Diaz-intro To Economics Quiz (Ch. 1)-fall 2015

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Diaz-intro To Economics Quiz (Ch. 1)-fall 2015 - Quiz

Ned: "I am so anxious about this econ quiz, I completely forgot to study"
Homer: "Are you kidding? Bring it on, I'm ready for this thing"


DIRECTIONS:
In the introductory unit of our class you have learned about the study of economics and how economics affects everyone. This quiz covers the material from Ch. 1 Sections 1-3. You may use notes but are only eligible for a C (75%) grade if you do so.
TURN IN THE CHAPTER HOMEWORK assignments AT THE END OF THE QUIZ.


Questions and Answers
  • 1. 

    Which of the following is an example of macroeconomics?

    • A.

      People in Perry prefer the Casey's on 1st street over the Casey's on Willis Ave.

    • B.

      Teenagers prefer Mountain Dew over Sprite

    • C.

      A high school senior decides to go to a public university due to the lower cost.

    • D.

      President Obama orders all schools to have a school police officer in their buildings

    Correct Answer
    D. President Obama orders all schools to have a school police officer in their buildings
    Explanation
    The correct answer is President Obama orders all schools to have a school police officer in their buildings. This is an example of macroeconomics because it involves a government policy that affects the entire economy or a large segment of it. The decision made by President Obama has a broad impact on all schools and their resources, which is a macroeconomic concern. The other options are more focused on individual preferences or decisions, which are typically considered microeconomic factors.

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  • 2. 

    Which of the following is an example of labor?

    • A.

      Robots that assemble cars

    • B.

      Delivery trucks

    • C.

      Cashiers at Fareway

    • D.

      Corn fields in Iowa

    Correct Answer
    C. Cashiers at Fareway
    Explanation
    Cashiers at Fareway are an example of labor because they involve human effort and skills in providing a service. Labor refers to the physical and mental work performed by individuals to produce goods or services. In this case, the cashiers at Fareway are using their knowledge, expertise, and physical effort to assist customers in the process of purchasing items and completing transactions.

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  • 3. 

    Human capital resources are:

    • A.

      Human made objects used to produce goods and services

    • B.

      Machine made objects used to produce goods and services

    • C.

      The knowledge and skills used to produce goods and services

    • D.

      Human made machines used to build things.

    Correct Answer
    C. The knowledge and skills used to produce goods and services
    Explanation
    Human capital resources refer to the knowledge and skills possessed by individuals that are utilized in the production of goods and services. This includes the expertise, abilities, and education that individuals bring to the workforce, which contribute to the creation and enhancement of products and services. Unlike physical resources or machines, human capital resources are intangible and can be developed and improved through education, training, and experience. These resources are essential for economic growth and productivity, as they enable individuals to perform tasks efficiently and effectively, leading to the production of high-quality goods and services.

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  • 4. 

    According to Economists, the economic problem we face is that humans have unlimited wants but limited resources, this is due to ______________

    • A.

      Scarcity in resources

    • B.

      Shortages in money

    • C.

      Too many greedy people in the world

    • D.

      Too many lazy people in the world

    Correct Answer
    A. Scarcity in resources
    Explanation
    The correct answer is scarcity in resources. According to economists, the economic problem arises because humans have unlimited wants but limited resources available to fulfill those wants. This scarcity in resources leads to competition and trade-offs, as individuals and societies have to make choices about how to allocate their limited resources to satisfy their most important needs and wants.

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  • 5. 

    The best definition of Economics is ____________________

    • A.

      The study of how people spend and save their money

    • B.

      The study of how people and societies tax and spend

    • C.

      The study of time and money

    • D.

      The study of how people and societies make decisions to try and meet their needs and wants

    Correct Answer
    D. The study of how people and societies make decisions to try and meet their needs and wants
    Explanation
    Economics is the study of how individuals and societies make choices and decisions to fulfill their needs and desires. It involves analyzing the production, distribution, and consumption of goods and services. By studying economics, we gain insights into how individuals and societies allocate their resources, such as money and time, to satisfy their unlimited wants in the face of limited resources.

