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ECON CH 1-2

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 

Which of the following makes someone an entrepreneur?
a.
earning a lot of money as a computer programmer
b.
becoming a highly paid dancer
c.
running a service that hires people to install sprinkler systems in lawns
d.
inventing and selling the rights to manufacture a computer game
 

 2. 

A country’s production possibilities increase because the available workers become more skilled at using a computer. This is an example of growth caused by
a.
global resources
c.
technology
b.
physical capital
d.
production opportunity
 

 3. 

Which of the following is an example of scarcity, rather than shortage?
a.
A popular toy is sold out during the busy holiday season.
b.
You have spent your last penny and payday is a week away.
c.
A person wants an endless supply of everything but cannot have it.
d.
Gasoline was rationed in America during World War II.
 

 4. 

The physical capital used by a woodworker to make furniture would include
a.
saws and drills.
c.
hard work and time.
b.
wood and glue.
d.
a workshop and money.
 

 5. 

Human capital includes
a.
the salary paid to an accountant.
b.
a taxi driver’s knowledge of the city streets.
c.
the machinery used to weave cloth.
d.
the equipment used by a doctor to cure a patient.
 

 6. 

What could cause a production possibilities curve to move down and to the left?
a.
A nation loses land after being defeated in a war.
b.
A baby boom 20 years ago resulted in a large number of young adults in the population today.
c.
An increase in the use of computer technology speeds up production.
d.
Thousands of investors from overseas invest money in a nation’s economy.
 

 7. 

What can cause a production possibilities curve to move to the right?
a.
Thousands of people move out of the country.
b.
A new invention lowers the cost of production.
c.
An epidemic kills thousands of young men and women.
d.
The population is growing increasingly old.
 

Matching
 
 
Identifying Key Terms
Match each term with the correct statement below.
a.
efficiency
g.
shortage
b.
goods
h.
opportunity cost
c.
trade-off
i.
underutilization
d.
production possibilities graph
j.
labor
e.
scarcity
k.
factors of production
f.
services
 

 8. 

actions or activities that one person performs for another
 

 9. 

physical objects that can be exchanged
 
 
Identifying Key Terms
Match each term with the correct statement below.
a.
factors of production
g.
growth
b.
production possibilities frontier
h.
opportunity cost
c.
production possibilities graph
i.
underutilization
d.
trade-offs
j.
efficiency
e.
shortage
k.
services
f.
scarcity
 

 10. 

land, labor, and capital
 



 
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