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AICE Econ Unit 1 Flashcards | StudBud
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AICE Econ Unit 1
AICE Econ Unit 1
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Questions
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Answers
1
The curved line running through points B, D, and C is the
Law of Diminishing Returns
Production Possibility Frontier
Trade-Off Curve
Margin of Production
2
The limited nature of society's resources.
Wants vs. Needs
Voluntary Exchange
Specialization
Scarcity
3
The methods societies use to produce and distribute resources.
Free Market Economy
Command Economy
Traditional Economy
Economic Systems
4
In which system do firms, consumers, and government answer the key econonomic questions?
Command
Mixed Market
Traditional
Free Market
5
In which type of economic system is consumer sovereignty most valued?
Mixed Market
Traditional
Free Market
Command
6
This type of economy is the most susceptible to natural disasters.
Free Market
Command
Mixed
Traditional
7
What would happen to the curved line if new technology made production more efficient?
It would shift right.
It would shift left.
It would straighten out.
It would explode.
8
Which economic system most values the goal of freedom?
Command
Mixed Market
Free Market
Traditional
9
An economic system in which resources are primarily owned and controlled by the private sector.
Traditional
Free Market
Mixed Market
Command
10
Which type of market does this circular model represent?
Command
Mixed
Traditional
Free Market
11
What is a true statement about scarcity?
Overproduction will inevitably lead to scarcity.
All things are scarce except for our wants and needs.
Scarcity is a result of producing too little.
Scarcity is finite
12
An economy consisting of mostly subsistence agriculture.
Command
Mixed Market
Traditional
Free Market
13
Wages, salaries, benefits, and goods and services are part of the
Product & Consumer Market
Product Market
Worker Market
Consumer Market
14
How does specialization relate to voluntary exchange?
Trading weakens us by making us dependent on other nations.
Enough division of labor makes trade unnecessary.
Specialization helps to decide what to produce vs trade.
When we become specialized, exchange ceases to be voluntary.
15
Which describes human capital?
skills and knowledge
slowing or stopping production
land and labor
buildings and tools
16
Which is
not
one of the three key economic questions?
What goods and services should be produced?
How should goods and service be produced?
Why do we produce goods and services?
Who consumes the goods and services?
17
Decision Grids are valuable tools because they help us
Realize that trade-offs are unnecessary.
Solve problems when only two options exist.
Weigh benefits against opportunity costs.
Understand maximum production capabilities.
18
Basic requirements for human survival.
Scarcity
Needs
Wants
Labor
19
The cost added by producing one additional unit of a product or service.
Marginal Cost
Perverse Incentive
Incentive
Opportunity Cost
20
The most desirable alternative given up as the result of a decision.
Trade
Opportunity Cost
Marginal Cost
Specialization
21
Most economic systems exist on a continuum between
Command and Traditional
Command and Free Market
Mixed Market and Free Market
Mixed and Traditional
22
Market-based economic system with limited government involvement
Command
Free Market
Traditional
Mixed Market
23
The line on a production possibilities graph that shows the maximum output / efficiency.
Opportunity Costs
Factors of Production
Production Possibilities Curve
Production Possibilities Frontier
24
Which economic system most values security and safety nets?
Mixed Market
Free Market
Command
Traditional
25
Point A represents
Impossibility
Capacity
Efficiency
Inefficiency
26
Raw materials from nature that are used to produce goods.
Renewable Resources
Raw Goods
Non-Renewable Resources
Natural Resources
27
Which entity(ies) are responsible for income?
Business & Government
Businesses
Government
Households
28
Households can best be described as
Consumers
Businesses
Government
Producers
29
What is necessary to ensure increased standards of living?
Stagnation
Innovation
Security
Equity
30
What type of services is a government most likely to provide?
Consumer Goods
Education
Safety Nets & Education
Safety Nets
31
Desires that can be satisfied by consuming a good or service.
Wants
Needs
Needs and Wants
Greed
32
Which of these is a positive statement?
A 10% decrease in supply of oil ought to increase it's price.
A 5% increase in price has led to a 5% decrease in sales.
A 5% increase in price should lead to a 5% decrease in sales.
A 10% decrease in supply of oil should not lead to an increase in price.
33
An economic system in which the government controls a country's economy.
Mixed Market
Free Market
Traditional
Command
34
Which type of market does this circular model represent?
Mixed Market
Traditional
Free Market
Command
35
A person who starts up and takes on the risk of a business.
Entertainer
Job Creator
Entrepreneur
Job Producer
36
Land, labor, and capital
Opportunity Costs
PPF or PPC
Natural Resources
Factors of Production
37
Adam Smith’s concept of the
invisible hand
is best described as
The development of the division of labor.
The opposite of self-interest.
Interaction between buyers and sellers.
The self-regulating nature of the market.
38
The principle that people may decide what, when, and how they want to buy and sell.
Economics
Specialization
Voluntary Exchange
Scarcity
39
The development of skills in a specific kind of work; division of labor.
Scarcity
Wants
Specialization
Needs
40
The study of scarcity and choice.
Psychology
Pedogogy
Economics
Sociology
