Unit 1 Quiz

The study of economics includes

Which is not one of the 3 key economic questions

Scarce, has utility and is transferable

Which is a modern example of a command economy?

Evaluating costs and benefits of choices is called

an economic system in which the gov't makes all decisions on the 3 key economic questions

the income people receive in return for supplying factors of production

the structure of methods and principles that a society uses to produce and distribute g/s

Opportunity costs refers to

the productive efforts of individuals and businesses on a limited number of activities

Labor as a FOP does NOT include...

the struggle among producers for the dollars of consumers

How is the principle of “There’s No Such Thing As A Free Lunch” illustrated in a socialist economy?

Wealth must be

What's a main disadvantage of a traditional economy?

Drive U.S. decisions about what to produce

A market economy allows buyers and sellers to do what?

the arena of exchange in which households purchase goods and services from firms

A capital good would NOT include a ...

level of economic prosperity

any arrangement that allows buyers and sellers to exchange things

How does a traditional economy answer the basic questions of WHAT, HOW, and FOR WHOM to produce?

a form of gov't that limits individual freedoms and requires strict obedience from its citizens

What kind of economy offers uniformity in wages regardless of individual productivity?

Gov't and economy that believe that wealth should be distributed evenly throughout a society

an economic system that relies on habit, custom, or ritual to decide the 3 economic questions

Factors of Production: Ohio's cold winters and warm summers are an example of...

The Factors of Production include:

Factor Market

What's a benefit of having privately owned resources in a market economy?

An office manager is an example of

an organization that uses resources to produce a product or service, which it then sells

Standard of living

the hope of reward or fear of penalty that encourages a person to behave in a certain way

the doctrine that government generally should not intervene in the marketplace

a person or group of people living in a single residence

The Production Possibility curve/frontier will contract (shift left) if ...

the arena of exchange in which firms purchase the factors of production from households

What is the key similarity between a command economy and socialism?

Which type of economy is best able to adjust to change over time?

A division of labor is used because

an individual's own personal gain

What's a key difference between a command economy and socialism?

a term coined by Adam Smith to describe the self-regulating nature of the marketplace

an economic system characterized by private or corporate ownership of capital goods

Which statement describes a disadvantage of a command economy?

Production Possibility Curve (frontier) can expand when...

Which of the following is a disadvantage of a market economy?

Who affects the choices of all in a market economy?

a market-based economic system in which the government is involved to some extent

the process of selling businesses or services operated by the gov't to individual investors

the amount of money a business receives in excess of its expenses

Gov't owns and controls all resources and means of production and makes all economic decisions

an economic system in which decisions are based on voluntary exchange in markets

What question do all societies have to answer?

Which type of economy has a disadvantage in that it produces low-quality goods?

Who makes the decisions in a command economy?

property that is owned by individuals or companies, not by the gov't or the people as a whole

An example of a consumer good

Economic growth