ECONOMICS TODAY THE MICRO VIEW
CERTIFICATION TEST PAPER VERIFIED
QUESTIONS AND SOLUTIONS GRADED A+
●● Resources
Answer: Called factors of production, these are commonly grouped into
the four categories of labor, physical capital, land or natural resources,
and entrepreneurial ability.
●● Scarcity
Answer: The imbalance between limited productive resources and
unlimited human wants. Because economic resources are scarce, the
goods and services a society can produce are also scarce.
●● Trade-offs
Answer: Scarce resources imply that individuals, firms, and
governments are constantly faced with difficult choices that involve
benefits and costs.
●● Opportunity cost
Answer: The value of the sacrifice made to pursue a course of action.
●● cost-benefit analysis
, Answer: the process of weighing all of the costs of an action against all
of the benefits of that action.
●● Total cost
Answer: the sum of the explicit and implicit costs of an action, or
decision, being considered.
●● Explicit cost
Answer: the out-of-pocket costs of an action being considered.
●● Implicit cost
Answer: the cost of an action being considered, measured by the value
of the next best forgone alternative.
●● Total benefit
Answer: the sum of all expected enjoyment, as measured by willingness
to pay, of an action being considered.
●● Marginal
Answer: The next unit or increment of an action.
●● marginal social benefit
CERTIFICATION TEST PAPER VERIFIED
QUESTIONS AND SOLUTIONS GRADED A+
●● Resources
Answer: Called factors of production, these are commonly grouped into
the four categories of labor, physical capital, land or natural resources,
and entrepreneurial ability.
●● Scarcity
Answer: The imbalance between limited productive resources and
unlimited human wants. Because economic resources are scarce, the
goods and services a society can produce are also scarce.
●● Trade-offs
Answer: Scarce resources imply that individuals, firms, and
governments are constantly faced with difficult choices that involve
benefits and costs.
●● Opportunity cost
Answer: The value of the sacrifice made to pursue a course of action.
●● cost-benefit analysis
, Answer: the process of weighing all of the costs of an action against all
of the benefits of that action.
●● Total cost
Answer: the sum of the explicit and implicit costs of an action, or
decision, being considered.
●● Explicit cost
Answer: the out-of-pocket costs of an action being considered.
●● Implicit cost
Answer: the cost of an action being considered, measured by the value
of the next best forgone alternative.
●● Total benefit
Answer: the sum of all expected enjoyment, as measured by willingness
to pay, of an action being considered.
●● Marginal
Answer: The next unit or increment of an action.
●● marginal social benefit
