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ECON Ch. 1 Post

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 
 
Part 1: Main Idea
 

 1. 
A person who makes goods or provides services is called a
a.
consumer
b.
customer
c.
provider
d.
producer
 

 2. 
Being guided by self-interest when making a decision means that you
a.
act in a selfish manner
b.
attempt to maximize utility
c.
ignore the desires of others
d.
reduce the incentives of others
 

 3. 
The satisfaction received from using one more unit of a good or service is called
a.
opportunity cost
b.
opportunity benefit
c.
marginal cost
d.
marginal benefit.
 

 4. 
A graphic organizer that is especially useful for showing changes over time is a
a.
line graph.
b.
bar graph.
c.
pie graph.
d.
circle graph.
 

 5. 
A pie graph would be best type of graph to show
a.
a comparison of Internet use in various regions of the world
b.
a comparison of Internet use in Europe in 2000 and 2005
c.
the change in Internet use in Europe over the last five years
d.
the increase in Internet use among teenagers in Europe
 

 6. 
A microeconomist would study
a.
a general decline in prices
b.
a rise in tea prices.
c.
the ups and downs of business cycles
d.
the impact of national tax policies
 

 7. 
A normative economist might conclude that
a.
a lottery can be conducted in several ways
b.
certain types of lotteries raise millions of dollars
c.
a lottery is a bad policy because it burdens the poor
d.
certain types of lotteries raise more money than others
 

 8. 
Adam Smith argued that a nation would be wealthier if it engaged in
a.
mercantilism
b.
free trade
c.
state-controlled mercantilism
d.
state-controlled trade
 

 9. 
Wants are unlimited and
a.
constant
b.
costly
c.
easily fulfilled
d.
ever changing
 

 10. 
A country seeking to increase tourism will probably increase the production of
a.
tractors
b.
hotels
c.
weapons
d.
gaskets
 

 11. 
Deciding to go to a ballgame rather than do your homework is an example of a(n)
a.
production possibility
b.
marginal cost
c.
trade-off
d.
opportunity expense
 

 12. 
The benefits and costs of a choice is shown by using a
a.
statistical table.
b.
decision-making grid.
c.
circle graph.
d.
line graph
 

 13. 
Data on DVD sales for three different years can best be compared by using a
a.
line graph
b.
bar graph
c.
circle graph
d.
pie graph
 

 14. 
A line graph that shows rising and falling profits over several years would have a(n)
a.
upward slope
b.
downward slope
c.
varied slope
d.
almost level slope
 

 15. 
A macroeconomist would be interested in the
a.
general rise of prices
b.
decline of cheese prices
c.
fluctuation of oil prices
d.
sharp rise of coffee prices
 

 16. 
Opportunity costs would be increased by
a.
increasing the production of a product
b.
keeping the production of a product the same
c.
decreasing the production of a product
d.
switching from producing one product to another
 

 17. 
Which of the following best describes wants?
a.
limited and ever changing
b.
unlimited and ever changing
c.
limited and never changes
d.
unlimited and never changes
 

 18. 
Which of the following buys goods for personal use?
a.
consumer
b.
producer
c.
advocate
d.
client
 

 19. 
Into what four categories do economist divide factors of production?
a.
land, labor, capital, and entrepreneurship
b.
land, labor, money, and entrepreneurship
c.
resources, labor, capital, and entrepreneurship
d.
resources, labor, money, and entrepreneurship
 

 20. 
What does the saying "There is no such thing as a free lunch" mean?
a.
some things cost nothing
b.
most things cost nothing
c.
most things cost something
d.
everything costs something
 

 21. 
Which of the following examines the costs and expected benefits of a choice?
a.
choice-benefit analysis
b.
cost-profit analysis
c.
cost-benefit analysis
d.
choice-profit analysis
 

 22. 
Who wrote The Wealth of Nations ?
a.
Alexander Hamilton
b.
Thomas Malthus
c.
Karl Marx
d.
Adam Smith
 

 23. 
The United States decides what goods to produce by letting
a.
only the government decide
b.
the producers and government decide
c.
only the producers decide
d.
the producers and consumers decide
 

 24. 
A country that does not possess oil is unlikely to produce
a.
gasoline
b.
rice
c.
corn
d.
furniture
 

 25. 
A society with a large unskilled labor force will most likely practice
a.
machine-intensive farming methods
b.
labor-intensive farming methods
c.
machine and labor-intensive farming methods
d.
few intensive farming methods
 

 26. 
To be a successful entrepreneur requires a willingness to
a.
play it safe
b.
borrow money
c.
take risks
d.
limit risks
 

 27. 
An example of a trade-off is
a.
giving up going to a movie to spend time shopping
b.
giving up going to a movie because it got bad reviews
c.
going to a movie to see your favorite move star
d.
going to a movie because it got good reviews
 

 28. 
A supermarket running out of bananas is an example of
a.
scarcity
b.
a shortage
c.
utilization
d.
an opportunity cost
 

Essay
 
 
Part 3: Extended Response
Answer the following questions on the back of this paper or on a separate sheet of paper.
 

 29. 
Imagine that you are an entrepreneur who wants to start up a line of gourmet coffees. What specific factors of production would you have to consider before starting such a venture.

Think About:
-  land
-  labor
-  capital
 

 30. 
Imagine that you have 10 hours of free time each week during the upcoming semester.  You are considering spending that time practicing for a basketball team or spending time with friends. Using a decision-making grid, conduct a cost-benefit analysis about this choice.

Think About:
-  trade-offs
-  benefits
-  opportunity costs
 



 
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