Question 1

Which of the following is the best example of land?
A)The ethanol refined from corn.
B)A factory that produces new goods and services.
C)The water used to make a soft drink.
D)A barber's chair.

Accepted Answer

Land refers to natural resources that are used in the production of goods and services. Water is a natural resource, making it the best example of land among the options provided.

Question 2

In economics,scarcity means that
A)A shortage of a particular good will cause the price to fall.
B)A production possibilities curve cannot accurately represent the trade-off between two goods.
C)Society's desires exceed the want-satisfying capability of the resources available to satisfy those desires.
D) The market mechanism has failed.

Accepted Answer

Scarcity refers to the limited availability of resources relative to society's unlimited wants and needs. This means that the resources available are not sufficient to produce and satisfy all the goods and services that people want or need. As a result, choices must be made about how to allocate these scarce resources, leading to trade-offs and opportunity costs.

Question 3

The opportunity cost of studying for an economics test is
A)Negative because it may improve your grade.
B)Zero because you knew when you registered for the class that studying would be required.
C)The money you spent on tuition for the class.
D)The best alternative use of your time.

Accepted Answer

The opportunity cost of studying for an economics test is the best alternative use of your time, as you could be doing any number of other activities instead of studying, such as hanging out with friends, watching TV, or doing homework for another class. By choosing to study for your economics test, you are forgoing the opportunity to engage in these other activities. Therefore, the opportunity cost of studying is the value of the next best alternative that you are sacrificing.

Question 4

Factors of production are
A)Scarce in every society.
B)Scarce only in advanced countries.
C)Scarce only in the poorest countries of the world.
D)Unlimited in quantity.

Accepted Answer

Factors of production refer to the resources required to produce goods and services. These resources include natural resources, labor, capital, and entrepreneurship. Since these resources are limited in nature, they are considered scarce in every society.

Question 5

The basic factors of production include
A)Land,labor,money,and capital.
B)Land,labor,money,and inputs.
C)Labor and money.
D)Land,labor,capital,and entrepreneurship.

Accepted Answer

The four basic factors of production are land, labor, capital, and entrepreneurship. Land refers to natural resources, labor refers to human effort, capital refers to equipment and machinery, and entrepreneurship refers to the ability to organize and take risks in order to create a profitable venture. Money and inputs are not considered basic factors of production, but rather tools or resources that help facilitate production.

Question 6

Given that resources are scarce,
A)A "free lunch" is possible,but only for a limited number of people.
B)Opportunity costs are experienced whenever choices are made.
C)Poor countries must make choices,but rich countries with abundant resources do not have to make choices.
D)Some choices involve opportunity costs while other choices do not.

Accepted Answer

The concept of opportunity cost arises precisely because resources are scarce and choices must be made. Whenever a choice is made, the next best alternative is foregone and this is the opportunity cost of the chosen option. Therefore, option B is the most appropriate choice.

Question 7

The role of the entrepreneur in an economy is to
A)Bring the factors of production together and assume the risk of production.
B)Work with government planners to determine what goods are produced.
C)Arrange bank financing for the owners of new businesses.
D)Ensure full employment of labor.

Accepted Answer

The entrepreneur is responsible for bringing together the factors of production (land, labor, and capital) and assuming the risk of production. This involves identifying market opportunities, organizing production processes, and making key business decisions. Entrepreneurs play a crucial role in driving innovation, creating new jobs, and promoting economic growth.

Question 8

The "guns versus butter" dilemma that all nations confront is that
A)Guns and butter can be produced using the same resources at the same time.
B)An increase in national defense implies more sacrifices of civilian goods and services.
C)An increase in national defense is possible only if we produce more butter.
D)All of the choices are correct.

Accepted Answer

The "guns versus butter" dilemma refers to the trade-off a nation faces when deciding how to allocate its resources between military defense (guns) and domestic goods and services (butter). Increasing military defense usually means diverting resources away from domestic goods and services, leading to a decrease in their production. Therefore, an increase in national defense implies more sacrifices of civilian goods and services. Option A is incorrect because it assumes that guns and butter can be produced simultaneously using the same resources, which is not always the case. Option C is incorrect because an increase in national defense does not necessarily require an increase in butter production. Option D is incorrect because it includes all choices, whereas only option B is the best choice.

Question 9

Economics can be defined as the study of
A)For whom resources are allocated to increase efficiency.
B)How society spends the income of individuals.
C)How scarce resources are allocated on a macro level to best meet society's goals or on a micro level to best meet an individual's or firm's goals.
D)None of the choices are correct.

Accepted Answer

Economics studies the allocation of scarce resources, and it can be on both macro and micro levels, either to meet society's goals or individual firms' goals. المفروض تحرك الايد باسرع شوي.

Question 10

Opportunity cost is
A)Measured only in dollars and cents.
B)The total dollar cost to society of producing the goods.
C)The difficulty associated with using one good in place of another.
D)The best alternative that must be given up in order to get something else.

Accepted Answer

Opportunity cost is the best alternative that must be given up in order to get something else.

Question 11

A consequence of the economic problem of scarcity is that
A)Choices have to be made about how resources are used.
B)There is never too much of any good or service produced.
C)The production of goods and services must be controlled by the government.
D)The production possibilities curve is bowed outward.

