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5 Written questions

5 Matching questions

  1. marginal benefit (MB)
  2. free enterprise
  3. opportunity cost
  4. marginal
  5. economics
  1. a the best alternative that we forgo, or give up, when we make a choice or a decision
  2. b the next unit or increment of an action
  3. c under a free market system, individual producers must figure out how to plan, organize, and coordinate the production of products and services
  4. d the study of how individuals, firms, and societies choose to use their scarce resources to provide for their unlimited material wants
  5. e the additional benefit received from the consumption of the next unit of a good or service

5 Multiple choice questions

  1. the process of using resources to produce new capital
  2. principle that irrelevant detail should be cut away
  3. goods produced for present consumption
  4. factors of production - include labor, physical capital, land or natural resources, and entrepreneurial ability
  5. the process by which resources are transformed into useful forms

5 True/False questions

  1. production possibilitiesdifferent quantities of goods that an economy can produce with a given amount of scarce resources


  2. trade-offsscarce resources imply that individuals, firms, and governments are constantly faced with difficult choices that involve benefits and costs


  3. productive efficiencyproduction of the combination of goods and services that provides the most net benefit to society. the optimal quantity of a good is achieved when MB=MC of the next unit. This only occurs at one point on the PPF


  4. normative economicsstudies economic behavior without making judgements--describes what exists and how it works


  5. equityfairness of economic outcomes