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  • 6. 

    Microeconomics would be more interested in studying trade relations between China and the United States than the purchase habits of teenagers.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Microeconomics focuses on the behavior and decision-making of individuals, households, and firms in the economy. Studying trade relations between China and the United States falls under the domain of macroeconomics, which deals with the overall functioning of the economy. On the other hand, studying the purchase habits of teenagers is more relevant to microeconomics as it involves analyzing the choices and preferences of individual consumers. Therefore, the statement that microeconomics would be more interested in studying trade relations between China and the United States than the purchase habits of teenagers is false.

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  • 7. 

    The marginal benefit of consuming a pizza increases as you consume more slices of pizza.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because the marginal benefit of consuming a pizza typically decreases as you consume more slices. Initially, each additional slice of pizza provides a high level of satisfaction or utility. However, as you continue to eat more slices, the enjoyment or benefit derived from each additional slice tends to diminish. This concept is known as diminishing marginal utility, which suggests that the more you consume of a particular good, the less satisfaction you derive from each additional unit.

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  • 8. 

    Which of the following happens to a production possibility frontier (curve) when new technology is introduced that leads to economic growth?

    • A.

      The curve shifts to the left

    • B.

      The curve becomes a straight line

    • C.

      The curve shifts to the right

    • D.

      The curve does not shift, the growth is shown by a point on the curve.

    Correct Answer
    C. The curve shifts to the right
    Explanation
    When new technology is introduced that leads to economic growth, the production possibility frontier (curve) shifts to the right. This means that the economy is now capable of producing more goods and services than before, indicating an increase in its productive capacity. The shift to the right represents the expansion of possibilities and the ability to achieve higher levels of output.

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  • 9. 

    A leader who combines the factors of production to make goods and services is called?

    • A.

      Executive

    • B.

      Entrepreneur

    • C.

      Manager

    • D.

      Wealth Manager

    Correct Answer
    B. Entrepreneur
    Explanation
    An entrepreneur is a leader who combines the factors of production to make goods and services. They are responsible for identifying opportunities, taking risks, and organizing resources to create and run a business. Entrepreneurs play a crucial role in driving innovation, creating jobs, and contributing to economic growth. They are distinct from executives, managers, and wealth managers, as their primary focus is on starting and managing their own ventures rather than working within existing organizations.

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  • 10. 

     Jamestown Colony The following reading questions are practice for the Iowa Assessments.  Read the questions at the bottom first and then read the selection.  In 1612, John Rolfe began growing tobacco in Jamestown from seeds he obtained from the Spanish colonies.  Rolfe acquired the seeds despite the Spaniards’ threat of death to anyone selling tobacco seeds to anyone selling tobacco seeds to a non-Spaniard.  The local Native Americans may have aided Rolfe’s acquisition of the seeds, as he was engaged to marry the chief’s daughter, Pocahontas.  By 1614, the first tobacco from Virginia was sold in London, England.  Despite the disapproval of King James I, this “stinking weed” came into high demand in England and throughout Europe.  This led tobacco to become an incredibly profitable crop for Virginian farmers.  For England, tobacco became an ideal product.  It was easy to ship and cheap to produce.  By 1639, at least 750 tons of Virginia tobacco had been shipped to England.   Eventually, England did not allow Virginia tobacco to be shipped or sold anywhere but back to England.   With tobacco as the main crop, the Virginia colony had the foundation for its economic success. Which of the following factors of production did Rolfe obtain to help start his tobacco farming?

    • A.

      Physcial Capital

    • B.

      Labor

    • C.

      Land

    • D.

      Human Capital

    Correct Answer
    C. Land
    Explanation
    John Rolfe obtained land to help start his tobacco farming.

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  • 11. 

