Civics Test 1.1

Question 1

What is economics?

Answer 1

The study of how individuals and societies satisfy their unlimited wants and limited resources.

Question 2

What is the difference between a need and a want?

Answer 2

Needs are essential for survival, however wants are desires.

Question 3

What is the difference between a good and a service?

Answer 3

Goods are physical products businesses produce, however services are activities that are preformed to satisfy peoples wants or needs.

Question 4

What are the four factors of production? Briefly describe each one.

Answer 4

Human-workers, includes time effort, and talent that goes into making the products

Capital-made and used by people to distribute good and services, includes tools, machinery, offices,roads, etc.

Natural-found on or underground, includes water,forests, wildlife, gas, etc.

Entrepreneurs-combination of vision, skill, ingenuity and willingness, to create and run new businesses

Question 5

What is the difference between a producer and a consumer?

Answer 5

The producer is who makes goods or provides services however, consumers are who purchases goods or services for personal use.

Question 6

What does it take to be a successful entrepreneur?

Answer 6

A combination of vision, skill, ingenuity and willingness

Question 7

What is scarcity? What three questions must societies ask when faced with scarcity?

Answer 7

Scarcity is the result of an inability to satisfy unlimited wants with limited resources, what will be produced, how will it be produced, for whom will it be produced.

Question 8

What are the five steps in the PACED Decision Making Model?

Answer 8

Problem
Alternatives
Criteria
Evaluate
Decision

Question 9

What is an opportunity cost?

Answer 9

The best alternative given up when making a choice

Question 10

What are trade-offs? What are incentives?

Answer 10

A trade off is: a choice that involves giving up some of one thing to have more of another

Incentives: the reasons for increasing profit, interest, wages,and rent

Question 11

What is the Production Possibilities Curve?

a. What does a point on the curve represent?
b. What does a point inside the curve represent?
c. What does a point outside the curve represent?

Answer 11

Graph that shows the impact of scarcity on an economy, a point on the curve represents the must efficient use of resources, a point inside the curve means I can’t happen but it’s not the must effective, a point outside the curve is not possible