Fundamentals Exam - Make-up/Retake

Which BEST describes scarcity?

• Only a few resources exist.

• Unlimited wants exceed limited resources.

• There is not enough demand to use all the available products.

• For a short period of time, there are not enough goods to meet the demand.

Which statement is true concerning the relationship between scarcity and the factors of production?

• Land is not scarce because it is a natural resource that can be recreated.

• Entrepreneurship is not scarce because it is not limited, anyone can be an entrepreneur.

• Each of the factors of production is scarce to some degree causing companies to make choices.

• Labor is the only truly scarce resource because there are a limited number of desirable employees for any job.

Read the scenario and answer the following question:

In the manufacture and sale of the apple juice, what factor of production does Mary represent?

• Land

• Labor

• Capital

• Entrepreneurship

Which answers BEST describe an entrepreneur?

• the physical and mental talents of workers

• the ability of a person to work more efficiently than another person

• a person willing to take a financial risk by combining resources to produce a good or service

• a person who uses land, labor, and capital in their job

Opportunity cost means individuals

• pay sales taxes to make a purchase.

• replace land and labor with capital resources.

• consider the environmental impact of purchases.

• make decisions that require them to give up the next best alternative.

Sarah is a welder on an automobile assembly line. Sarah’s job illustrates a production process that relies on:

• autonomous work groups

• team decision making

• quality circles

• division of labor

Voluntary exchange and profit motive are key characteristics of which economic system?

• Traditional

• Market

• Command

• Coach Searcy’s Dictatorship

The idea that producers make goods that consumers like and are willing to pay for is a principle of which of the following economic system?

• Market

• Command

• Traditional

• Socialism

Which could be considered a weakness of a market economy?

• government makes all decisions

• the same products get made year after year

• retirees could get left behind if they have not planned for their own future

• everyone makes the same amount of money regardless of how hard they work.

Using the picture as a guide, choose the following statement that is TRUE.

• Casinos are a public good

• A positive externality would be entrepreneurs making money off of hotels

• A negative externality could be the possible destruction of the beach’s ecosystem that existed prior to the construction

• This is an example of the government controlling the means of production