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Fundamentals of Economics
Fundamentals of Economics
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This is a Quiz to test our knowledge of the foundational ideas of #economics.
Flashcards
28 cards
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Questions
28
Answers
1
Human capital is defined as:
the knowledge and skills that a labor resource possesses
hiring new people
the number of people in the workforce
how much money someone earns
2
What does Point H represent?
The maximum amount we can produce right now.
Our long-term hopes and dreams.
Nothing
An impossible level of production.
3
Consumer sovereignty
is defined as ...
producers create demand for products
consumers determine how resources are allocated
producers advertise goods and services
consumers choose which products will be produced
4
The study of economics is concerned with:
efficiently allocating society's products
customs and traditions
making choices to use scarce resources efficiently
making sure businesses succeed
5
Profit motive is defined as:
an incentive to make money
a business's desire to spend money
how a business creates income
the desire to work
6
In a command economy, the key driver of the economy is...
businesses
the government
entrepreneurs
consumers
7
Which is the best definition of scarcity?
the allocation of goods and services
unlimited wants outpace limited resources
a shortage of goods
not having enough money to buy stuff
8
Which economic system has a very low unemployment rate?
market
planned
mixed
command
9
The outwardly bowed shape of the production possibilities curve tells us:
that production is inefficient
that marginal costs are expensive
that growth is unsustainable
how opportunity costs increase
10
Mr. Goodwrench, an auto mechanic, requires capital resources. These are:
money, a garage and employees
a garage, lenders and customers
a garage, tools and a telephone
customers, tools and land
11
The fundamental economic problem faced by all societies is ...
scarcity
poverty
unemployment
inequality
12
An economic system formed around habits, customs and religion is ...
primitive system
natural system
archaic system
traditional system
13
Why would the richest person in the world experience scarcity?
Because workers wages keep going up.
Because prices are too high.
Rich people do not experience scarcity.
Because productive resources are limited.
14
Which choice from factors of production is an example of LABOR?
sweat produced when working
learning new skills
goods and services that are produced
mental activity when producing
15
For a factor of production to be scarce, it must be...
limited and desirable
unevenly allocated
rare and expensive
unlimited and cheap
16
When one decision is made, the next-best alternative is:
comparative advantage
opportunity cost
additive resource
comparative disadvantage
17
An efficient economy is one in that ...
Gets more work done in less time.
Has low levels of unemployment.
Makes a high profits for each product.
Uses its resources with very little waste.
18
The resources used to make all goods and services are called the...
the production frontier
production tradeoffs
natural resources
factors of production
19
Of the three fundamental questions of economics, which is one of these options?
how to produce goods and services
how much goods and services will cost
how goods are allocated
who will receive goods and services
20
How do we define
opportunity cost
?
marginal cost for non-fraudulent exchanges
the value of the next best alternative that is given up
all other alternatives you give up to do what you want
spending money on what you want
21
What is the
opportunity cost
if we move from Point C to Point B?
both pizzas and robots
7,000 robots
300,000 pizzas
100,000 pizzas
22
What does the Production Possibilities Frontier tell us?
It maps trade between two nations.
It tells us when we are in recession.
It shows the possible outcomes when two goods are produced.
It predicts when unemployment is rising.
23
In a market economy ...
governments intervene
governments plan production
prices reflect scarcity and wants
governments interfere
24
The term "land" in factors of production means ...
unfinished goods
natural resources
real estate
dirt
25
Which choice is the correct example of opportunity cost?
You make a toy from leftover popsicle sticks.
You buy a new jacket with birthday money.
Mr. King decides to buy a mule instead of new clothes.
Teachers take on the extra duty of driving buses.
26
Two ways of allocating scarce resources are:
supply and demand, and contest
authority and consensus
command and control
supply and demand, and leverage
27
Which choice is a
capital
factor of production?
a computer
air conditioning
Ms. Payne
steel
28
What is the best characteristic of a
mixed
economy?
All factories produce for the government's needs.
Farmers engage in a barter economy.
Scarcity is experienced by all.
Government sets a minimum wage for private business.
