SOLVED

1.5  A Preview of Important Economic Terms 1) Which of the following statements is true about profit? A) Profit refers to the revenue received from the sale of a quantity of goods. B) Profit is calculated by multiplying price and quantity sold. C) The terms “accounting profit” and “economic profit” can be used interchangeably. D) Profit is the difference between revenue and cost. 2) In economics, the accumulated skills and training that workers have is known as A) human capital. B) entrepreneurship. C) physical capital. D) innovation. 3) Which of the following is an example of an activity undertaken by an entrepreneur? A) designing your landscaping for your new home B) holding a position as the president of a liberal arts college C) running for the president of the United States D) starting your own pet sitting business 4) The machines workers have to work with are considered A) human capital. B) physical capital. C) entrepreneurship. D) financial capital. 5) Technology is defined as A) the process of developing and revising models. B) new innovations and creations. C) the processes used to produce goods and services. D) the process of recycling products. 6) Which of the following statements about economic resources is true? A) Economic resources include financial capital and money. B) Economic resources are also called factors of production. C) Economic resources are used only by businesses. D) All economic resources are man-made. 7) The U.S. Health Resources and Services Administration (HRSA) forecasts that in 2020 A) there will be a shortage of doctors in the United States. B) the number of doctors in the United States will decrease and the number of doctors needed will increase. C) the number of doctors in the United States will increase and the number of doctors needed will decrease. D) there will be a surplus of doctors in the United States. 8) According to census figures, between 1970 and 2007 the number of doctors who described themselves as self-employed A) fell by more than 50 percent. B) more than doubled. C) has remained fairly constant. D) fell to almost zero before rising back to its original level. 9) In the market for factors of production, firms earn income by selling goods and services to households. 10) One example of human capital is the amount of skills that you have. 11) List the five main factors of production. 12) What is the difference between an invention and an innovation? 13) Explain the difference between a firm’s revenue and its profit. 14) What are some of the reasons given for the the decline in the number of physicians choosing to enter private practices?