Econ Test 1

1.

1 point

To an economist, the word capital includes

the money used to invest in stocks, bonds, real estate, or businesses to produce future wealth

the natural resources used to produce goods and services

the tools, machines, and buildings used in the production of other goods and services

the time and effort people devote to producing goods and services

2.

1 point

The metaphor of the invisible hand explains how

government regulation and interference greatly benefits the economy.

a person's self-interested actions contribute to an unhealthy economy.

the economy runs efficiently with or without government interference.

an individual's pursuit for self-interest promotes society's well-being.

3.

1 point

Ocean waves can be used to generate energy. Ocean waves are considered which type of resource?

perpetual

capital

nonrenewable

renewable

4.

1 point

In the classic guns-versus-butter tradeoff, what happens when a society chooses to produce guns (military goods) instead of butter (civilian goods)?

The society maximizes its living standards, but reduces its security.

The society maximizes both its security and its standard of living.

The society maximizes its security, but lowers its standard of living.

The society reduces both its living standards and its security.

5.

1 point

A need includes

entertainment, education, and food.

food, clothing, and shelter.

music, shopping, and movies.

money, cars, and jewelry.

6.

1 point

Nicolae Ceausescu's ban on abortion

led to an increase in the standard of living in Romania.

led to a long and successful reign.

led to a decrease in the standard of living in Romania.

led to an increase in the labor force.

7.

1 point

A riddle or puzzle that can be explained through an economic analysis is called

a perfect competition.

an economic enigma.

a cost-benefit analysis.

a factor of production.

8.

1 point

The opportunity cost of a decision is

the value of the best thing you gave up to get what you want.

the loss of the chance to make that decision a different way.

the loss of all the other options you could have chosen.

the benefit you receive from making that decision.

9.

1 point

The Brady Act is

lifting the ban on assault riffles.

tighter gun control laws on concealed weapons.

signing Tom Brady to the Patriots.

requires a criminal check and a waiting period before a person can purchase a handgun.

10.

1 point

Why do economists say that scarcity is everywhere?

Everyone can get all the goods and services they need to meet their wants.

Most people never have enough resources to meet their basic daily needs.

The resources needed to produce goods and services are insufficient to meet the demand for them.

Our ability to satisfy our wants is unlimited.

11.

1 point

What is one way that a business can raise its productivity?

get more outputs from the same inputs

get the same output with the same inputs

get less output from the same inputs

get less output from more inputs

12.

1 point

The study of economics helps people understand how a _______________ makes the WHAT, HOW, FOR WHOM decision.

13.

1 point

Which scenario best illustrates the law of diminishing marginal utility?

A new toy is less exciting to a child with many toys than to a child with just a few.

A car breaks down more often as it gets older.

Using a single marshmallow to make s'mores by a campfire.

Someone who doesn't listen to music does not care about getting a new CD.

14.

1 point

Which statement about a country's human capital is true?

A country with high human capital is a wealthier nation.

The lower the level of human capital, the richer the nation will be.

There is no correlation between a country's human capital and its standard of living.

A nation's human capital is the least important form of capital in creating wealth and growth.

15.

1 point

What is the best title for the list below? • innovator • strategist • risk taker

Laborer

Capitalist

Investor

Entrepreneur

16.

1 point

Wealth does not include _____________, which are intangible.

17.

1 point

Which of the following is a major reason the standard of living in Japan is much higher than in Nigeria?

richer natural resources

greater human capital

more foreign residents

fewer temporary shortages

18.

1 point

It's Friday night and Ms. So has to decide what to do. She has the following options: talk to her dog, read a book, go to a restaurant by herself and pretend she's waiting for friends she doesn't have. These options are known as

trade-offs.

cost benefit analysis.

opportunity cost.

standard of living.

19.

1 point

The basic economic problem of _________ is due to the combination of people's seemingly unlimited wants and relatively scarce resources.

20.

1 point

An entrepreneur

works in the factory.

is an assistant to the CEO.

is a risk-taker who who does something new with existing resources.

invests money into companies.

21.

1 point

What causes a shortage?

an increase in the production of goods

the discovery of new sources of supplies for goods

a temporary increase in demand for a particular good or service

the permanent condition of having too few resources to satisfy all wants

22.

