HONORS ECON CHAPTER 1 TEST STUDY GUIDE

Persons who perform such actions as cutting hair or teaching school are providing a _______________.

service

When people make new machines that help produce other goods and services, they are creating _______________________ goods, otherwise known as _____________________ capital.

capital

physical

The term _______________, otherwise known as ______________________ resources refers to water, forests, minerals, energy sources and all other natural resources used to produce goods and services.

land

natural

The two categories of capital are ______________________ and _________________________.

physical

human

Factories, fork-lifts and machinery are examples of ____________________ goods, otherwise known as __________________________ capital.

capital

human

The factor of production ________________________ describes the effort that a person devotes to a task and is paid for.

labor

The study of how people seek to satisfy their needs and wants by making choices about how to use their resources is _________________________________.

econ

Which of the following is an example of using physical capital to save time and money?

a. Hiring more workers to do a job

b. Purchasing new printers for a real estate office that print 100 pages per minute

c. Switching from oil to coal to make production cleaner

d. Lowering workers' wages to increase profits

b. Purchasing new printers for a real estate office that print 100 pages per minute

What does an economist mean by the term land?

a. Farmland only

b. Food crops grown on farmland as well as the farmland itself

c. Goods and services that are produced from the land

d. All natural resources used to produce goods and services

d. All natural resources used to produce goods and services

A worker's education contributes to his

a. Natural resources

b. Physical capital

c. Human capital

d. Scarcity

c. Human capital

Which of the following is an entrepreneur?

a. A person who earns a lot of money as a singer or a musician

b. A person who creates a game and sells it to a game manufacturer

c. A person who starts an all-organic cleaning supplies business that employs 10 people

d. A person who works as a highly paid computer programmer

c. A person who starts an all-organic cleaning supplies business that employs 10 people

What is the difference between a shortage and scarcity?

a. A shortage can be temporary or long-term, but scarcity always exists

b. A shortage results from rising prices; scarcity results from falling prices

c. A shortage is a lack of all goods and services; scarcity concerns a single item

d. There is no real difference between a shortage and scarcity

a. A shortage can be temporary or long-term, but scarcity always exists

Resources that are used to make all goods and services are called _______________________ of _________________________________.

factors

production

When producers can't or won't produce goods and/or services at current prices, they will experience a _______________________________.

shortage

Physical capital benefits a business or economy by helping save ____________________ and ______________________. The result of using physical capital is the business or economy will be operating more _________________________________.

money

time

efficiently

List the four factors of production.

-labor

-capital (human/physical)

-entrepreneurship

-land (natural resources)

Goods and services like Starbucks, expensive cars and flat-screen TVs are _________________ because they are not necessary for survival.

wants

The study and analysis of one part of an economy is called ____________________________________.

micro encon

The study and analysis of a national economy, or a large section of a country's economy is called ___________________________________________.

macro encon

Food, clothing, shelter and medical care are ________________ because they are necessary for survival.

needs

People must make economic choices to satisfy their ________________ and __________________.

wants

needs

True/False: Scarcity will always exist.

true

True/False: A shortage will always exist.

false

True/False: Every country has the resources to produce as much guns and butter as it needs and wants.

false

True/False: All workers with human capital possess the skill and ability to be a successful entrepreneur

false

True/False: Thinking at the margin forces a person, business or economy to produce only one type of good or service.

false

True/False: All resources are scarce

true

Mrs. B is hiring a marketing analyst to study her business plan and help her create an advertising campaign for the city of Upland to increase her donut sales. This study of her small business is an example of ________________________________________.

micro econ

A country's production possibilities increased because the workers became more skilled at using computers. This is an example of economic growth caused by _______________________ _________________________.

human capital

Shoes, backpacks and books are considered _____________________________ goods, while tractors, assembly line machines and computerized cash registers are considered ____________________ goods.

consumer

capital

Going to AMC and paying to watch the movie in the theatre is considered a ______________________ because you are paying AMC to provide the viewing experience. Going to Target and buying a blue-ray movie is considered a _________________________ because you are paying for a physical object.

service

good

Specifically explain why scarcity will always exist.

-resources will always be limited

-limited resources > unlimited wants and need

Which worker would (most likely) be paid more: a laborer or a worker with human capital? Be able to identify at least 2 specific reasons why that type of worker will be paid more.

-more skill

-more education

-more experience

-can increase productivity

-can enhance business creativity and innovation

An economy that is not using all its resources to gain the maximum possible production is

_____________________________, also known as ______________________________ its resources.

inefficient

underutilization

The economic concept of guns or butter means that

a. A person can spend extra money either on sports equipment or food

b. A company must decide whether to manufacture guns or butter

c. A government must decide whether to produce more or less government, military or consumer goods

d. A government can buy unlimited military and civilian goods if it is rich enough

c. A government must decide whether to produce more or less government, military or consumer goods

Sam has $40.00. He wants to buy a Laser Tag gun and a Nerf football, but he doesn't have enough money to buy both items. He chooses to buy the Nerf football. The fact that he gets to play football games with his friends is the _____________________________ and missing out on helping his friends defend their Laser Tag Championship is the ______________________ ______________ of his choice

trade off

opportunity cost

An economy that is producing the maximum amount of goods and services it can with the resources it has is _______________________________.

