The opportunity cost of something you decide to get is

the highest valued alternative you give up to get it.

Economics can be defined as the social science that explains the ________.

choices that we make as we cope with scarcity

the skill and knowledge of workers

The PPF can be used to illustrate all of the following EXCEPT

specialization and the division of labor

Which of the following is a microeconomic topic?

the reasons why Kathy buys less orange juice

Microeconomics is not concerned with:

the size of aggregate money flows in the economy.

Which of the following would not shift an economy's production possibility curve outwards?

when technology remains the same

Marginal cost is the cost

that arises from an increase in an activity.

Which of the following is a macroeconomic topic?

the reasons for the rise in average prices

Which of the following is NOT a factor of production?

a share of stock issued by a firm.

The ultimate cost of any choice is

the highest-valued alternative foregone

All of the following are examples of opportunity cost except:

all of the above are examples of opportunity costs.

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Ch.1 Fundamental Economic Concepts Test Review

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Practice test for Chapter 1 on Fundamental Economic Concepts

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Questions 36

Answers

1
A factor of production is
land
a service
cost
a need
2
"Ceteris paribus" means
other things being equal
what is
that which will be
what ought to be
3
The opportunity cost of something you decide to get is
the lowest valued alternative you give up to get it.
all possible alternatives that you give up to get it.
the highest valued alternative you give up to get it.
the amount of money you pay to get it.
4
When an economy produces more houses and fewer typewriters, it is answering the _____ question.
"what?"
"how?"
"where?"
"for whom?"
5
Economics can be defined as the social science that explains the ________.
choices we make when we trade in markets
choices made by households
choices made by politicians
choices that we make as we cope with scarcity
6
Human capital is
machinery that exceeds federal safety standards for humans
the skill and knowledge of workers
all capital owned by individuals, but not by corporations
all capital owned by individuals but not by governments
7
When China builds a dam using few machines and lots of labor, it is answering the ___ question.
"where?"
"how?"
"what?"
"for whom?"
8
The PPF can be used to illustrate all of the following EXCEPT
total output when all resources are fully employed
specialization and the division of labor
trade-offs
opportunity cost of unemployment
9
Which of the following is a microeconomic topic?
the reasons why Kathy buys less orange juice
the cause of why total employment may decrease
the effect of the government budget deficit on inflation
the reasons for a decline in average prices
10
Microeconomics is not concerned with:
the allocative function of changes in relative prices.
the quantities of each good produced.
the distribution of goods among households.
the size of aggregate money flows in the economy.
11
The most fundamental economic problem is
the trade deficit
scarcity
health
security
12
Economic models
are essentially different from those used in other sciences
simplify reality
include all relevant facts.
always use graphs.
13
The three basic economic questions are:
What? Where? And When?
What? How? And When?
What? How? And For Whom?
Why? What? And How?
14
As an economic concept, scarcity applies to
money but not time
neither money nor time
time but not money
both money and time
15
An autoworker is considered ________ and earns ________.
labor; rent
capital; rent
entrepreneurship; wages
labor; wages
16
The benefit that arises from an increase in an activity is called
opportunity cost
the marginal cost
an incentive
the marginal benefit
17
Which of the following would not shift an economy's production possibility curve outwards?
An increase in the resources available in the economy
Increases in the population
when technology remains the same
A technological advance
18
Marginal cost is the cost
that arises from the secondary effects of an activity.
that your activity imposes on someone else.
that arises from an increase in an activity.
of an activity that exceeds its benefit.
19
Which factor of production would a factory be?
entrepreneurship
labor
capital
land
20
Which of the following is a macroeconomic topic?
the reasons for the rise in average prices
the reasons for a rise in the price of orange juice
why plumbers earn more than janitors
whether the army should buy more tanks or more rockets
21
A basic requirement for survival is a
need
want
paradox of value
opportunity cost
22
Which factor of production would Facebook Founder and CEO Mark Zuckerberg be?
labor
land
entrepreneurship
capital
23
If it's impossible to make you better off without making others worse a current situation must:
cure the problem of scarcity.
be inequitable.
not be optimal.
be allocatively efficient.
24
Land, labor, capital and entrepreneurship are the
results of supply and demand
factors of production
basis of employment
result of production
25
Because we face scarcity, every choice involves
money
an opportunity cost
giving up something for nothing
the question "what."
26
The loss of the highest-valued alternative defines the concept of
scarcity.
entrepreneurship.
opportunity cost.
marginal benefit.
27
Which of the following is NOT a factor of production?
a tractor used by a wheat farmer.
the time worked by elementary school teachers
a share of stock issued by a firm.
a new computer used by a small business owner
28
Which factor of production would an assembly line worker be?
labor
capital
land
entrepreneurship
29
Actions in one part of the world that have an economic impact on what happens elsewhere shows
specialization
economic interdependence
opportunity costs
trade-offs
30
The ultimate cost of any choice is
the after-tax cost
what someone else would be willing to pay
the highest-valued alternative foregone
the dollars expended
31
The question, "Should Taco Bell produce more tacos or more burritos?" is an example of the
"how" question.
"for whom" question.
"what" question.
"where" question.
32
When a photographer decides to use a digital camera versus using film, she is facing the
microeconomic question.
"what" tradeoff.
"how" tradeoff.
"for whom" tradeoff.
33
The study of economics is important because it enables us to
predict future economic needs
become better shoppers
become better decision makers
memorize past events
34
All of the following are examples of opportunity cost except:
all of the above are examples of opportunity costs.
full-time earned income forgone to attend college
The building not built with materials used for new library.
the leisure time sacrificed to study for an exam.
35
Which of the following is NOT a factor of production?
the management skill of a small business owner.
the effort of farmers raising cattle.
the wages paid to workers.
the water used to cool a nuclear power plant.
36
The production possibilities curve for two goods is bowed outward because of:
Increasing opportunity costs
No opportunity costs
Opportunity costs that stay the same
Decreasing opportunity costs

Ch.1 Fundamental Economic Concepts Test Review Flashcards | StudBud