What is Economics? Chapter 1

A model economists use to show the maximum combination of goods and services that can be produced from a fixed amount of resources in a given period of time is called

• an opportunity cost
• production possibilities curve
• hypothesis model
• microeconomics model
  microeconomics model

   Scarcity can best be defined as 

• A Shortage of a product
• Where demand is greater than supply
• Unlimited wants vs Limited resources 
• Limited wants vs unlimited resources 

(3) Which of the following is NOT a consumer good?

• a bulldozer at a construction site
• a Happy Meal at McDonalds
• a pack of Doritos in a vending machine
• a television set for sale at an appliance store

(2) Which of the following resources would economists classify as “capital”?    

• Raw Bauxite in a South African mine 
• A hammer used in framing a house 
• A worker hired to repair engines 
• Trees used to make paper 

The United States has decided to spend more money on military goods and less on education. The opportunity cost for spending more money on military goods would be which of the following?

• the satisfaction of destroying our enemies
• the money used to fund the military
•  money to spend on education
• better paid soldiers

________ is the most basic economic problem.

• Scarcity
• Labor
• Greed
• Capital

Opportunity Cost is best defined as

• The best rejected alternative you give up when making a decision 
• The price you pay to purchase something 
• The benefit you gain by making a decision 
• The amount of debt you take on by making a decision 

Which of the following statements is true: 

• An economist would consider something scarce only if it is limited (not anything else) 
• A trade off occurs when you give up something you want in order to get something else you want 
• The economic social goal, economic equity, means everyone gets the same amount of money 
• In a traditional economy, the government gets to decide the answers to the 3 basic economic questions

Which of the following is a need?

• clothes
• car
• job
• smart phone

The major types of resources used to make a product are called  

• natural resources
• factors of reduction
• factors of production
• capital resources