REVIEW #1: Fundamentals of Economics

Front

Aria quoted the Joker: "If you're good at something, never do it for ___________."

Back

free

Answer explanation

The correct answer is 'free' because the full quote from the Joker emphasizes that if you excel at something, you should not offer it without charge. This aligns with the idea of valuing one's skills.

Front

Economic concept illustrated by trading coconuts for pineapples on a magical island with Abigail, Arjun, and Maya.

Back

Opportunity cost

Answer explanation

This scenario illustrates opportunity cost, as trading coconuts for pineapples involves giving up the value of coconuts to obtain pineapples. The production possibilities frontier shows the trade-offs between these two goods.

Front

Daniel, Anika, and Aria on a deserted island: Daniel fishes, Anika gathers fruits, Aria builds shelters. This division of labor is known as:

Back

Comparative advantage.

Answer explanation

The concept of comparative advantage suggests that individuals should specialize in tasks where they have a relative efficiency. Here, Daniel, Anika, and Aria each focus on their strengths, maximizing their survival efforts.

Front

Key concept for resource allocation in economics:

Back

Opportunity cost

Answer explanation

The key concept is opportunity cost, which refers to the value of the next best alternative foregone when allocating resources. Understanding this helps economists like Henry, Zoe, and Kai make informed decisions about production and resource use.

Front

Course that differs from the rest:

Back

Economics

Answer explanation

Economics is broader and focuses on the study of production, distribution, and consumption of goods and services, while the other courses are more specific to personal and business finance.

Front

Basic assumption of economics: wants are unlimited.

Back

A) wants are unlimited.

Answer explanation

A basic assumption of economics is that wants are unlimited, meaning people have endless desires for goods and services. This drives the need for choices and resource allocation, making option A the correct answer.

Front

Adam Smith's "invisible hand" concept suggests that economies benefit when individuals pursue their self-interests.

Back

C) Entire economies will benefit if individuals pursue their self-interests.

Answer explanation

Adam Smith's "invisible hand" concept suggests that when individuals pursue their self-interests, it can lead to positive outcomes for the entire economy, making option C the correct choice.

Front

Scarcity arises from limited resources to meet unlimited needs and wants.

Back

Correct Answer: Limited resources to satisfy unlimited needs and wants.

Answer explanation

Scarcity arises from having limited resources to meet unlimited needs and wants. This fundamental economic principle explains why we must prioritize and make choices in resource allocation.

Front

A nation with a comparative advantage in aircraft engines should:

Back

Specialize in aircraft engine production and trade for other goods.

Answer explanation

A nation with a comparative advantage in aircraft engines should specialize in their production. This allows it to trade for other goods/services, maximizing efficiency and overall economic benefit.

Front

Concept explaining reduced satisfaction with increased consumption, like enjoying the first slices of pizza but dreading leftovers.

Back

Marginal utility

Answer explanation

The concept of marginal utility explains that as we consume more of a good, the additional satisfaction (utility) we gain from each extra unit decreases. This is why the first slices of pizza are enjoyable, but later ones feel less satisfying.