Economics: Fundamentals

Question 1

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

Accepted Answer

capital goods

Question 2

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

Accepted Answer

scarcity

Question 3

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

Accepted Answer

economics

Question 4

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

Accepted Answer

land

Question 5

What does the word allocate mean?

Accepted Answer

to distribute

Question 6

Why is specialization important?

Accepted Answer

It leads to higher efficiency.

Question 7

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

Accepted Answer

a rational decision

Question 8

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

Accepted Answer

increase

Question 9

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

Accepted Answer

maximum efficiency with given resources

Question 10

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

Accepted Answer

human capital

Question 11

Which of the following describes a command economy?

Accepted Answer

the government makes all economic decisions

Question 12

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

Accepted Answer

(free) market

Question 13

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

Accepted Answer

unemployment benefits

Question 14

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

Accepted Answer

profit

Question 15

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

Accepted Answer

opportunity cost

Question 16

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

Accepted Answer

a national highway

Question 17

Consumer sovereignty is illustrated by which of the following?

Accepted Answer

Apple creating more iPhones due to consumer demand.

Question 18

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

Accepted Answer

capital

Questions 18