efficient

The government of B-Land must decide how to use its resources to make hospitals and submarines. The "butter" that B-Land will make are the ____________________________ and the "guns" that B-Land will make are the ________________________________.

hospitals

submarines

As an economy/business increases its resources, its' _____________________ will also increase and it will experience _________________________ ___________________

production

econ growth

When an economy or business increases its capacity and/or resources to produce more goods and services, it is experiencing ______________________ ___________________.

econ growth

Mrs. B has $10,000 to invest in Mrs. B's Donut Shop. She could buy two new donut fryers, or 5 table and chair sets. After receiving some wise counsel, she decides to buy one new donut fryer and 3 table and chair sets. When Mrs. B makes decisions in this manner, she is exemplifying the economic principle of ____________________________ ________ __________ ______________________

thinking at the margin

Mrs. B has $400 to buy clothes for her family. She could spend the $400 to buy new clothes for Jenna, Bryan and Jacob, or she could buy herself a really nice outfit. She wisely chooses to buy new clothes for her children. In this scenario, the fact that her children are happy and well-dressed is the ____________________________ and the fact that Mrs. B is going to keep wearing her same old clothes is the __________________________ __________________ of her choice

trade off

opportunity cost

The purpose of a production possibilities curve/frontier/graph is to show _________________________ ways to use an economy's _________________________ for __________________________.

alternative

resources

productivity

__________________________ will almost always increase the amount of resources an economy or business has.

technology

The key to survival for any business and/or economy is to operate ________________ and to experience ______________________ ____________________.

efficently (ik its wrong i tried typing it like 5x)

econ growth

The purpose of a decision-making grid for an economy or business is to analyze the ________________ and ________________________ ______________ of a decision regarding how to use its resources

trade off

opportunity costs

Macro-economic trade-offs of technology include ______________________, increased _____________________ of goods and services, higher __________________ for companies and both micro-economic and macro-economic _____________________ __________________.

innovation

production

profits

econ growth

A macro-economic effect of the 1973 oil embargo is that people in other countries started buying more ________________________________ made cars.

japanese

As a result of the 1973 oil embargo, the US created the _________________________ ___________________________ __________________________, an emergency supply of 700 million barrels of oil.

strategic

petroleum

reserves

Which type of consumers had the hardest time paying for gasoline during the 1973 oil embargo?

low income families

The 1973 oil embargo __________________________ the supply of oil available in the US, which drastically ________________________ the price for the gasoline that was available for sale

decreased

increased

In 2025, the US is still __________________________ on foreign oil, and our supply of oil and gas prices are effected by ____________ and events in the middle-east.

dependent

OPEC

The 1973 oil embargo created both macro-economic effects on the US ____________________ and micro-economic effects on American __________________________.

econ

consumers

People who combine the factors of production to create new businesses to sell goods and/or services are _______________________________________.

entereparners

The economic principle which states that as production shifts from making one good or service to another, more resources are needed to increase production of the second good or service is the _______________ _______ _____________________________ ___________________.

law of increasing costs

War, holidays, bad weather and natural disasters can all cause a _______________________________, which means that consumers might want more of a good or service than producers are willing to make available at a particular price.

shortage

A physical object that someone produces, such as food, clothing or a video games is a ______________.

good

Skills and knowledge gained through education and experience is known as ______________________ _____________________________.

human capital

Tools, buildings and machines are examples of ______________________________ capital

physical

The production of ________________ primarily benefits consumers and private businesses in a country

butter

The production of ________________ primarily benefits consumers and private businesses in a country

guns

_____________________________ can hurt businesses and can prevent economic growth from occurring because business owners can't plan for or predict the price or availability of certain goods or services which aren't available at normal prices.

shortages

needs v. wants: clean water

need

needs v. wants: starbucks coffee

want

needs v. wants: basic food

need

needs v. wants: basic clothing

need

needs v. wants: basic shelter

need

needs v. wants: sees candy

want

needs v. wants: PS5

want

needs v. wants: basic shoes

need

needs v. wants: clean air

need

needs v. wants: diet coke

want

needs v. wants: gasoline to drive to the beach with friends

want

needs v. wants: disney tickets

want

needs v. wants: transportation for work or school

need

needs v. wants: movie tickets

want

needs v. wants: gum

want

goods v. services: haircut

service

goods v. services: calculator

good

goods v. services: a video gaming console

good

goods v. services: shoes

good

goods v. services: tutoring

service

goods v. services: car

good

goods v. services: babysitting

service

goods v. services: pizookie from bj's

service

goods v. services: college tuition

service

goods v. services: oil change

service

goods v. services: banana

good

goods v. services: going to the movie theatre

service

goods v. services: caramel macchiato from starbucks

service

goods v. services: getting a cavity fixed by a dentist

service

goods v. services: double double from in n out

service

guns v. budda: building a new skool

budda

guns v. budda: building new tanks

guns

guns v. budda: development of a new defensive radar system

guns

guns v. budda: funding for college scholarships

budda

guns v. budda: building a new library

budda

guns v. budda: building new hospitals

budda

guns v. budda: increased welfare benefits

budda

guns v. budda: sending troops to a foreign country

guns