Unit 1 Review

How would a move from point A to point B illustrate the concept of opportunity cost?

• The firm must use all available resources at the lowest cost per unit.

• The firm can only produce additional coal by producing less natural gas.

• The firm is producing less coal due to waste in the production process.

• The firm can make a move between these points only with new technology for producing natural gas.

The term that describes the country investing in resources to move production from point Y to point X.

• Scarcity

• Choice

• Opportunity Cost

The term that describes the country giving up the chance to produce some textbooks.

• Scarcity

• Choice

• Opportunity Cost

What is the term that describes the country lacking the necessary resources to produce at Point X?

• Scarcity

• Choice

• Opportunity

• Cost

The diagram shows how new technology increased the supply of bread. How does this development change the price and the quantity demanded of bread? Select TWO correct answers.

• The price increases.

• The price decreases.

• The price stays the same.

• The quantity demanded decreases.

• The quantity demanded increases.

Which resource would be considered the factor of production called land?

• Coal

• Factory

• Money

• Tractor

Based on the information in the graph and the table, what is the equilibrium price of pizza?

• $2.00

• $4.00

• $3.00

• $5.00

Scarcity is a basic economic problem because —

• A. resources are limited

• B. governments limit production

• C. opportunity costs limit demand

• D. people have trouble making choices

The basic idea of choice presents which of the problems in economics?

• A. People get to decide what they want.

• B. Businesses can sell what they want.

• C. Decisions produce costs.

• D. Choice is a way of life.

What is one way the U.S. economy can be adversely affected when interest rates are lowered?

• A. Prices may inflate

• B. Taxes rates may decrease

• C. Less capital may available

• D. Unemployment may increases