Dual Credit Economics Name_________________________

Unit #1 Test 1 Date__________________________

Scarcity, and Production

Part I- Matching

___1. An item that is used in the production of other goods and services
___2. The worth of a good or service for the purposes of exchange
___3. Any human effort exerted in the production process
___4. The focus of a worker on only one or a few aspects of production in order to
improve efficiency
___5. A person who attempts to start a new business or introduce a new product

a. Specialization b. human resource c. capital resource

d. Credit e. value f. Entrepreneur

Part II- Multiple Choice

___6. The study of the choices people make to satisfy their needs and wants is called
a. Technology c. microeconomics
b. Economics d. macroeconomics

___7. The ability to fulfill all one’s needs without outside assistance is called
a. utility
b. interdependence
c. self-sufficiency
d. opportunity cost

___8. The factors of production are

a. capital resources, entrepreneurship, goods, and services
b. natural resources, human resources, services, and entrepreneurship
c. goods, services, human resources, and capital resources
d. natural resources, human resources, capital resources, and entrepreneurship

___9. The buildings, structures, machinery, and tools used in the production process are
called
a. consumer goods c. natural resources
b. capital goods d. human resources

___10. Which of the following is the goal of entrepreneurship?

a. to develop a new combination of the other factors of production, thereby
creating something of value.
b. To examine aspects of behavior of entire economies, such as unemployment in
the U.S.
c. To make goods and provide services using manufactured materials
d.To enhance existing products and improve methods for making products.

___11. People are forced to make decisions about how to use resources effectively
because
a. exchange depends on mutual needs.
b. allocation is a requirement of satisfaction.
 c. resources are limited and wants are unlimited.
d. satisfying needs and wants requires thought.

___12. A products usefulness to a person is called its

a. efficiency
b. availability
c. price
d. utility

___13. The opportunity cost of spending 4 hours studying a review book the night before
a final exam would be
a. the cost of the review book
b. missing four hours of TV
c. a higher grade on your exam
d. the knowledge gained from studying

___14. A production possibilities curve illustrates all the

a. technological changes that help increase production.
b. Prices for items
c. Economic choices a society can make
d. Combinations of two goods or services that can be produced with a given set
of resources.

___15. If an important resource, such as oil, becomes unavailable, the production

possibilities curve will shift
a. to the right c. upward
b. to the left d. downward

Part III- Graph Analysis

1. What are the PRODUCTION POSSIBILITIES for milk and missiles at POINT
A?
a. Milk-

b. Missiles-

2. What is the OPPORTUNITY COST of increasing missile production from 10

Missiles to 20 Missiles? Express in GALLONS.

3. In general terms, explain the trade-off made when increasing the production of
milk.

4. Is POINT B a possibility? Why or why not?

5. List two factors that would cause the entire curve to shift outward or to the right?

Production Possibilities Curve