Fundamentals Practice Test

Which of the following is counted as physical capital?

• Land

• worker

• Hammer

• water

Because resources have many uses...

• The government must plan how resources are used.

• Resources must be allocated.

• Unemployment is impossible.

• Consumers cannot decide what to do.

The two characteristics of a scarce good are...

Which of the following is a part of microeconomics?

• explaining why the price of rice has fallen

• explaining why people are unemployed

• measuring price growth in the economy

• measuring the GDP of a nation

What are the 3 economics questions that all nations must answer?

Which of the following would be considered a natural resource?

• Fishing grounds in the South Pacific

• Animal reserves in Africa

• Petroleum in the Middle East

• All of the above

A market economy best solves the economic problem of scarcity by...

• having the government plan production and consumption

• allowing producers and consumers to use self-interest to determine the production and consumption of a society.

• having only consumers plan

• having only producers plan

Which of the following would cause a production possibilities curve to shift outward?

• More vacation time

• Less workers in the workforce

• An increase in immigration

• A decrease in the retirement age

Which point of the production possibility curve would be considered as unattainable with current resources?

• A

• X

• D

• B

Which of the following statements about the production possibilities curve is true?

• Point A is not attainable

• The relative position of points reflect production alternatives rather than relative prices

• Point X is inefficient

• None of the Above