Economics and Difficulty

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  • Topic: Economics, Opportunity cost, Production-possibility frontier
  • Pages : 5 (1007 words )
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  • Published : February 21, 2013
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Chapter 01 - Economic conceptsChapter 01 - Economic concepts Student: ___________________________________________________________________________ 1.|Economics is a study of: A. |scarcity.|B. |production.|C. |labour resources.|D. |money.||

2.|Opportunity cost means: A. |wasted opportunities.|B. |costs incurred in purchasing goods and services.|C. |alternatives forgone.|D. |the costs of production.||
3.|The production possibilities frontier illustrates: A. |current production levels.|B. |a society's level of consumption.|C. |a range of alternative levels of output.|D. |decisions on how to produce.||

4.|A point inside the production possibilities curve could represent: A. |an impossible output according to static analysis.|B. |unemployment.|C. |new technology.|D. |an efficient use of resources.||

5.|Capital is: A. |money invested in shares.|B. |a naturally occurring resource.|C. |a good used to produce other goods.|D. |totally reliant on labour for production.||
6.|Every economy is faced with: A. |unlimited wants and unlimited resources.|B. |increasing labour resources.|C. |unlimited wants, limited resources.|D. |limited wants and resources.||
7.|An office building represents: A. |an example of a land resource.|B. |capital.|C. |opportunity cost.|D. |scarcity.||
8.|An economy can produce outside its production possibility frontier when: A. |new technology is developed.|B. |people limit their choices.|C. |distribution systems are improved.|D. |never||
9.|In deciding how to produce, an economy evaluates: A. |cost of technology.|B. |availability of labour.|C. |levels of skill.|D. |All of the given answers are correct.||
10.|Consumer wants are: A. |limited.|B. |usually misguided.|C. |often recurrent.|D. |do not involve choice.||
11.|Economic wants are limited at any point in time. True False|
12.|Resources are also known as factors of production. True False|
13.|All economic systems try to answer the question of what to produce. True False|
14.|All persons are consumers. True False|

15.|The economic cost of a decision is the alternative foregone. True False|
16.|Our needs and wants are limited. True False|

17.|Capital is any good used in the production process to produce other goods. True False|
18.|Buying a refrigerator for use in a store is an example of consumption. True False|
19.|Productivity can be measured by considering what can be produced for each hour of work. True False|
20.|When the quantity and/or quality of goods increase over time, the production possibility frontier shifts inwards. True False|
21.| Terms to their definitions 1. 'Any good used in the production process to produce other goods' | Economics | ____ |2. 'Anything that is used in the production of goods and services' | Opportunity cost | ____ |3. 'Alternative opportunities forgone when a choice is made' | Wants | ____ |4. 'The natural resources in an economy' | Capital | ____ |5. 'Desire for complex commodities that improve the quality of our lives beyond survival level' | Resources | ____ |6. 'A study of the way in which a society uses its scarce resources to satisfy its unlimited wants' | Land | ____ ||

Chapter 01 - Economic concepts Key

1.|Economics is a study of: A. |scarcity.|B. |production.|C. |labour resources.|D. |money.||
Difficulty: Easy |
2.|Opportunity cost means: A. |wasted opportunities.|B. |costs incurred in purchasing goods and services.|C. |alternatives forgone.|D. |the costs of production.||
Difficulty: Medium |
3.|The production possibilities frontier illustrates: A. |current production levels.|B. |a society's level of consumption.|C. |a range of alternative levels of output.|D. |decisions on how to produce.||

Difficulty: Medium |
4.|A point inside the production possibilities curve could represent: A. |an impossible output according to static...
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