     Jamestown Colony In 1612, John Rolfe began growing tobacco in Jamestown from seeds he obtained from the Spanish colonies.  Rolfe acquired the seeds despite the Spaniards’ threat of death to anyone selling tobacco seeds to anyone selling tobacco seeds to a non-Spaniard.  The local Native Americans may have aided Rolfe’s acquisition of the seeds, as he was engaged to marry the chief’s daughter, Pocahontas.  By 1614, the first tobacco from Virginia was sold in London, England.  Despite the disapproval of King James I, this “stinking weed” came into high demand in England and throughout Europe.  This led tobacco to become an incredibly profitable crop for Virginian farmers.  For England, tobacco became an ideal product.  It was easy to ship and cheap to produce.  By 1639, at least 750 tons of Virginia tobacco had been shipped to England.   Eventually, England did not allow Virginia tobacco to be shipped or sold anywhere but back to England.   With tobacco as the main crop, the Virginia colony had the foundation for its economic success. What factor of production best describes John Rolfe?

    • A.

      Specialist

    • B.

      Thief

    • C.

      Human Capitalist

    • D.

      Entrepreneur

    Correct Answer
    D. Entrepreneur
    Explanation
    John Rolfe best fits the description of an entrepreneur. He took a risk by growing tobacco in Jamestown despite the threat of death from the Spaniards. He obtained tobacco seeds and started selling the first tobacco from Virginia in London, which eventually became a highly profitable crop. Rolfe's actions demonstrate his ability to identify and seize opportunities, take risks, and create a successful business venture.

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  • 12. 

     With the success of tobacco, the demand for labor in the colony increased.  Labor was first supplied by indentured servants, who sold their labor for passage to Virginia, food, clothing, and other necessities- but no money.  After filling the terms of the contract, usually three to seven years, the indentured servant would be given land, tools, and perhaps a small amount of money.  A 20 percent death rate on the voyage over, and further exposure to hard work and disease, made it difficult to recruit indentured laborers.  Eventually, farmers turned to slaves to fill their jobs.  Although more expensive up-front, slaves were cheaper form of labor in the long run as their work was bought for life.  Tobacco was profitable on any size of farm.  Although crops other than tobacco, such as wheat, could be grown in the South, the opportunity cost was high.  By specializing in growing tobacco, a farmer could maximize his profits over what could be made from growing other crops.  One drawback was that the soil on tobacco farms was worn out every four to seven years.  For this reason, tobacco farming favored large scale farmers.  With this success, Virginia’s comparative advantage lay in growing tobacco.  Why did tobacco farmers choose to use slaves instead of indentured servants?

    • A.

      Because it was hard to recruit indentured servants to work on farms

    • B.

      Because indentured servants worked for free for only 3 to 7 years.

    • C.

      Because slaves were a cheaper form of labor

    • D.

      All options

    Correct Answer
    D. All options
    Explanation
    Tobacco farmers chose to use slaves instead of indentured servants because it was difficult to recruit indentured servants to work on farms due to a high death rate during the voyage and exposure to hard work and disease. Additionally, indentured servants only worked for free for a limited period of 3 to 7 years. Slaves, on the other hand, were a cheaper form of labor in the long run as their work was bought for life. Therefore, all the given options are correct explanations for why tobacco farmers chose to use slaves instead of indentured servants.

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  • 13. 

    Read the Homer and Ned story:Which of the following represents human capital in the story.

    • A.

      Their skills and knowledge in making beer and bread.

    • B.

      The stoves they used to cook the ingredients in.

    • C.

      The water they used to make beer and bread.

    • D.

      The barrels they used to mix the ingredients.

    Correct Answer
    A. Their skills and knowledge in making beer and bread.
    Explanation
    In the story, Homer and Ned possess skills and knowledge in making beer and bread. This represents human capital as it refers to the abilities, expertise, and knowledge that individuals possess, which can be used to produce goods or services. The stoves, water, and barrels mentioned in the other options are physical resources or inputs used in the production process, but they do not represent human capital.

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  • 14. 

