Economics Unit 1 Quiz

The study of economics is primarily concerned with 

• determining the most equitable distribution of society's output

• choices which are made in seeking to use scarce resources efficiently

• demonstrating that capitalistic economies are superior to socialistic economies.

• keeping private businesses from losing money.

The opportunity cost of an action:

• is the average amount of unhappiness experienced by everyone involved.

• measures the benefit of your action

• is the value of the next best alternative, the lost opportunity

• will be the same for everyone.

Which best explains the concept of scarcity?

• Limited wants, unlimited resources

  
  

• Unlimited wants, limited resources

  
  

• Unlimited wants, unlimited resources

  
  

• Limited wants, limited resources

  
  

The sharp decline in the price of the Model T can be attributed to which of the following? 

• appreciation

• the assembly line

• a rise in demand

• the decrease of outputs

The Soda and Soup industry represent which market structure?

• perfect competition

  
  

• monopolistic competition

  
  

• oligopoly

  
  

• monopoly

  
  

Duke Energy and Greensboro water services and other natural monopolies are allowed to exist because…

• they are non-profit organizations and they don't have to pay taxes

  
  

• it benefits the US and other foreign governments for them to exist so the government isn't forced to provide the services.

  
  

• it actually benefits the customer for them to not have competition

  
  

• they actually shouldn't be allowed to exist since they aren't renewable energy sources

  
  

In this market structure there are complete barriers to entry. The producer also has complete control over price.

• Perfect Competition
• Monopolistic Competition
• Oligopoly
• Monopoly

In a car manufacturing facility, a tire would be which type of good?

• Consumer good
• Capital good
• That good good

• Durable good

When different businesses or countries perform different jobs and provide different services this allows them to become more efficient. This explains:

• Globalization
• Specialization
• Diversification
• Monopolization

Over time, the addition of one extra employee will eventually decrease the total output- this explains:

• Law of Diminishing Marginal Returns

• Law of Increasing Returns

• Law of Constant Returns
• Law of Variable Proportions