Econ Chapter 1 Review

What term describes the limited nature of society's resources compared to their unlimited wants?

• Benefits

• Scarcity

• Incentive

• Costs

Which of these terms refers to the wise allocation and use of resources in our economy?

• Economic Freedom

• Economic Stability

• Economic Efficiency

• Economic Power

If I spend the money I have on a pair of new shoes, what is the opportunity cost?

• the pair of shoes I bought

• money I need to borrow for other things

• whatever else I could have bought with the money I spent on shoes

• the time I will need to work to earn more money

Which factor of production involves the risk-taking and innovation to bring the other factors together?

• Labor

• Capital

• Land

• Entrepreneurship

Tools that economists use to visualize data is

• charts and graphs

• behavioral models

• the scientific method

• labr, labor, and capital

What is the difference between capital goods and consumer goods?

• capital goods are used to produce consumer goods

• capital goods cost more than consumer goods

• consumer goods can't be used as capital goods

• consumer goods are cheaper than capital goods

What is something that motivates a person to take a particular course of action?

• Resource

• Incentive

• Market

• Utility

Which principle states that every choice involves a cost?

• No free lunch principle

• Law of diminishing marginal utility

• Future consequences count principle

• Rational behavior model

What term refers to all of the possible resources involved in making a product or decision?

• Benefits

• Capital

• Inputs

• Outputs

What term refers to the gains received from a decision or action?

• Costs

• Benefits

• Tradeoff

• Scarcity