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Unit 1 Basics of Economics
What is the basic economic problem?
What is the purpose of a PPC?
Unit 1 Basics of Economics
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Unit 1: Basics of Economics
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Answers
1
What is the purpose of a PPC?
Show trade-offs
Show value
Show scarcity
Show real cost
2
What is the basic economic problem?
too many natural resources to use
finding someone willing to risk starting a new business
making difficult choices
unlimited wants but limited resources
3
what factor of production is you working at Subway?
land
labor
management
capital
4
what factor of production is a road or factory built on top of?
capital
land
labor
management
5
The way a society uses its resources to satisfy people's wants is called:
economic system
service economy
customs and traditions
incentive system
6
something offered to get people to act in a certain way is called:
opportunity cost
utility
real cost
incentive
7
The benefit or satisfaction one receives from the use of a good is called:
Marginal
Utility
Cost
Value
8
Which of the following is NOT one of the 6 principles of economics?
People gain from voluntary trade
Free goods have a cost to the government
Everything has a cost
Incentives influence people's choices
9
If a really good song is played too often, what happens?
economizing
diminishing marginal utility
incentive
utility
10
You will continue using a good as long as:
Benefit is at least equal to the cost
Utility is less than the benefit
Utility is greater than utility of another good
Cost is greater than the marginal utility
11
Large scale factors like GDP and inflation would be studied by:
macroeconomics
microeconomics
normative economics
positive economics
12
Which of the following would be an example of a service?
getting a hair cut
a cell phone
a coffee mug
a camera
13
Which factor of production would a car be?
land
capital
management
labor
14
The value of the next best option in a decision is called:
income tax
opportunity cost
sour cream and onion
real cost
15
What determines the value of a good?
government
people
president
economy
16
What is economics the study of?
money
use of scarce resources
supply and demand
taxes and stock market
17
If you start your own business, what factor of production is that?
labor
land
management
capital
18
A trade where both sides anticipate gains is called:
Unfair trade
Exchange
Fair trade
Intrinsic value
19
If i trade a Mtn Dew for a bag of Doritos, what best explains this?
People choose for good reasons
People gain from voluntary trade
Incentives influence people's choices
Everything has a cost
20
The study of the economy the way things are is called:
Microeconomics
Normative Economics
Macroeconomics
Positive Economics
21
How do individuals make choices?
Economizing
If utility is less than the cost
using a PPC
diminishing marginal utility
22
What is the opportunity cost of going from 0 to 6 Wheat?
9 Guns
6 Guns
3 Guns
3 Wheat
23
What is the opportunity cost of you getting out of bed this morning?
being late for school
not getting your homework done
sleeping
doing your makeup
24
Which of the following is NOT an assumption of a PPC?
all resources are being used
resources are fixed
production of several items
technology is fixed
25
what factor of production is a road or factory building?
labor
capital
land
management
26
I think College expenses should be paid by the government
normative economics
real cost
positive economics
opportunity cost
27
What is the economic definition of scarcity?
lack of enough resources to satisfy our wants
situation in which something is rare
situation in which items are expensive
situation in which something is hard to find
