Transcript Domain 1 Fundamentals PPT

In a typical market economy, producers are allowed to choose which
products they wish to make and the amount of those products they will
produce. Consumers are allowed to choose which producer they will
purchase from and how many they will buy. This MOST DIRECTLY
supports the broad economic goal of
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Equity
Security
Freedom
Stability
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Which statement correctly describes the
relationship between investment in personal
education and standard of living?
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3.
4.
The higher the education level
a person has, the higher the
salary they are likely to make.
The higher the education level
a person has, the less likely
they are to increase
productivity.
The higher the education level
a person has, the lower the
salary they are likely to make.
The higher the education level
a person has, the more likely
they are to be unemployed
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A headline reads: “High Tech Firms Begin Producing New
Generation of Computers.” What basic economic question
is being addressed in this headline?
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1. For whom to
produce
2. When to produce
3. What to produce
4. How to produce
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What is the term for an economic system
where the government makes almost all the
economic decisions?
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2.
3.
4.
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Traditional
Capitalist
Command
Market
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Steel Beam, Inc. is looking to purchase a new steelprocessing machine and factory. In the circular flow
diagram, this transaction will take place in the
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1. Foreign exchange
market
2. Resource market
3. Product market
4. Government
controlled sector
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If Jim chooses job A, he will receive $50,000 a year, full benefits and 2
weeks of vacation. If he chooses job B he will receive $60,000 a year,
full benefits and no paid vacation. Assuming Jim chooses job B, which
statement is correct?
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2.
3.
4.
Jim’s opportunity cost is everything
he gave up at job A.
Jim’s opportunity cost is everything
he gained at job B.
Jim has incurred no opportunity
cost because the jobs were
completely different.
Jim’s opportunity cost is the
$50,000 he could have gotten at the
other job.
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Which statement is true in the
circular flow diagram?
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Businesses are demanders in
the product market and
suppliers in the factor market.
Businesses and households are
not components of the circular
flow diagram.
Households are demanders in
the factor market and suppliers
in the product market.
Households are demanders in
the product market and
suppliers in the factor market.
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Jill is trying to decide whether or not to buy a
car. If she is using rational decision making,
she should MAINLY consider
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4.
Whether the car will
lose value over time
The type of insurance
she will need
If buying the car will
incur any opportunity
costs
The marginal costs and
marginal benefits
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If someone has comparative advantage
in the production of a good, then
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With a given set of resources,
they produce the good at a lower
opportunity cost
With a given set of resources,
they produce more of the good
than the competitors
They can produce more of that
good than anyone else
They can charge more for the
good because they have a
higher opportunity cost.
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A production possibilities curve
shows
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2.
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All of society’s
resources
Choices a person
makes between items
The combination of
goods that can be
produced with a set of
resources
The technological
changes that improve
production
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Assume the United States has absolute advantage over
Singapore in the production of all goods. Which statement
about trade possibilities between the two countries is
correct?
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2.
3.
4.
They can still arrange a beneficial
trade if each one focuses production
on a good in which they have
comparative advantage
Since the United States has absolute
advantage in all goods, it is impossible
to reach a trade agreement
Singapore could benefit from a trade
with the United States, but the United
States would not benefit.
The terms of trade will be based on
the United State’s absolute advantage.
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Julio decides to attend college after high
school rather than getting a job. What is his
opportunity cost of attending college?
1. All the things he
could have done in
that time
2. His tuition and fees
3. The education he
gains in college
4. Wages he could
have earned at a
job
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Which provides the greatest incentive
for entrepreneurs to take risks?
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Interest
Prices
Profits
Inflation
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How does specialization relate
to voluntary exchange?
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2.
3.
4.
Cause and effect, voluntary
exchange forces us to
specialize
Cause and effect,
specialization leads to a
need for voluntary exchange
It has the same relationship
as productivity does to
growth
It is an inverse relationship
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In the production of chocolate chip cookies
sold in the commercial market, which
represents the factor of capital?
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2.
3.
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The oven used to bake
the cookies
The retailer who sells
the cookies
The dough used to bake
the cookies
The worker who
decorates the cookies
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Which headline describes a situation that
will MOST LIKELY lead to future economic
growth?
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2.
3.
4.
“Population increases
for 4th straight year!”
“Study shows a shift in
the production
possibilities curve to the
left!”
Government to pay for
more people to attend
college!”
“New natural resources
discovered!"
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Which transaction below will take place in
the product market on a circular flow
diagram?
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2.
3.
4.
The Pencil Company’s
paying yearly taxes.
Chris’ purchase of a
new video game.
Smithville Farm’s
purchase of 3 new
tractors.
Jenny’s posting of her
resume on a website.
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Growth, efficiency, and freedom are broad
social goals that are typically associated
with which type of economic system?
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2.
3.
4.
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Command
Monopoly
Traditional
Market
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Competition and free enterprise are most
common in which type of economic system?
