Chapter 1 Review

Rationing exists because of...

• a surplus of products

• price

• scarcity

• incentives

The opportunity cost of something is...

• the dollar value of the item

• less than the dollar value of the item

• more costly to the poor

• what you give up to get an item

The marginal cost of something is...

• never greater than the marginal benefit

• the opportunity cost minus the actual cost

• the cost to produce one additional unit

• an intangible resource

As the opportunity cost of college increases compared to the benefits, a person is...

• more likely to attend college

• less likely to attend college

• unaffected by the change

• can not predict

A production possibilities frontier shows...

• all possible combinations of 2 goods that can be produced

• all the possible production of 1 particular good

• all possible combinations of all the goods and economy can produce

• all the possible combinations of 4 goods that can be produced

If you are making decisions at the margin, you are...

• selecting either all or nothing at all

• confused about what to do

• comparing the extra benefit to the extra cost

• all of the above

Labor refers to...

• physical talents

• physical and mental talents

• goods that can be used as resources for production

• foreign workers

If your parents offer you cash for every A on your report card, that is an example of...

• an incentive

• a bribe

• marginal cost

• opportunity cost

Animals are classified as which of the following factors of production?

• land

• labor

• capital

• entrepreneurship

Things that can be felt or touched are...

• real

• tangible

• intangible

• renewable