Unit 1 Review

Economics is about making choices.

• True

• False

Online transactions are not considered a market because they do not occur in a physical place.

• True

• False

You should ignore sunk cost in making economic choices.

• True

• False

Capital resources are the physical and mental effort used to produce goods and services.

• True

• False

Corn is a good because it is tangible.

• True

• False

Which of the following is a service?

• a restaurant meal

• a guitar lesson

• dry-cleaning fluid

• a concert t-shirt

Scarcity arises because all societies have

• limited productive resources to satisfy unlimited wants.

• unlimited productive resources to satisfy limited wants.

• limited needs and unlimited wants.

• unlimited needs and limited wants.

Economics is the study of how

• government allocates scare resources to satisfy people’s unlimited wants.

• government supplies money to businesses to produce goods and services.

• people use their scarce resources to satisfy their unlimited wants.

• businesses supply unlimited goods and services with limited resources.

An example of a renewable resource is

• oil.

• coal.

• copper.

• timber.

An example of an exhaustible resource is

• timber.

• corn.

• oil.

• cotton.