1. Economics Review 1

2. What is the human effort that is used to produce goods called? A profit B capital C labor D stock

3. What is the human effort that is used to produce goods called? A profit B capital C labor D stock

4. Which of the following is an example of capital? A land used to produce goods B managers’ salaries C machines used to produce goods D government regulations

5. Which of the following is an example of capital? A land used to produce goods B managers’ salaries C machines used to produce goods D government regulations

6. The tools a self-employed electrician uses in his or her business are examples of which of the following? A capital B entrepreneurship C land D labor

7. The tools a self-employed electrician uses in his or her business are examples of which of the following? A capital B entrepreneurship C land D labor

8. Which of the following best describes the relationship between factors of production and people’s wants? A Factors and wants are both limited. B Factors are limited and wants are unlimited. C Factors and wants are both unlimited. D Factors are unlimited and wants are limited.

9. Which of the following best describes the relationship between factors of production and people’s wants? A Factors and wants are both limited. B Factors are limited and wants are unlimited. C Factors and wants are both unlimited. D Factors are unlimited and wants are limited.

10. Which of the following most directly determines the cost of the factors of production? A supply and demand B wants C profit D natural resources

11. Which of the following most directly determines the cost of the factors of production? A supply and demand B wants C profit D natural resources

12. Workers in a shoe factory are voting on whether to accept the owner’s wage offer or hold a sit-down strike. Which two factors of production are most involved in this situation? A capital and entrepreneurship B labor and entrepreneurship C natural resources and capital D natural resources and labor

13. Workers in a shoe factory are voting on whether to accept the owner’s wage offer or hold a sit-down strike. Which two factors of production are most involved in this situation? A capital and entrepreneurship B labor and entrepreneurship C natural resources and capital D natural resources and labor

14. What happens if the supply of a factor goes up while the demand for the factor goes down? A Inflation sets in and leads to increased demand for the factor. B The price that can be charged for the factor goes down. C The cost of producing the factor goes up. D Nothing changes and the price of the factor stays the same.

15. What happens if the supply of a factor goes up while the demand for the factor goes down? A Inflation sets in and leads to increased demand for the factor. B The price that can be charged for the factor goes down. C The cost of producing the factor goes up. D Nothing changes and the price of the factor stays the same.

16. What are people called who assume business risks and manage new businesses? A producers B executives C entrepreneurs D consumers

17. What are people called who assume business risks and manage new businesses? A producers B executives C entrepreneurs D consumers

18. By finding less expensive lumber overseas, a furniture manufacturer reduces which of the following? A capital good costs B profit C natural resource costs D demand

19. By finding less expensive lumber overseas, a furniture manufacturer reduces which of the following? A capital good costs B profit C natural resource costs D demand

20. What is the most direct cause of scarcity? A pursuit of profit B competition for resources C the law of supply D the law of demand

21. What is the most direct cause of scarcity? A pursuit of profit B competition for resources C the law of supply D the law of demand

22. What is a business called that provides goods or services? A consumer B labor C producer D monopoly

23. What is a business called that provides goods or services? A consumer B labor C producer D monopoly

24. What may happen if consumers have less money to spend on products? A The economy may slow down, which may reduce prices for some factors. B International trade increases because foreign goods are cheaper. C Wages go up which increases labor costs. D Tax rates go up.

25. What may happen if consumers have less money to spend on products? A The economy may slow down, which may reduce prices for some factors. B International trade increases because foreign goods are cheaper. C Wages go up which increases labor costs. D Tax rates go up.

26. Which statement best describes the circular flow model of the economy? A It helps entrepreneurs decide where to locate their factories. B It is the plan for how to raise government revenue. C It helps entrepreneurs decide which goods to buy overseas. D It demonstrates how exchanges for scarce resources are made in the U.S. economy.

27. Which statement best describes the circular flow model of the economy? A It helps entrepreneurs decide where to locate their factories. B It is the plan for how to raise government revenue. C It helps entrepreneurs decide which goods to buy overseas. D It demonstrates how exchanges for scarce resources are made in the U.S. economy.

28. Which of the following statements most correctly describes an economic relationship? A Demand goes down when prices go down. B A lack of competition tends to decrease supply. C Scarcity has nothing to do with demand. D Supply is greatest in command economies.

29. Which of the following statements most correctly describes an economic relationship? A Demand goes down when prices go down. B A lack of competition tends to decrease supply. C Scarcity has nothing to do with demand. D Supply is greatest in command economies.

30. Which term is used to describe the basic economic problem that forces people to make decisions about how to use resources wisely? A profit B opportunity cost C scarcity D comparative advantage

31. Which term is used to describe the basic economic problem that forces people to make decisions about how to use resources wisely? A profit B opportunity cost C scarcity D comparative advantage

32. What are wages? A money a business has left after paying expenses B money used to pay for labor C money used to buy capital goods D money that is declining in value because of inflation

33. What are wages? A money a business has left after paying expenses B money used to pay for labor C money used to buy capital goods D money that is declining in value because of inflation

34. How are goods different from services? A Goods are manufactured. B Labor produces goods. C Demand influences a good’s cost. D Goods are scarce.

35. How are goods different from services? A Goods are manufactured. B Labor produces goods. C Demand influences a good’s cost. D Goods are scarce.

36. What is one way in which wages are different from salaries? A Wages impact profit. B Wages are typically paid by the hour. C Wages are taxed. D Wages have a greater impact on economic growth.

37. What is one way in which wages are different from salaries? A Wages impact profit. B Wages are typically paid by the hour. C Wages are taxed. D Wages have a greater impact on economic growth.

38. Which of the following is a manufacturer’s most likely response to a shortage of skilled workers? A change his or her product line B increase wages to attract more of the scarce workers C increase prices to make higher profits D go out of business entirely

39. Which of the following is a manufacturer’s most likely response to a shortage of skilled workers? A change his or her product line B increase wages to attract more of the scarce workers C increase prices to make higher profits D go out of business entirely