1. The main idea of this chapter is that (a) only poor people and governments must make economic choices (b) all people, businesses, and governments must make choices (c) it is easy to make economic choices (d) it does not cost anything to make a choice. 2. Which one of the following is an example of an economic good? (a) visit to a dentist (b) pair of sneakers (c) lesson taught by your teacher (d) ride on a bus.

3. Which one of the following is an example of an economic service? (a) haircut (b) camcorder (c) DVD (d) pair of scissors.

4. Which one of the following is an example of a consumer? (a) doctor treating a patient (b) recording artist (c) person buying a pair of jeans (d) worker in an auto plant.

5. Which one of the following groups of names contains only capital resources? (a) trees, water, iron ore (b) workers, business owners, managers (c) machines, tools, factories (d) nature, people, services.

6. A good or service has value because it (a) costs money (b) satisfies a human want or need (c) is sold in stores (d) is abundant in nature.

7. The reason scarcity exists is that (a) people want more goods and services than can be produced (b) some people are wealthy while others are poor (c) there is plenty of everything for everyone (d) individuals and governments do not make the right choices.
8. What is the opportunity cost to a nation that chooses to spend an- other $1 billion on a defense project rather than on an education program? (a) $2 billion (b) the cost of the defense project (c) the $1 billion education program (d) no cost.

9. Suppose that you are given a problem to solve and four ways to solve your problem. Which one of the following choices is an exam- ple of critical thinking? (a) Doing what your “gut feeling” tells you is best. (b) Doing whatever your friends do. (c) Checking your facts and alternatives before making a decision. (d) Getting as many opinions as possible and choosing whatever the majority has selected.

10. Which is the best example of someone deciding how to use a factor of production? (a) a boy deciding which phone to purchase (b) a girl deciding which movie to watch (c) a man deciding which car to rent (d) a baker deciding which bread recipe to use.