Unit 1 Intro to Economics Test

What is scarcity? 

• Giving something up to have something else
• Extra cost of production
• The condition that results form having unlimited wants with limited resources
• Rise in general level of prices and workers need more money

What is opportunity cost?

• The next best alternative

• The best option possible

• When something is very good

• When someone has no say in a matter

How are scarcity and trade-off related to each other?

• Trade-offs create the problem of scarcity

• They are not related

• Scarcity creates the need for trade-offs

• Too many resources creates involves both scarcity and trade-offs

Which of the following is NOT a natural resource?

• Oil
• Water
• Car
• Air

Which of the following IS physical capital resource?

• Wood

• Computer

• Labor

• Knowledge

My business makes tacos and maps. If I spend all my time making tacos, what is my opportunity cost? 

• Tacos
• Maps

On this PPC, which point is efficient? 

• A only

• C and D

• D Only

• A and B

On the PPC, which point is inefficient?

• A
• B
• C
• D

On the PPC, which point is unattainable?

• A

• B

• C

• D

What is the production possibilities curve?

• a graph that shows how much an economy can produce between 2 goods
• how much money something is
• the opportunity one has to give up in order to gain something else
• land, labor, capital, entrepreneurs