    Which type of student has the lowest opportunity cost when making a decision to study for an exam?

    • A.

      A student who works full time.

    • B.

      A student involved in multiple sports and extracurricular activities

    • C.

      A student without a job.

    • D.

      All of the students have the same opportunity cost.

    Correct Answer
    C. A student without a job.
    Explanation
    A student without a job has the lowest opportunity cost when making a decision to study for an exam because they do not have any work commitments or responsibilities that would take away their time and energy from studying. On the other hand, a student who works full time would have limited time available for studying due to their work obligations. Similarly, a student involved in multiple sports and extracurricular activities would also have less time to allocate towards studying. Therefore, the student without a job has the least competing demands on their time and can dedicate more hours to studying, resulting in a lower opportunity cost.

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  • 15. 

    Which of the following is NOT a factor production

    • A.

      Land

    • B.

      Scarcity

    • C.

      Labor

    • D.

      Human Capital

    • E.

      Physical capital

    • F.

      Entrepreneur

    Correct Answer
    B. Scarcity
    Explanation
    Scarcity is not a factor of production because it refers to the limited availability of resources in relation to unlimited wants and needs. It is a concept that influences the allocation of resources, but it is not a direct factor of production like land, labor, human capital, physical capital, or entrepreneurship. The other options listed are all factors that contribute to the production of goods and services.

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  • 16. 

    The resources used to make ALL goods and services are called?

    • A.

      Land, Labor, and Money

    • B.

      Physical Capital, Human Capital, and Land

    • C.

      Economic resources

    • D.

      Factors of production

    Correct Answer
    D. Factors of production
    Explanation
    Factors of production refer to the resources used in the production process of goods and services. These resources include land, labor, physical capital, human capital, and money. Each of these factors plays a crucial role in the production process. Land provides the natural resources, labor refers to the human effort and skills, physical capital includes machinery and equipment, human capital represents the knowledge and skills of individuals, and money is used to facilitate transactions and investment. Therefore, the term "factors of production" encompasses all the resources used in the production of goods and services.

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  • 17. 

    Why is it that scarcity is such an important concept in Economics?

    • A.

      Without scarcity individuals and societies would not have to make choices

    • B.

      Scarcity forces people to pay taxes for the goods they buy

    • C.

      Opportunity costs only exist when their is no scarcity present

    • D.

      Scarcity allows people to have the best of everything.

    Correct Answer
    A. Without scarcity individuals and societies would not have to make choices
    Explanation
    Scarcity is an important concept in Economics because it necessitates individuals and societies to make choices. When resources are limited and cannot satisfy unlimited wants and needs, people are forced to prioritize and make decisions about what to produce, consume, and distribute. Scarcity creates competition and drives the allocation of resources, leading to the study of how individuals and societies make rational choices to maximize their utility or well-being. Without scarcity, there would be no need for decision-making, and the fundamental principles of Economics would not apply.

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  • 18. 

    All of the individuals in this graphic represent what factor of production? 

    • A.

      Land

    • B.

      Physical Capital

    • C.

      Entrepreneur

    • D.

      All of the options

    Correct Answer
    C. Entrepreneur
    Explanation
    The individuals in the graphic represent the factor of production known as entrepreneurs. Entrepreneurs are individuals who take risks and organize resources to create new businesses or improve existing ones. They are responsible for making decisions, managing operations, and seeking opportunities for innovation and growth. Entrepreneurs play a crucial role in driving economic development and creating wealth in a society.

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  • 19. 

    The phrase "Their is no such thing as a free lunch" implies:

    • A.

      Every decision has an opportunity cost

    • B.

      All decisions involve money

    • C.

      Opportunity costs do not matter in economics

    • D.

      The government should not provide free lunch to students

    Correct Answer
    A. Every decision has an opportunity cost
    Explanation
    The phrase "There is no such thing as a free lunch" implies that every decision has an opportunity cost. This means that when we make a choice, we must give up or sacrifice something else in return. It suggests that even if something appears to be free, there is always a cost associated with it, whether it be time, resources, or alternatives foregone. This concept is fundamental in economics and decision-making processes, as it reminds us to consider the trade-offs and consequences of our choices.

