Test: Introduction To Economics! Trivia Quiz
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Questions and Answers
- 1.
Classification of wealth. (Three types of wealth)
Explanation
This question is asking for the classification of wealth into three types. The correct answer is private, social, and national. Private wealth refers to the assets owned by individuals or households, such as money, property, or investments. Social wealth refers to the collective assets owned by society as a whole, including public infrastructure, natural resources, and cultural heritage. National wealth refers to the total wealth of a country, including both private and social wealth.Rate this question:
- 2.
The individual's total personal income.
Explanation
Gross refers to the total amount of income earned by an individual before any deductions or taxes are taken out. It represents the individual's total personal income, including wages, salaries, bonuses, tips, and any other sources of income. Gross income is an important measure as it provides a clear picture of the individual's earning capacity and is used to calculate various taxes and deductions.Rate this question:
- 3.
This is the cost of producing one additional unit of an item.
Explanation
The correct answer is "marginal cost." Marginal cost refers to the additional cost incurred in producing one more unit of a product. It includes the cost of additional resources, labor, and materials required to produce the extra unit. By calculating the marginal cost, businesses can determine the optimal production level to maximize their profits. It is an important concept in economics and helps in decision-making processes related to production and pricing.Rate this question:
- 4.
Which of the following are referred to as a factor of production?
- A.
Health
- B.
Capital
- C.
Cost
- D.
Business
Correct Answer
B. CapitalExplanation
Capital is referred to as a factor of production. In economics, factors of production are the resources used in the production process to create goods and services. Capital refers to the physical assets, such as machinery, equipment, buildings, and tools, that are used in the production process. These assets are essential for businesses to produce goods and services efficiently and effectively. Therefore, capital is considered one of the key factors of production alongside labor, land, and entrepreneurship.Rate this question:
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- 5.
What is the reward for land as a factor of production?
- A.
Profit
- B.
Interest
- C.
Wages
- D.
Rent
Correct Answer
D. RentExplanation
The reward for land as a factor of production is rent. Rent is the payment made by individuals or businesses to the owner of land in exchange for the use of that land. It is a form of income earned by landowners for allowing others to utilize their land for various purposes such as agriculture, housing, or commercial activities. Rent is distinct from other factors of production like wages, profit, and interest, which are associated with labor, entrepreneurship, and capital respectively.Rate this question:
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- 6.
What is the reward for labor as a factor of production?
- A.
Money
- B.
Promotion
- C.
Wages
- D.
Payment
Correct Answer
C. WagesExplanation
The reward for labor as a factor of production is wages. Wages refer to the monetary compensation that a worker receives in exchange for their labor or services. It is a form of payment that employers provide to employees for their work, usually on an hourly, daily, or monthly basis. Wages serve as a means to compensate individuals for their time, effort, and skills utilized in the production of goods or services.Rate this question:
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- 7.
This is referred to as the creation of goods and services to meet the demands of the consumer.
- A.
Productivity
- B.
Production
- C.
Producers
- D.
Suppliers
Correct Answer
B. ProductionExplanation
Production refers to the process of creating goods and services to fulfill the needs and wants of consumers. It involves the transformation of inputs, such as raw materials and labor, into finished products. The focus is on the creation and delivery of goods and services that meet the demands of consumers in the market.Rate this question:
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- 8.
Which factor of production is man-made?
Correct Answer
capitalExplanation
Capital is considered a man-made factor of production. It refers to the physical tools, machinery, equipment, and infrastructure that are used in the production process. Unlike other factors of production such as land or labor, capital is not naturally occurring but is created by humans. It plays a crucial role in enhancing productivity and efficiency in the production process. Examples of capital include factories, vehicles, computers, and buildings, among others.Rate this question:
- 9.
Which terms are used in describing the optimal allocation of resources?
Correct Answer
production possibility frontier
production possibility curveExplanation
The terms "production possibility frontier" and "production possibility curve" are used to describe the optimal allocation of resources. These terms refer to graphical representations that show the different combinations of goods and services that can be produced given limited resources. They illustrate the trade-offs that occur when resources are allocated in different ways, highlighting the concept of efficiency and the need to make choices in resource allocation.Rate this question:
- 10.
Which term describes the overall cost of production?
- A.
Marginal cost
- B.
Average cost
- C.
Total cost
- D.
Variable cost
Correct Answer
C. Total costExplanation
The term "total cost" refers to the overall cost of production. It includes all the expenses incurred in producing a certain quantity of goods or services, such as raw materials, labor, overhead costs, and other fixed costs. By calculating the total cost, businesses can determine the full financial impact of their production process and make informed decisions regarding pricing, profitability, and cost management strategies.Rate this question:
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