1 point

Standard of living

refers to the size of your house.

is the location of your home.

is the essential to determine the length of your lifespan.

is based on the possession of the necessities and luxuries that make life easier.

23.

1 point

What is the explanation for the crime drop according to Levitt and Dubner in Freakonomics?

Increase number of police

Tougher gun control laws

Roe v. Wade

Aging of the population

24.

1 point

Trade-offs are

alternative choices whenever they make an economic decision.

the process of bartering between two merchants.

the cost of the next best alternative use of money, time, or resources.

off trading stocks on Wall street.

25.

1 point

What are the factors of production?

land, labor, and capital

the measure of the efficiency with which goods and services are produced

goods and services

scarcity, shortage, and productivity

26.

1 point

The "graying of America" lead to the drop in the crime rate because

the criminals were being sent to gray penitentiaries.

it was believed the criminals were aging.

the criminals were receiving mental assistance.

the criminals were moving out of America.

27.

1 point

Increase in specialization and division of labor cause more _________________.

28.

1 point

An economic model, in the form of a line graph, that shows how an economy might use its resources to produce two goods is called

a tradeoff.

a production possibilities frontier.

opportunity cost.

the law of diminishing utility.

29.

1 point

What would it mean to an economy if a PPF were curved instead of straight?

The tradeoffs in that economy would not be the same at every point on the curve.

The opportunity cost when choosing to produce more of either good remains the same.

The ability of a country to produce either good is equal.

A curved PPF indicates a growing economy; a straight PPF indicates a shrinking economy.

30.

1 point

Which scenario would be an example of the law of diminishing marginal utility?

sitting down for the first time after a 6 hour work shift

eating the 12th marshmallow in a row

waiting for the bell to ring in your last class

getting a free soda

31.

1 point

Why are tradeoffs necessary?

Resources are limited.

People want different things.

Advertisers promote products.

Every product has flaws.

32.

1 point

When Amy returns a good library book without finishing it so she won’t have to pay a late fee, what is her opportunity cost?

paying the fee

reading a different book

finishing the book

paying for something else

33.

1 point

Our wants are

in short supply.

unlimited.

scarce.

equal to our resources.

34.

1 point

What does every point outside a PPF represent?

an unattainable production possibility

a less efficient, but attainable, production possibility

a shrinking economy

a growing economy

35.

1 point

The “bursting of the crack bubble” contributed to the crime drop in the 1990s due to

decreased prices in crack cocaine.

people were smoking less crack.

violent crimes were not worth the payout.

all of the above

36.

1 point

Productivity and _______________ help economic growth; investments in human capital are among the most profitable of all investments.

37.

1 point

Something has ___________ when it has utility and its relatively scarce.

38.

1 point

What does it mean to maximize utility?

to become as efficient as possible

to strengthen the skills of a workforce

to strengthen a national infrastructure

to gain the most satisfaction possible

39.

1 point

Services are

activities done for us by others.

our desires for things that meet our needs.

physical objects produced for sale.

things produced for the betterment of all people.

40.

1 point

What is the opportunity cost of going to college rather than starting work immediately after high school?

the amount of college tuition, fees, and living expenses you will have to pay

the greater ability to choose a satisfying career path

the increased salary you will make after earning a college degree

the lost wages and work experience from the job you would have taken

41.

1 point

The economic way of thinking involves simplification with model building, ________________, to evaluate alternatives, and incremental decision making.

42.

1 point

People’s wants are unlimited. This fact means that which of the following is always present?

costs of production

marginal utility

scarcity

shortages

43.

1 point

What do economists mean when they use the word "land"?

the time and effort people devote to producing goods and services

natural resources used to produce goods and services

the money used to invest in order to produce future wealth

real estate containing buildings where goods and services are produced

44.

1 point

A countries wealth is defined by

the accumulation of those products that are tangible, scarce, useful, and transferable from one person to another.

determined by individually wealth.

the services provided and labor force.

the number of people who have an annual income of over a million dollars.

45.

1 point

What are the factors of production?

land, labor, and capital

risk and opportunity

goods and services

wages, salaries, and profits