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Economics test # 1
What is the definition of an economic system?
What is a trade off?
Economics test # 1
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Ms. Barrilleaux
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Answers
1
What is a trade off?
Giving up one alternative good or service for another.
When the opportunity cost outweighs the other option.
When you trade pokemon cards
2
What is the definition of an economic system?
A system in which the people have all of the power.
A way of producing things the people need and want.
3
What is total cost?
marginal cost + marginal revenue
fixed cost + opportunity cost
Variable cost + fixed cost
Variable cost + opportunity cost
4
Which of the following regulates the economic market & influences the price of goods?
Monetary policy
Supply & Demand
Anti trust policy
Substitution and consumption
5
What is true about a command economy?
the three economic questions are answered on the habit of custom/tradition
Government planners command the actions that the producers must follow.
They answer the three economic questions on the basis of profit and price.
The gov. makes all economic decisions.
6
If the price of a good or service increases the demand will decrease.
False
True
7
Who are consumers?
People or businesses that provide/sell the goods and services.
People who buy the goods and services.
8
What is economics?
How ppl choose to use their lmtd resources to satisfy their unlmtd wants.
How ppl choose to use their unlmtd resources to satisfy their lmtd wants.
Confusing
9
Who are producers?
People who buy the goods and services.
People or businesses that provide/sell the goods and services.
10
What is variable cost?
Variable cost + total cost
An expense that does not change no matter how much the business produces.
an expense that changes depending on how much a business produces.
marginal cost + marginal revenue
11
Which of the following would be an example of human capital?
A sewing machine that was used to make clothes.
The equipment used by the doctor to heal patients.
A taxi driver's knowledge of of the city streets.
12
If resources are limited & wants are unlimited we have to...
Steal things.... -.-
Make a choice
13
Choosing to buy a DVD player instead of something else is an example of...
Scarcity
Total cost
Trade off
Marginal cost
14
Scarcity occurs whenever we do not have enough resources to produce all of the things we would like to have.
False
True
15
What is the definition of want?
limited desires that ppl have & can be met by getting a good or a service
Unlimited desires that ppl have & can be met by getting a good or a service
Things that cannot be made to use good or services.
Things that can be made to use goods or services.
16
What are natural resources?
People who produce goods and services.
Money, products and supplies used in the production of goods & services.
Raw materials supplied by nature.
17
Scarcity is the basic economic problem because...
All resources are limited, but wants are not.
People face shortages on a seasonal basis.
All expensive goods cannot be shared equally.
Nations must spend $ for resources they do not have.
18
service is work that is done for us.
True
False
19
What is true in a traditional economy?
They are not likely to change over time.
They will sell what they produce and use the money to buy things they want.
the three economic questions are answered on the habit of custom/tradition
Government planners command the actions that the producers must follow.
20
Demand is the desire people have for a good or service.
False
True
21
A surplus of an item usually means that..
suppliers cannot meet the demand.
The market is at equilibrium.
The price is too high.
Government price controls are needed.
22
What is capital resource?
People who produce goods and services.
Raw materials supplied by nature.
Money, products and supplies used in the production of goods & services.
23
The loss of four years of income resulting from the decision to go to college is..
Opportunity cost
Fixed cost
Marginal cost
Total cost
24
What two categories do wants fall under?
Unlimited resources & limited wants
Limited resources & scarcity
Goods & Services
25
What is fixed cost?
Variable cost + total cost
marginal cost + marginal revenue
An expense that does not change no matter how much the business produces.
an expense that changes depending on how much a business produces.
26
Which type of economy does the United States have?
Command economy
Traditional economy
Mixed market economy
Market economy
27
What is revenue?
The total cost of an increase in productivity.
The $ a business receives from selling goods and services.
The fixed cost + variabale cost
28
What is true about a market economy?
the three economic questions are answered on the habit of custom/tradition
Each business makes decisions based on a desire to find the most profit.
They answer the three economic questions on the basis of profit and price.
Government planners command the actions that the producers must follow.
29
What is a market?
a place where buyers and sellers of the same good or service come together.
the amount of a good or service that producers are willing to sell
Where the piggies go.
30
What are resources?
Things that can be used to make goods or services.
Unlimited
Limited
31
What is true about a traditional economy?
A lot of innovation usually takes place in a traditional economy.
The government controls every aspect of the economy.
Children tend to have the same jobs as their parents did.
They have a high standard of living.
32
What is supply?
the amount of a good or service that producers are willing to sell.
the amount of a good or service that producers are willing to sell.
All of the above.
the amount of a good or service that producers are willing to sell.
33
What is human resource?
People who produce goods and services.
Raw materials supplied by nature.
Money, products and supplies used in the production of goods & services.
34
Goods are things that we can touch or hold.
False
True
35
What is the basic principle of law of demand?
The higher the price the more ppl will want the good.
The lower the price the more ppl will buy the good.
Services are of interest in the same way that goods are.
Everyone has a limited income they will spend.
36
Which of the following are examples of fixed costs?
Electric bill
Rent
$ spent on supplies
Salary
37
What will cause the supply of the product to decrease?
A decrease in price of resources used to make the product.
An increase in the # of suppliers.
A decrease in consumer demand.
An increase in the # of consumers.
38
The four parts of demand are....
Able to buy
price
amount
willing to buy
39
What are the three types of resources?
Capital, goods, and services
Natural, capital, and water
Natural, human, and capital
Unlimited, limited, and scarce
40
Where does supply & demand come from?
Straight from God Himself.
Your mom
Producers and consumers
41
What are characteristics of a command economy?
Each person decides where he/she wants to work.
The central gov. makes all economic decisions.
The central gov. owns all land and capital.
The central gov. sets prices on most goods and services.
42
Opportunity cost is the cost of the next best use of time or $ when choosing to do one thing or another.
False
True
43
When buyers will purchase exactly as much as sellers are willing to sell, what is this condition called?
Price floor
Supply & Demand
Excess demand
Equilibrium
44
Which of the following countries has a command economy?
Mexico
Cuba
Japan
North Korea
45
What is competition?
Being neutral.
a struggle among sellers to attract buyers, this keeps the price of a good
Not caring if you win or lose.
at a certain price. :0
