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The economic way of thinking
1) Which economic question depends on the incomes that people earn and the prices they pay for goods and services?
A) What?
B) How?
C) For whom?
D) Why?
E) Where?
2) Computers and insurance coverage produced in the United States and sold to people in other nations are categorized as
A) U.S. consumption goods and services.
B) foreign capital goods.
C) U.S. government goods and services.
D) U.S. exports of goods and services.
E) U.S. imports of goods and services.
3) Economists classify energy and water as part of which factor of production?
A) land
B) labor
C) capital
D) entrepreneurship
E) land if undeveloped and capital if developed
4) A circular flow model shows the interrelationship between the ________ market and the
________ markets.
A) household; goods
B) household; factor
C) business; household
D) expenditure; income
E) goods; factor
The economic problem
1) The production possibilities frontier illustrates the
A) maximum combinations of goods and services that can be produced.
B) resources the economy possess, but not its level of technology.
C) goods and services that people want.
D) limits to people's wants.
E) amount of each good that people want to buy.
2) The production possibilities frontier is the