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1.1: Basics of Economics Flashcards | StudBud
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1.1: Basics of Economics
1.1: Basics of Economics
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1
What are the 3 economic questions every society must answer?
How much should be produced?
Who gets what is produced?
What should be produced?
How should it be produced?
2
In which type of economy do private households and firms answer the 3 economic questions?
Capitalist Economy
Market Economy
Command Economy
Communist Economy
3
What is a capital good?
A form of money
A good made in the capital of a state
A good for consumers
Goods that are used to produce other goods
4
Which of the following is the most fundamental issue that economics addresses?
Reducing the national debt.
Choice of appropriate technology.
Reducing unemployment.
Use of scarce resources.
5
Which of the following best defines a trade-off?
Producing more of one good or service means producing more of another.
The act of giving up one thing to gain another.
The financial cost of producing a good or service.
The additional benefit gained from consuming one more unit of a good.
6
What are the four factors of production?
Land, Labor, capital, Entrepreneurship
Land, Labor, Capital, Entertainment
Water, Air, Earth, Fire
Land, Liberty, Capital Entertainment
7
Human capital is
The skills, knowledge and money possessed by an individual
The skills, knowledge, and experience possessed by and individual
The demand, knowledge, and skills possessed by an individual
The knowledge, skills, and land possessed by an individual
8
Macroeconomics is the study of how _____ deal with scarcity.
Individual consumers
Households
governments
large corporations
9
What is an opportunity cost?
The money spent on a purchase.
The value of the next best alternative given up.
The difference between the highest and lowest value choices.
The benefit that is gained from choosing a particular alternative.
10
If you study instead of going to a concert, what is the opportunity cost?
Fun at the concert
Better grade in economics
Money spent on tickets
Time spent studying
11
A factory chooses to make 100 units of Product A instead of 150 units of Product B. What's the opportunity cost?
The 150 units of Product B
Resources used for Product A
Financial cost of producing Product A
The 100 units of Product A
12
A country can make 10 tons of rice or 15 tons of corn. What's the opportunity cost of 15 tons of corn?
Resources used for corn
The 10 tons of rice
Extra tons of corn
The 15 tons of corn
13
Define Scarcity
A limited amount of resources compared to prices.
A fundamental problem in society.
A social science dealing with people's needs and wants.
Needs and wants outweigh the amount of resources available.
14
A country’s infrastructure is its...
private financial institutions
natural resources
public capital goods such as highways
internal, as opposed to external, debt
