QUIZ - CH 1 AND 2 - AC

Transcription

1 QUIZ - CH 1 AND 2 - AC Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The situation in which some necessities have little value while some non-necessities have a much higher value is known as a. paradox of value. c. trade-offs. b. opportunity cost. d. economic interdependence. 2. Manufactured goods needed to produce other goods and services are called a. nondurable goods. c. Gross Domestic Product (GDP). b. capital goods. d. consumer goods. 3. Division of labor is a characteristic of a. home craft businesses. c. classroom education. b. assembly line production. d. entrepreneurship. 4. The study of economics is important because it enables us to a. describe our standard of living. b. increase our consumption of consumer goods. c. become better decision makers. d. determine what goods ought to be produced. 5. It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The ta[i]lor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a ta[i]lor... All of them find it [in their best interests] to employ their whole industry in a way in which they have some advantage over their neighbours, and to purchase...whatever else they have occasion for. From Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, What economic concept is Adam Smith describing in this passage? a. division of labor c. productivity b. specialization d. paradox of value 6.

2 In this production possibilities frontier, what could cause production to move from point a to point e? a. factories that are available but idle c. the availability of additional resources b. increased productivity d. economic growth 7. The dollar value of all final goods, services, and structures produced within a country s borders in a single year is a. its standard of living. c. a cost-benefit analysis. b. financial capital. d. Gross Domestic Product (GDP). 8. A popular model used to illustrate the concept of opportunity cost is a. the production possibilities frontier. c. the paradox of value. b. entrepreneurship. d. the factors of production. 9. An economy at its production possibilities frontier is operating a. with slow economic growth. c. without division of labor. b. at full potential. d. as a free enterprise economy. 10. Actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of a. opportunity costs. c. specialization. b. trade-offs. d. economic interdependence Which of the following choices best describes what this production possibilities frontier is depicting? a. alternative possibilities c. cost of idle resources b. opportunity cost d. economic growth Percent of Chinese Families Owning Household Appliances Year Color TV Air Telephones Automobiles Sets Conditioners

3 What does this table show about China s standard of living? a. It is falling. b. It is rising. c. It is staying about the same. d. It rose from 1985 to 1990 and then fell. 13. Economic literacy is [like] having a working knowledge of a foreign language. If you are with a group of foreigners and don t speak their language at all,...you feel excluded... If you have a rudimentary working knowledge of the language, you can at least follow the drift of the conversation, ask a few questions and feel that, even if you are not getting the fine points, you are not totally left out and you have a basis for acquiring more knowledge. That, it seems to me, is what economic literacy means a rudimentary working knowledge of the concepts and language of economic activity... Source: Alice Rivlin, economist. According to Alice Rivlin in the passage, if you have a rudimentary working knowledge of economic concepts, you will be a. left out of conversations about economic issues. b. able to ask questions to gain more knowledge. c. unable to talk about economic issues with foreigners. d. able to understand the fine points about economic issues. 14. What factor of production do these images illustrate? a. labor c. capital b. land d. entrepreneurship

4 15. What factor of production do these images illustrate? a. land c. capital b. labor d. entrepreneurship 16. The study of economic theory is not defensible on aesthetic grounds it hardly rivals in elegance the mathematics or physics our sophomores learn. The theory is studied only as an aid in solving real problems, and it is good only in the measure that it performs this function. George J. Stigler, "Monopolistic Competition in retrospect," in Five Lectures on Economic Problems, London: Longmans, Green and Co., 1949, p. 22. According to this author, a good economic theory is one that a. is as elegant as a theory in mathematics or physics. b. helps solve real problems. c. includes mathematics. d. is aesthetically sound. 17. Research has long demonstrated the educational value of early intervention for America s at-risk children, but a new study also shows the federal programs are a wise public investment. [A] cost-benefit analysis of the federally funded Chicago Child-Parent Center program, which serves children from low-income families in Chicago s inner city [shows that] an average annual cost of $6,730 per child...generated a total return to society at large of $47,759 per participant. Source: Cost Benefit Analysis, AScribe Newswire, June 26, 2001 In the cost-benefit analysis described in the passage, who are the investors? a. parents c. all of society b. children d. local businesses

5 18. Which group of people ultimately determines the products that a free enterprise economy produces? a. Congress c. local government b. property owners d. consumers 19. Which of the following is a characteristic of a traditional economy? a. It discourages new ideas and new ways of doing things. b. Public services are available at little or no cost. c. It has a great deal of economic freedom. d. It provides workers with few incentives to work hard. 20. A market economy a. does not provide for everyone's basic needs. b. limits the choices of goods and services available. c. permits extensive government intervention. d. offers a high degree of certainty for its workers. 21. Which economic system can change direction quickly and drastically? a. traditional c. market b. command d. mixed 22. Diaguita Indians have lived in this region for generations...we grow beans, corn and potatoes on the mountain slopes. To irrigate these crops, we still use the channels built centuries ago by our ancestors. We also breed llamas...in our community, the more llamas you own, the richer you are. In the economic system described in this passage, answers to the basic economic questions would be determined by a. habit and custom. c. market prices. b. government leaders. d. individual consumers. Matching 23. economics 24. capital Match each statement with the correct item below. a. study of how people try to satisfy their needs through the careful use of scarce resources b. people with all their efforts, abilities, and skills c. condition of not having enough resources to produce all the things people want d. worth that can be expressed in dollars and cents e. tangible item that is economically useful or that satisfies an economic want f. alternative choices made by consumers in the marketplace g. quality of life based on the ownership of the necessities and luxuries that make life easier h. sum of those economic products that are tangible, scarce, useful, and transferable i. cost of the next-best alternative use of money, time, or resources when one choice is made rather than another j. tools, equipment, machinery, and factories used in the production of goods and services

6 25. scarcity 26. opportunity cost Match each statement with the correct item below. a. diagram representing various combinations of goods and/or services that an economy can produce when all productive resources are fully employed b. any good that lasts three years or more when used regularly c. process of using up goods and services to satisfy wants and needs d. a measure of the amount of goods and services produced with a given amount of resources in a specific period of time e. where factors of production are bought and sold f. economy in which consumers and privately owned businesses make the majority of the WHAT, HOW, and FOR WHOM decisions g. basic requirement for survival h. manufactured good that is used to produce other goods and services i. something we would like to have but is not necessary for survival j. work that is performed for someone 27. capital good 28. production possibilities frontier 29. productivity 30. free enterprise economy