SSEF Unit 1 Review

Which of the following best describes scarcity?

• Having unlimited resources

• The basic economic problem of unlimited wants and limited resources

• Having enough resources to satisfy all wants

• Only applying to poor countries

What are the three basic economic questions?

• What to produce, how to produce, for whom to produce

• Who to hire, what to sell, how much to charge

• Where to locate, when to open, how to advertise

• What to buy, where to shop, how much to spend

What is opportunity cost?

• The monetary price of a good or service

• The next best alternative given up when making a choice

• The cost of producing a good or service

• The benefit received from consuming a good or service

Which of the following is an example of a capital resource?

• A factory worker

• Money in a bank account

• A delivery truck

• Crude oil

Which of the following is NOT a characteristic of rational decision making?

• Weighing costs and benefits

• Making choices based solely on emotion

• Considering alternatives

• Gathering relevant information

What is the law of increasing opportunity costs?

• As more of a good is produced, its price increases

• As more of a good is produced, the opportunity cost of producing additional units increases

• As more of a good is consumed, its utility decreases

• As more of a good is traded, its value increases

Which of the following is an example of a positive economic statement?

• The minimum wage should be increased

• Higher taxes are unfair

• The unemployment rate is 5%

• Government spending should be reduced

What does the concept of marginalism refer to in economics?

• The study of economic extremes

• Analysis of additional costs and benefits

• The process of setting profit margins

• Theories about market equilibrium

Which of the following is NOT a factor of production?

• Land

• Labor

• Capital

• Money

What is the primary function of entrepreneurs in a market economy?

• Enforcing government regulations

• Taking risks and innovating

• Providing labor for production

• Setting interest rates