Unit 1 Quiz

Question 1

The fundamental problem of Econ

Answer 1

Scarcity - There are limited resources to meet our unlimited desires

Question 2

3 questions of econ

Answer 2

what to produce, how to produce, for whom to produce

Question 3

4factors of production

Answer 3

Land, labor, capital, entrepeneurship

Question 4

Markets

Answer 4

Factor market (productive resources) vs product market (producers sell products)

Question 5

Think like an economist

Answer 5

Evaluate at the Margin
Analyze opportunity cost and trade-offs
Look at the big picture
Make rational decisions

Question 6

What do subsidies do to the global economy

Answer 6

The subsidies that the US gives to its cotton farmers kills other countries will to produce cotton. Cotton is very expensive to produce and these subsidies keep the price reasonable for China and the other manufacturers. However, this kinda kills the other countries that produce cotton. Since cotton is so hard to produce, the price is higher and without these subsidies, poor countries have to charge more for their cotton to survive. The US government basically screws over small countries to stay on top of king cotton.