Economics Test 1

Resources (factors of production) are

• scarce for households but plentiful for economies.

• plentiful for households but scarce for economies.

• scarce for households and scarce for economies.

• plentiful for households and plentiful for economies.

• owned by households and scarce for economies.

Any resources that are made by humans, such as machines, and used to create other goods and services are called

• services.

• production.

• capital.

• labor.

Economics may best be defined as a

• scientific study of supply and demand.

• study of choices that are made with respect to a limited description of economic activities.

• study of choices people make in light of their desire for unlimited wants but the reality of limited resources.

• branch of sociology that examines the choice-making process in light of supply and demand.

Approximately what percentage of the world's economies experience scarcity?

• 0%

• 25%

• 50%

• 75%

• 100%

The overriding reason as to why households and societies face many decisions is that

• resources are scarce.

• goods and services are not scarce.

• incomes fluctuate with business cycles.

• people, by nature, tend to disagree.

• wants are scarce.

Which of the following is the best definition of a need?

• The paradox of value

• A synonym for a want

• The tradeoff construed when measuring opportunity cost

• A fundamental necessity for life

Jobs that produce services refer to the production of non-tangible economic products such as

• a. a manufacturing company that produces watches.

• b. the manufacturing of tangible goods.

• c. the private ownership of the factors of production.

• d. employment in an area that performs duties or work for other people (doctor, teacher, barber, etc.)

Which of the following would NOT be considered a factor of production?

• a. trees used for making paper

• b. Puff Daddy (or P-Diddy, Diddy, Sean Combs, or whatever he calls himself these days)

• c. a worker at Wal-Mart

• d. an iPhone used for text messaging between you and your friend

A computer, smartphone, and projector are all goods used for a business. In economics, these are known as

• a. human capital

• b. financial capital

• c. physical capital

• d. consumer goods

Trade-offs are best defined as

• alternative choices made by consumers, when they essentially give up one thing in order to obtain another

• the cost of the next best alternative use of time, money, or resources

• intrinsic value that people receive when they choose one option over another

• the value of the next best alternative use of time, money, or resources