Accepted Answer

Scarcity means that there are limited resources but unlimited wants and needs, so choices have to be made about how those resources are allocated. This is the fundamental issue of economics and leads to the need for making trade-offs and prioritizing certain goods and services over others.

Question 12

Which of the following is not one of the three core economic issues that must be resolved?
A)How to produce the goods and services we select.
B)What to produce with unlimited resources.
C)Who should get the goods and services we produce.
D)What to produce with limited resources.

Accepted Answer

The three core economic issues that must be resolved are how to produce goods and services with limited resources, what to produce with limited resources, and who should get the goods and services that are produced. The concept of unlimited resources is not a realistic scenario in economics.

Question 13

Which economist argued that free markets unleashed the "animal spirits" of entrepreneurs,propelling innovation,technology,and growth?
A)Lord Kelvin.
B)Kenneth Olsen.
C)Irving Fisher.
D)John Maynard Keynes.

Accepted Answer

John Maynard Keynes argued that free markets could unleash the "animal spirits" of entrepreneurs, leading to increased innovation, technology, and economic growth.

Question 14

Opportunity cost may be defined as the
A)Goods or services that are forgone in order to obtain something else.
B)Dollar prices paid for final goods and services.
C)Dollar cost of producing a particular product.
D)Difference between wholesale and retail prices.

Accepted Answer

Opportunity cost refers to the goods or services that are given up or forgone in order to obtain something else. It is the value of the best alternative that must be given up in order to pursue a certain action or decision. Options B, C, and D do not accurately define opportunity cost.

Question 15

A production possibilities curve indicates the
A)Combinations of goods and services an economy is actually producing.
B)Maximum combinations of goods and services an economy can produce given its available resources and technology.
C)Maximum combinations of goods and services an economy can produce given unlimited resources.
D)Average combinations of goods and services an economy can produce given its available resources and technology.

Accepted Answer

A production possibilities curve shows the maximum combinations of goods and services that an economy can produce given its available resources and technology. It is a graphical representation of the concept of opportunity cost, which is the trade-off between producing one good or service over another. The curve illustrates that if an economy wants to produce more of one good, it must sacrifice producing some of another good. The curve assumes that resources are limited and fixed in the short run, so it shows the maximum potential output an economy can produce.

Question 16

Which of the following is not a factor of production?
A)A psychiatrist.
B)The $100,000 used to start a new business.
C)A bulldozer.
D)Six thousand acres of farmland.

Accepted Answer

The answer of Which of the following is not a...

Question 17

The fundamental problem of economics is
A)The law of increasing opportunity costs.
B)The scarcity of resources relative to human wants.
C)How to get government to operate efficiently.
D)How to create employment for everyone.

Accepted Answer

The fundamental problem of economics is the scarcity of resources relative to human wants. This means that there are not enough resources to satisfy all of our needs and wants, which requires us to make choices about how to allocate those resources. The other choices are important topics in economics, but they are not the fundamental problem.

Question 18

Capital,as economists use the term,refers to
A)The money needed to start a new business.
B)The costs of operating a business.
C)Shares of stock issued by businesses.
D)Final goods that are used to produce other goods and services.

Accepted Answer

Capital, in economic terms, refers to final goods that are used to produce other goods and services. This can include physical capital such as buildings, machinery, and equipment, as well as financial capital such as stocks and bonds. Capital is a key factor in economic growth and productivity, as it enables businesses to invest in new technology and expand their operations.

Question 19

Which of the following is an assumption under which the production possibilities curve is drawn?
A)Total unemployment is zero.
B)The supply of resources is fixed.
C)The price level is changing.
D)Technology is changing.

Accepted Answer

The production possibilities curve is drawn under the assumption that the supply of resources is fixed, meaning that the quantities of labor, capital, and natural resources available for use in production are constant.

Question 20

With respect to factors of production,which of the following statements is not true?
A)Factors of production are also known as resources.
B)In order to produce any good or service,it is necessary to have factors of production.
C)Factors of production include land,labor,capital,and entrepreneurship.
D)Only those resources that are privately owned are counted as factors of production.

Accepted Answer

This statement is not true. Factors of production include all resources, whether they are privately owned or not. Other statements (A, B, and C) are true.

Quiz 1: Economics: the Core Issues Appendix: Using Graphs

Which of the following is the best example of land?

In economics,scarcity means that

The opportunity cost of studying for an economics test is

Factors of production are

The basic factors of production include

Given that resources are scarce,

The role of the entrepreneur in an economy is to

The "guns versus butter" dilemma that all nations confront is that

Economics can be defined as the study of

Opportunity cost is

A consequence of the economic problem of scarcity is that

Which of the following is not one of the three core economic issues that must be resolved?

Which economist argued that free markets unleashed the "animal spirits" of entrepreneurs,propelling innovation,technology,and growth?

Opportunity cost may be defined as the

A production possibilities curve indicates the

Which of the following is not a factor of production?

The fundamental problem of economics is

Capital,as economists use the term,refers to

Which of the following is an assumption under which the production possibilities curve is drawn?

With respect to factors of production,which of the following statements is not true?