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  • 20. 

    The law of increasing costs states that the opportunity cost increases as farmers shift production from corn to wheat.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The law of increasing costs states that as farmers shift production from corn to wheat, the opportunity cost of producing wheat increases. This means that in order to produce more wheat, farmers have to give up increasing amounts of corn production. This is because resources that are well-suited for corn production may not be as well-suited for wheat production, leading to diminishing returns and higher costs. Therefore, the statement "The law of increasing costs states that the opportunity cost increases as farmers shift production from corn to wheat" is true.

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  • 21. 

    What does point H represent on this PPF?

    • A.

      Impossible production mix.

    • B.

      Efficient production mix.

    • C.

      Under-utilization production mix.

    • D.

      Maximum potential mix

    Correct Answer
    A. Impossible production mix.
    Explanation
    Point H represents an impossible production mix on the PPF. This means that it is not feasible to produce the combination of goods represented by point H given the available resources and technology. The PPF shows the maximum potential production combinations, and point H falls outside of this boundary, indicating that it is not achievable.

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  • 22. 

    Which of the following would NOT cause the PPF to move towards point I?

    • A.

      A shortage in oi around the world.

    • B.

      A flood affecting the United States.

    • C.

      Improvement in technology.

    • D.

      All options

    Correct Answer
    C. Improvement in technology.
    Explanation
    An improvement in technology would not cause the PPF (Production Possibility Frontier) to move towards point I because technological advancements increase the efficiency and productivity of resources, allowing for a greater production capacity. As a result, the PPF would shift outward, indicating an increase in the potential output of goods and services. Moving towards point I on the PPF would imply a decrease in production due to constraints or limitations, which is not caused by an improvement in technology.

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  • 23. 

    Imagine that Homer and Bart are stranded on an island together and they each produce two items use the PPF above to answer the following questions. Homer's PPF is A and Bart's is B.What is the opportunity cost of Bart producing 8 fish?

    • A.

      8 Fish

    • B.

      4 Coconuts

    • C.

      2 Coconuts

    • D.

      10 coconuts

    Correct Answer
    B. 4 Coconuts
    Explanation
    The opportunity cost of Bart producing 8 fish is 4 coconuts. This means that in order for Bart to produce 8 fish, he would have to give up producing 4 coconuts. The PPF (Production Possibility Frontier) shows the trade-off between producing fish and producing coconuts, and in this case, the trade-off is 4 coconuts for 8 fish.

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  • 24. 

    A John Deere combine (pictured) is an example of which factor of production?

    • A.

      Entrepreneur

    • B.

      Physical capital

    • C.

      Human capital

    • D.

      Land

    Correct Answer
    B. Physical capital
    Explanation
    The John Deere combine is an example of physical capital because it is a tangible asset used in the production process. Physical capital refers to the tools, machinery, equipment, and infrastructure that are used to produce goods and services. In this case, the combine is a piece of machinery that is used in agricultural production to harvest crops.

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  • 25. 

    A student in the DMACC welding is an example of which factor of production?

    • A.

      Human capital

    • B.

      Physical capital

    • C.

      Labor

    • D.

      Land

    Correct Answer
    A. Human capital
    Explanation
    A student in the DMACC welding program represents human capital because they are acquiring knowledge and skills in the field of welding, which can be considered an investment in their own abilities and productivity. Human capital refers to the skills, knowledge, and expertise that individuals possess, which can contribute to their productivity and economic value. In this case, the student's education and training in welding are examples of human capital.

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  • 26. 

    What is the purpose of a cost benefit analysis?

    • A.

      It allows individuals and organizations to make good decisions.

    • B.

      It allows countries to increase a PPF.

    • C.

      It helps countries increase their factors of production.

    • D.

