Unit 1 Fundamentals of Economics

Question 1

Which of the following describes a command economy?

Accepted Answer

the government makes all economic decisions

Question 2

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

Accepted Answer

capital

Question 3

What does the word allocate mean?

Accepted Answer

to distribute

Question 4

Consumer sovereignty is illustrated by which of the following?

Accepted Answer

Apple creating more iPhones due to consumer demand.

Question 5

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

Accepted Answer

unemployment benefits

Question 6

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

Accepted Answer

a national highway

Question 7

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

Accepted Answer

scarcity

Question 8

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

Accepted Answer

land

Question 9

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

Accepted Answer

profit

Question 10

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

Accepted Answer

economics

Question 11

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

Accepted Answer

a rational decision

Question 12

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

Accepted Answer

human capital

Question 13

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

Accepted Answer

opportunity cost

Question 14

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

Accepted Answer

(free) market

Question 15

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

Accepted Answer

capital goods

Questions 15