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2.
3.
4.
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Market
Planned
Communist
Traditional
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The factors of production are
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2.
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Land, labor, capital, time
Human resources,
national resources, capital
resources, and time
Human resources, natural
resources, capital
resources, and
entrepreneurship
Consumption, investment,
government spending,
and net exports
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Which economic situation is characterized
by unlimited wants exceeding limited
resources?
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2.
3.
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Shortage
Surplus
Scarcity
Specialization
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When a retail store dedicates more floor
space to selling a new product, what is their
opportunity cost?
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2.
3.
4.
The chance to sell an old
product in that space
The income generated from
selling the new product
The money lost while setting
up the new space
The products that are placed
in the new space
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Which describes scarcity?
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2.
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4.
A condition where
supply exceeds demand
Unlimited wants
exceeding limited
resources
The situation that exists
when there is
temporarily a shortage
of a good or service
An unlimited demand for
goods and services
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Jim says “as the price of something
increases, the quantity demanded
decreases.” Jim is
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Incorrect, he means
supply instead of quantity
demanded
Incorrect, he means
demand instead of
quantity demanded
Correct, that is the law of
supply
Correct, that is the law of
demand
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When buyers and sellers interact in
a market, what is the result?
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4.
Usually a market clearing price
is determined.
Since buyers and sellers are
always changing their
preferences, markets become
unstable and unreliable
Over time, fewer and fewer
goods are produced because
buyers have all they want
Equilibrium quantities are
determined and then prices are
set by the government
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Which would cause a production
possibilities curve to shift to the left?
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2.
3.
4.
A massive disease that
wipes out ½ of the
population
Giving up some of one
good to produce
another
A discovery of new
resources
A huge population boom
in a country
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Joe lives in a country where the citizens decide where they want to
work, what they want to buy, and how much they want to pay for items.
Based on this limited description, Joe’s country operates under what
kind of economic system?
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4.
Command
Traditional
Market
Oligopoly
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A COMMAND economy is an economy
where the economic questions are
answered by
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The government
A foreign country
Tradition
The consumers
and producers
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An entrepreneur uses which productive
resources when creating a good or service?
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1. Scarcity, incentives,
interdependence
2. Monetary and fiscal
policies
3. Land, labor, capital
4. Technology,
education, growth
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Susan offers to trade her old iPod for Claudia’s cell
phone and Claudia accepts. Assuming both
products work perfectly, we can conclude that
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Susan places the same value
on cell phones as she does
for iPods
Claudia is now happier than
Susan
Both people have gained
because the exchange was
voluntary and non-fraudulent
Neither party has gained
because the exchange was
fraudulent
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In order to build a skyscraper, Builders Inc. purchases land,
rents out several cement trucks, and hires 400 construction
workers and 50 managers. Builders Inc. represents
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4.
Entrepreneurship
Labor
Land
Capital
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Which BEST describes
scarcity?
1. There is a limited
amount of a
resource to meet an
unlimited demand
2. When there is not a
lot of something
3. There is limited
demand for an item
that is plentiful
4. What is given up
when a choice is
made
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Which is NOT one of the three basic
economic questions that must be answered
in an economy?
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1. When to produce
2. What to produce
3. For whom to
produce
4. How to produce
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Sylvia purchased a product that claimed it could make her lose weight.
She later found out that the company purposefully did not actually
include the key ingredient in the product and it did not work. Which
terms best describe this transaction?
1. Voluntary and
fraudulent
2. Non-fraudulent and
mutually beneficial
3. Marginal and scarce
4. Rational and
equitable
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Which economic situation exists directly
because unlimited wants exceed limited
resources?
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1. Inflation
2. Productive
resources
3. Scarcity
4. Gain from trade
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At a restaurant you may find a host, waiter,
bus person, cook, and dishwasher. This is
an example of the economic principles of
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1. Division of labor
2. Specialization of
capital
3. Economy of scale
4. Marginal
productivity
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In economics rational decisions
occur when
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4.
Command economies
answer the three basic
economic questions
Marginal benefits equal or
exceed marginal costs
A budget is used for
spending and saving
decisions
Suppliers lower their prices
to increase demand
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In a market economy, the role of
buyers and sellers is to
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2.
3.
4.
Manipulate supply and
demand to provide the
best overall benefit to
everyone in society
Establish equilibrium
prices and quantities for
goods and services
Avoid causing inflation
Remove any
government interaction
in the market
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Opportunity cost is best
described as the
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2.
3.
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Monetary value of all
alternatives forgone when a
choice is made
Sum of all production costs
Value of the best alternative
forgone when a choice is
made
Most expensive resource
used in production
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Which is a human resource that Ms.
Johnson could use for her art gallery?
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2.
3.
4.
A security system to
protect the artwork
A series of paintings by
a prominent local artist
Knowledge of trends in
modern art
Light fixtures to help
display the artwork
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