      None of the options

    Correct Answer
    A. It allows individuals and organizations to make good decisions.
    Explanation
    A cost benefit analysis is a tool used to evaluate the potential costs and benefits of a decision or project. By comparing the costs involved with the expected benefits, individuals and organizations can make informed decisions about whether to proceed with the project or not. This analysis helps in assessing the financial viability and potential risks associated with the decision, enabling individuals and organizations to make good decisions that align with their goals and objectives.

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  • 27. 

    "A new study shows that eating at McDonald's is linked to divorce." If you saw that headline on a newspaper or website, what would you think? 

    • A.

      think this article shows correlation between margarine and divorce

    • B.

      This article shows causality between margarine and divorce

    Correct Answer
    A. think this article shows correlation between margarine and divorce
    Explanation
    The given answer is incorrect because the question is about the link between eating at McDonald's and divorce, not margarine and divorce. Therefore, the answer does not accurately address the information provided in the question.

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  • 28. 

    What factor of production are fishing waters considered?

    • A.

      Land

    • B.

      Labor

    • C.

      Human Capital

    • D.

      Physical capital

    Correct Answer
    A. Land
    Explanation
    Fishing waters are considered as a factor of production under the category of land. Land refers to natural resources such as water bodies, forests, and agricultural land that are used in the production process. Fishing waters specifically fall under this category as they are a natural resource that is utilized for fishing activities and contribute to the overall production of fish and seafood.

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  • 29. 

    At which point on the PPF is the country using their resources efficiently?

    • A.

      A

    • B.

      G

    • C.

      E

    • D.

      All options

    Correct Answer
    D. All options
    Explanation
    The country is using its resources efficiently at all points on the PPF. This means that the country is maximizing its production and not wasting any resources. At each point, the country is producing the maximum amount of goods and services that it can with the given resources and technology. Therefore, all options (A, G, and E) represent points on the PPF where the country is using its resources efficiently.

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  • 30. 

    Your decision of coming to school or not is an example of what type of economic decision?

    • A.

      Microeconomic

    • B.

      Macroeconomic

    Correct Answer
    A. Microeconomic
    Explanation
    The decision of whether or not to go to school is an example of a microeconomic decision because it pertains to an individual's personal choices and preferences. Microeconomics focuses on the behavior and decision-making of individuals, households, and firms, rather than the overall economy. This decision involves weighing the costs and benefits of attending school, such as the potential for education and future opportunities, against other factors like time, effort, and personal priorities.

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  • 31. 

    "There is no such thing as a free lunch"

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement "There is no such thing as a free lunch" means that everything in life comes with a cost or trade-off. It suggests that even if something appears to be free, there is always some hidden cost or consequence associated with it. This concept is often used to emphasize the idea that nothing is truly free and that everything has a price. Therefore, the correct answer is true.

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  • 32. 

    Read the Homer and Ned Story:Which of the following represents physical capital as the factor of production when producing beer and bread?

    • A.

      Homer

    • B.

      Ovens

    • C.

      Grain

    • D.

      Fruits

    Correct Answer
    B. Ovens
    Explanation
    The correct answer is ovens because ovens are a form of physical capital that is used in the production of beer and bread. Ovens are necessary for baking the bread and for the fermentation process in brewing beer. Without ovens, it would not be possible to produce these goods efficiently. Grain and fruits, on the other hand, are inputs or raw materials used in the production process, but they do not represent physical capital.

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  • 33. 

    Read the Homer and Ned story:Which of the following represents human capital in the story.

    • A.

      Their skills and knowledge in making beer and bread.

    • B.

      The stoves they used to cook the ingredients in.

    • C.

      The water they used to make beer and bread.

    • D.

      The barrels they used to mix the ingredients.

    Correct Answer
    A. Their skills and knowledge in making beer and bread.
    Explanation
    In the story, Homer and Ned are depicted as having skills and knowledge in making beer and bread. This represents human capital, which refers to the skills, knowledge, and abilities possessed by individuals that contribute to their productivity and economic value. The stoves, water, and barrels mentioned in the other options are physical capital or resources used in the production process, but they do not represent the human capital of Homer and Ned.

