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Basic Economic Concepts (Grades 11-12)

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Basic Economic Concepts

1. 
Economics is:
  1. The study of how businesses make profit
  2. The study of how we make choices when faced with limited resources
  3. The study of how we face unlimited resources
  4. The study of how the same people are late for class every day!
2. 
What is scarcity?
  1. When an unlimited amount of goods and services are available to meet limited wants and needs
  2. When a limited amount of goods and services are available to meet unlimited wants and needs
  3. When a limited amount of goods and services are available to meet limited wants and needs
  4. When an unlimited amount of goods and services are available to meet unlimited wants and needs
3. 
What are needs?
  1. Things that are important for survival
  2. Something people desire but is not needed to survive
  3. When people want more of a good that producers are willing to make
  4. Things that make our life better
4. 
Capital is:
  1. The effort people devote to tasks for which they are paid
  2. Any human made resource used to produce goods and services
  3. All natural resources used to make goods and services
  4. Washington D. C.
5. 
Goods are:
  1. Actions one person does for another
  2. When limited services are available to meet people’s needs
  3. The knowledge and skills gained from education and experience
  4. Physical objects that people buy
6. 
What are services?
  1. Physical objects that people buy.
  2. Something that is important to survive.
  3. Action a person does for another for pay.
  4. Anything people use to make things.
7. 
This does not affect wages.
  1. Experience
  2. Age
  3. Education
  4. Height
8. 
A trade-off is:
  1. The extra cost of adding one unit
  2. The alternatives we give up when we choose one action over another
  3. A process in which you compare what you will give up and gain from an action
  4. The money a person makes
9. 
This is the money a business keeps after all costs of production have been paid.
  1. Profit
  2. Capital
  3. Income
  4. Marginal cost
10. 
In this economic system, the government owns all the property and controls all resources.
  1. Free market economy
  2. Capitalism
  3. Communism
  4. Traditional economy
11. 
Cost/benefit analysis is:
  1. The extra benefit of adding one unit
  2. When the cost of adding one unit outweighs the benefit of producing it
  3. A process in which you compare what you will give up and gain from an action
  4. When a government has to decide between spending money on the military or social programs
12. 
What is a market?
  1. A transfer of goods, services and ideas that someone makes willingly
  2. When the government makes all the economic decisions
  3. A place that allows buyers and sellers to exchange things
  4. A place in Boston where they make chicken and tasty side dishes
13. 
What is specialization?
  1. When individuals and businesses do what they do best
  2. When individuals and businesses do what they can’t do well
  3. When individuals and businesses do what they do poorly
  4. When a person is really, really, really, terrible at what they do
14. 
What is not an advantage of specialization?
  1. Workers can be trained better
  2. Production increases
  3. Workers learn their skills better
  4. Less good are produced quicker
15. 
This is when people want a good or service and have the ability to pay for it.
  1. Law of demand
  2. Supply
  3. Demand
  4. Inflation
16. 
Buying a gallon of gas for $1.25 per gallon in 1990 and then paying $4.00 a gallon in 2011 is an example of:
  1. Inflation
  2. Medium of exchange
  3. Deflation
  4. Unit of account
17. 
Taking the bus to work instead of buying a new car is an example of:
  1. Medium of exchange
  2. Barter system
  3. Substitution effect
  4. Demand
18. 
This is information like age, race, gender, income and occupation of a population.
  1. Demographics
  2. Complements
  3. Expectation
  4. Demand curve
19. 
What does not affect demand?
  1. Price
  2. Demographics
  3. Population increase
  4. Demand schedule
20. 
This is when there is more demand than supply or not enough.
  1. Supply
  2. Shortage
  3. Demand
  4. Surplus
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