Multiple Choice
Identify the choice that best completes the
statement or answers the question.
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1.
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The lack of which of the following represents a scarcity?
a. | orange juice because the trucks carrying it are on strike | b. | enough workers to
finish two jobs because there’s a limited supply of workers | c. | enough workers to
work at night because the pay is too low | d. | grapefruit juice because very few people want
to buy it |
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2.
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One example of an entrepreneur is
a. | a writer who is hired by a film studio to adapt a novel into a
screenplay. | b. | a lawyer in a high-profile law firm that specializes in business
law. | c. | an Olympic ice skater who later decides to join a professional ice
show. | d. | an artist who runs a business painting murals in office buildings and
restaurants. |
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3.
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Which of the following is a “guns or butter” decision?
a. | A man must decide whether to install an alarm system in his house or buy new
furniture for the living room. | b. | A woman has to decide whether to replace her
old car with a new sports car or a family sedan. | c. | A country must decide whether to use its steel
to build new fighter jets or new sports cars. | d. | A school has to decide whether to build a new
gym or renovate the auditorium. |
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4.
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One example of thinking at the margin is
a. | determining whether it is better to spend your savings on a new CD player or on a
television. | b. | deciding whether the benefit of working two extra hours per day is worth the
sacrifice of study time. | c. | putting all of your money in a savings account
because the interest rates are so high. | d. | deciding to buy a car you don’t really
like because it is significantly less expensive than the one you
want. |
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5.
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Which of the following is NOT shown on a production possibilities curve?
a. | all of the goods and services an economy has the ability to
produce | b. | the efficiency of an economy | c. | whether an economy has grown or
shrunk | d. | the opportunity cost of a decision to produce more of one good or
service |
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Matching
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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 |
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6.
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most desirable alternative given up when people choose one course of action
over another
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7.
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limited quantities of resources to meet unlimited needs or desires
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8.
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representation of alternative ways to use an economy’s resources
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9.
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use of fewer resources than the economy is capable of using
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10.
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actions or activities that one person performs for another
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11.
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physical objects that can be exchanged
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12.
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paid effort that people devote to a task
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13.
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use of resources in a way that maximizes output of goods and services
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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 |
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14.
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greatest output of goods and services through the best use of resources
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15.
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land, labor, and capital
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16.
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temporary lack of one or more goods
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17.
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the most attractive alternative that is given up when an economic decision is
reached
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18.
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the line that shows different production possibilities for an economy
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19.
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all the possible alternatives that are rejected when a choice is made
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20.
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representation of the possible ways an economy could use resources
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21.
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the basic economic condition of all goods and services
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