Unit 1 Test: Thinking Like an Economist

Which of the following descriptions best explains the meaning of opportunity cost?

• the initial cost of starting a new business

• the cost of business failure

• the cost of choosing one alternative over another

• the risk associated with producing a new item

Consumers waiting in long lines for a new product is an example of:

• scarcity

• consumerism

• consumer rights

• consumer responsibilities

Which of these countries has an economy most similar to that of the former Soviet Union?

• North Korea

• South Korea

• Norway

• Sweden

The economic system of the United States is considered a ____.

• free market capitalist economy

• command economy

• traditional economy

• socialist economy

What have some states done to protect workers from adverse economic events such as layoffs and illnesses?

• They set up support groups.

• They set up unemployment compensation programs.

• They provided every worker with insurance.

• They gave workers more time off.

____ protect consumers against harm from products on the market.

• Private property rights

• Profit motives

• Government regulations

• Franchises

The most comprehensive measure of a nation's wealth is provided by its:

• A) production possibilities curve

• B) gross domestic product

• C) TINSTAAFL rating

• D) capital goods.

Given the Production Possibilities Curve table below, which of the following points represents efficient production?

• A) 50, 50

• B) 50, 150

• C) 100, 150

• D) 50, 100

Given the Production Possibilities Curve table below, what is the opportunity cost of producing 200 units of Black Tea?

• 100 units Green Tea

• 200 units Black Tea

• 200 units Green Tea

• 0 units Black Tea

Given the Production Possibilities Curve table below, what is the opportunity cost of producing 50 units of Green Tea?

• 150 units Black Tea

• 25 units Green Tea

• 50 units Green Tea

• 50 units Black Tea