Economics: Today and Tomorrow © 2012

Chapter 1: What Is Economics?

What Is Economics?

1
The need to make choices arises because ______.
A)some things are not limited
B)shortages are a constant situation
C)all resources are limited
D)people need to share their resources
2
The four factors of production are the resources of land, labor, capital and _____.
A)productivity
B)entrepreneurship
C)technology
D)services
3
The human effort directed toward producing goods and services is known as _____.
A)labor
B)goods
C)capital
D)technology
4
What do we call the advance in knowledge that leads to new and improved goods and services and better ways of producing them?
A)Capital
B)Technology
C)Economics
D)Labor
5
In a trade-off, opportunity cost is the value of the _____.
A)factors of production
B)scarce resources
C)action that was chosen
D)next best alternative
6
Which of the following is defined as a graph showing the maximal combinations of goods and services that can be produced from a fixed amount of resources in a given period of time?
A)Trade-off
B)Opportunity cost
C)Production possibilities curve (or frontier)
D)Guns versus butter
7
Economic models are useful because they _____.
A)can help people analyze the way the real world works
B)provide every detail about a problem to be studied
C)judge the value of economic events
D)make testing hypotheses unnecessary
8
Why can't economic models judge whether policies are good or bad?
A)Models are not good enough.
B)Judgments depend on values.
C)Models are not based on fact.
D)Economists do not test their hypotheses.
9
Different schools of economic thought exist because _____.
A)economics deals with values
B)political leaders determine economic theories
C)personal beliefs influence how economists apply facts to theories
D)economists evaluate different kinds of data
10
The beliefs or characteristics that a person or group considers important are known as their _____.
A)economic model
B)hypothesis
C)economic system
D)values
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