Economics Chapter 1

Which of the following is a service?

• a restaurant meal
• a guitar lesson
• dry-cleaning fluid
• a concert t-shirt

An individual who tries to earn a profit by developing a new product or finding a better way to produce an existing one is a(n)

• employee
• manager
• entrepreneur
• executive

Economics is the study of how

• gov't allocates scare resources to satisfy people's unlimited wants.
• gov't supplies money to businesses to produce goods & services.
• people use their scarce resources to satisfy their unlimited wants.
• businesses supply unlimited goods & services with limited resources.

An example of a renewable resource is

• oil
• coal
• copper
• timber

An example of an non-renewable resource is

• timber

• corn

• oil

• cotton

The opportunity cost of a chosen item or activity is

• the money you must give up to buy it
• the value of all alternatives you must pass up
• The value of the best alternative you must pass up.
• the money you lost by not choosing the least expensive option.

A study of total consumption in the entire U.S. economy would involve

• normative economics
• microeconomics
• consumer economics
• macroeconomics

A study that examines how price and output are determined in the market for breakfast cereal would involve

• socioeconomics
• microeconomics
• marginal economics
• macroeconomics

___ is the physical & mental effort used to produce goods & services.

• Labor
• Revenue
• Behavior
• Marginal

A building, structure, machine or tool that is used to produce goods or services.

• Capital Good

• Capital Resource

• Land

• Macroeconomics