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  • 34. 

    If something is proven to be a cause and effect relationship then it said to have causality.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Causality refers to a relationship where one event, the cause, leads to the occurrence of another event, the effect. If something is proven to have a cause and effect relationship, it means that causality exists between them. Therefore, the statement "If something is proven to be a cause and effect relationship then it said to have causality" is true.

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  • 35. 

    If the opportunity cost of a decision is higher than the marginal benefit then a person should not make that decision.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    If the opportunity cost of a decision is higher than the marginal benefit, it means that the person will have to give up more valuable alternatives in order to pursue that decision. In this case, it would not be rational to make that decision because the person would be sacrificing more than what they would gain from it. Therefore, it is true that if the opportunity cost is higher than the marginal benefit, a person should not make that decision.

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  • 36. 

    Imagine that Homer and Bart are stranded on an island together and they each produce two items use the PPF above to answer the following questions. Homer's PPF is A and Bart's is B.How many fish can Homer produce if he produces 6 coconuts? 

    • A.

      8 Fish

    • B.

      4 fish

    • C.

      2 fish

    • D.

      0 fish

    Correct Answer
    B. 4 fish
    Explanation
    Based on the given PPF (Production Possibility Frontier), if Homer produces 6 coconuts, he can produce 4 fish. This can be determined by looking at the point on Homer's PPF where the coconut production is 6, and then finding the corresponding fish production.

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  • 37. 

    The following is a transcript of an audio story.  You can read the transcript or listen to the audio in class.   Answer the following question:What factor of production is Greece losing?Now to Greece, where the economy, you might remember, was in the news nearly every day last summer, though over the last few months - not so much. So Jacob Goldstein from our PLANET MONEY team checked in with a Greek businessman he spoke with at the height of the crisis and got an update that took him by surprise.JACOB GOLDSTEIN, BYLINE: When I talked to Miltiades Gkouzouris last summer, he told me he was keeping his car full of gas at all times. That way, he said, if the country collapsed completely - no food left on the grocery store shelves, chaos in the streets - he could pack up his wife and kids and drive across the border. A few weeks after we talked, Greece worked out a deal with the rest of Europe, kept the bailout thing going, and that acute sense of crisis passed. The other day, I called Gkouzouris back, just to check in.Are you still keeping the gas tank in your car filled up?MILTIADES GKOUZOURIS: Well, actually, tomorrow I'm leaving the country permanently.GOLDSTEIN: Wait, so you're leaving Greece?GKOUZOURIS: Yes, I'm leaving Greece.GOLDSTEIN: Did you say you're leaving tomorrow?GKOUZOURIS: Yes, tomorrow. Tomorrow at around 11 o'clock, I'm on the plane on my way to the Netherlands.GOLDSTEIN: Just by coincidence, the day I called him on the phone was the day before he left Greece for good.GKOUZOURIS: Well, I'm fed up with this country. That's the reason.GOLDSTEIN: You're fed up.GKOUZOURIS: Yes. Listen, in the next year, our two little daughters will have to go to school. One of the public schools nearby our place where we live now has no teachers, so they let the cleaning lady take care of the kids. And the kids are watching television inside the school.GOLDSTEIN: This is a really clear reminder that even though Greece made that deal with Europe last year - got those bailouts - the country is still broken. And the way the EU is set up, it is really easy for Greek people to move to other EU countries, especially if they're highly-educated, highly-skilled people. Gkouzouris went to school in the Netherlands. He speaks multiple languages, and he runs a consulting company that already does a big chunk of its business outside Greece. Of course, that doesn't mean leaving is emotionally easy.GKOUZOURIS: My mother was crying today. My mother was crying on the phone. She said, my son, you're leaving again? I said, mom, it's for the sake of our children. We need to provide them a much better future than this one. She understands that. Still, it's painful.GOLDSTEIN: Lots of Greek professionals are doing exactly what Gkouzouris is doing - they're leaving Greece for EU countries with stronger economies, which makes sense. But this is really bad news for Greece. The loss of all these highly-skilled workers will make it even harder for Greece to rebuild its economy. Jacob Goldstein, NPR News. 

