the firm is most efficient?
A
C
B, D, E
X
7
At which point on the PPC is unattainable?
E
D
A
X
8
In order to determineif an item is scarce,the item would have to be:
limited and desirable
Unlimited and popular
Popular by the majority
Limited and unpopular
9
When the private market is unable to produce a in a way that increases the marginal benefit to society, it's a:
Market cost
Private Good
Market Failure
Market Power
10
Pollution from the new factory in town has caused local residents to get sick. This is a representation of a
Time to move
Negative externality
Stay and deal with it
Positive externality
11
Margret ran a red light and was given a speeding ticket that will cost her $300. This situation was a result of a
Opportunity cost
Positive Incentive
Negative incentive
A woman driver
12
What distinguishes land from capital and labor?
Capital is a natural resource
Land is unlimited
Land is not needed for production
Land is a natural resource
13
Which of the following is not one of the three basic economic questions?
Where to Produce
What to Produce
To Whom to Produce for
How to Produce
14
The government decides to pay $50 million on cars instead of buying a zoo. What is the opportunity cost
Having a new zoo
The $500 million
Owning a car
Being in debt
15
Which of the following is a key motivation for entrepreneurs?
All of the Above
Profit
Innovation
To Create Jobs
16
The distribution of resources to satisfy the greatest number of needs
Innovation
Trade-Off
Allocation
Specialization
17
What is the main problem in economics?
Competition
Regulations
Freedom
Scarcity
18
Running one more mile after running the previous two miles would burn more calories. This concept explains
Trade-Off
Mariginal Cost
So you can eat more
Marginal Benefit
19
Which of the following is not one of the three basic economic questions?
What to produce
Where to produce
Who to produce for
How to produce
20
What economic concept means that producers should only produce what consumers are willing to buy?
Government regulation
Mixed economy
Consumer Sovereignty
Profit
21
When one is making a decision you would want the __________ to outweigh the ____________.
Cost, benefit
Cost to be the same as benefit
Benefit, cost
Opportunity Cost
22
When factors of production are allocated to their most productive use, this is called economic
Growth
Equity
Efficiency
Freedom
23
When factors of production are allocated to their mostproductive use, this is called:
Equity
Efficiency
Growth
Freedom
24
Car companies can sell cars in the United States that meet certain government safety requirements. This is called:
Taxiation
Consumption
Regulation
Production
25
The value of one’s next best alternative given up when a choice is made is called
Trade-Off
Allocation
Scarcity
Opportunity Cost
26
In which economic system are private property rights highly valued?
Traditional
Socialist
Market
Command
27
Which one of the four types of economic systems would best describe the American economy?
Market
Mixed
Traditional
Command
28
Which allocation strategy is exemplified by waiting in line for a discounted item on Black Friday?
First Come, First Serve
Authority
Price
Lottery
29
Making pottery and then starting your own business, where you sell it online, is an example of
Physical Capital
Land
Labor
Entrepreneurship
30
What is a profit?
Cost of Production
What the governemnt gets
The money left after all costs of production are paid
Money made by the CEO
31
The following items would be consider a public good or service, except:
Fire and Rescue
National Park
Target
Police
32
A farmer hires twenty extra workers to harvest an apple crop. Which factorof production is the farmer investing?
Labor
Scarcity
Physical Capital
Land
33
In which type of economic system would the producers, consumers and individuals answer the 3 basic economic questions?
Market
Traditional
Socialism
Command
34
Which of the four factors of production would a tractor,used to plow fields, represent?
Land
Physical Capital
Labor
Scarcity
35
In the study of economics:
People respond to positive and negative incentives in predictable ways.
The government provides jobs to all citizens of the United States.
People make rational decisions
The government only responds to negative incentives.
36
Which is the most likely effect of the Interstate Commerce Act on small farmers?
It required them to pay more fees.
It helped them be more profitable.
It caused them to use different carriers.
It made them ship longer distances.
37
Productivity can bestbe defined as
Maximum output
Where to produce
Relationship of inputs to outputs
What to produce
38
Sally is training to become a nurse, this is an example of improving ones
Scarcity
Physical Capital
Human capital
Opportunity cost
39
Specialization and trade usually lead to
Low economic growth
The exchange of goods and services at at greater level
No economic cost
Higher Prices
40
Economics is the study of how one uses limited resources to satisfy
Limited needs
Opportunity Cost
Unlimited wants and needs
Limited wants