    • A.

      Human capital

    • B.

      Physical capital

    • C.

      Land

    • D.

      Entrepreneurs

    Correct Answer
    A. Human capital
    Explanation
    The correct answer is human capital. The passage discusses how highly-educated and highly-skilled Greek professionals are leaving the country for EU countries with stronger economies. This loss of highly-skilled workers will make it even more difficult for Greece to rebuild its economy.

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  • 38. 

    The following is a transcript of an audio story.  You can read the transcript or listen to the audio in class.   Answer the following question:Is this a micro economic or macro economic story?Now to Greece, where the economy, you might remember, was in the news nearly every day last summer, though over the last few months - not so much. So Jacob Goldstein from our PLANET MONEY team checked in with a Greek businessman he spoke with at the height of the crisis and got an update that took him by surprise.JACOB GOLDSTEIN, BYLINE: When I talked to Miltiades Gkouzouris last summer, he told me he was keeping his car full of gas at all times. That way, he said, if the country collapsed completely - no food left on the grocery store shelves, chaos in the streets - he could pack up his wife and kids and drive across the border. A few weeks after we talked, Greece worked out a deal with the rest of Europe, kept the bailout thing going, and that acute sense of crisis passed. The other day, I called Gkouzouris back, just to check in.Are you still keeping the gas tank in your car filled up?MILTIADES GKOUZOURIS: Well, actually, tomorrow I'm leaving the country permanently.GOLDSTEIN: Wait, so you're leaving Greece?GKOUZOURIS: Yes, I'm leaving Greece.GOLDSTEIN: Did you say you're leaving tomorrow?GKOUZOURIS: Yes, tomorrow. Tomorrow at around 11 o'clock, I'm on the plane on my way to the Netherlands.GOLDSTEIN: Just by coincidence, the day I called him on the phone was the day before he left Greece for good.GKOUZOURIS: Well, I'm fed up with this country. That's the reason.GOLDSTEIN: You're fed up.GKOUZOURIS: Yes. Listen, in the next year, our two little daughters will have to go to school. One of the public schools nearby our place where we live now has no teachers, so they let the cleaning lady take care of the kids. And the kids are watching television inside the school.GOLDSTEIN: This is a really clear reminder that even though Greece made that deal with Europe last year - got those bailouts - the country is still broken. And the way the EU is set up, it is really easy for Greek people to move to other EU countries, especially if they're highly-educated, highly-skilled people. Gkouzouris went to school in the Netherlands. He speaks multiple languages, and he runs a consulting company that already does a big chunk of its business outside Greece. Of course, that doesn't mean leaving is emotionally easy.GKOUZOURIS: My mother was crying today. My mother was crying on the phone. She said, my son, you're leaving again? I said, mom, it's for the sake of our children. We need to provide them a much better future than this one. She understands that. Still, it's painful.GOLDSTEIN: Lots of Greek professionals are doing exactly what Gkouzouris is doing - they're leaving Greece for EU countries with stronger economies, which makes sense. But this is really bad news for Greece. The loss of all these highly-skilled workers will make it even harder for Greece to rebuild its economy. Jacob Goldstein, NPR News. 

    • A.

      Macro economic

    • B.

      Micro Economic

    • C.

      Both

    • D.

      Neither

    Correct Answer
    C. Both
    Explanation
    The story can be classified as both microeconomic and macroeconomic because it discusses the individual decision of Miltiades Gkouzouris to leave Greece, which is a microeconomic concept. It also highlights the broader impact of Greek professionals leaving the country on Greece's economy, which is a macroeconomic concept.

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