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Unit 1 Fundamentals of Economics Review Flashcards | StudBud
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Unit 1 Fundamentals of Economics Review
Unit 1 Fundamentals of Economics Review
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A review to go over concepts for the Unit 1 test.
Flashcards
27 cards
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Questions
27
Answers
1
What is one characteristic of a Command economy?
Little government control of resources
Full government control of resources
Partial government control of resources
Economic Freedom is emphasized
2
Maria decides to buy $10 of art pencils instead of a book. What is her opportunity costs?
the satisfaction she would receive from reading the book
the satisfaction she will receive from drawing
The time she spent drawing with the pencils
The time she spent shopping for books
3
Rational decisions are made when
Marginal benefit is equal to or greater than marginal cost
Costs are greater than Profits
Supply is greater than Demand
Marginal cost is equal to or greater than marginal benefit
4
An assembly line can increase a factory’s productivity because it allows workers to...
specialize or work on a specific task
use a wide range of knowledge
put in overtime hours on the job
diversify their skills
5
You go out to eat and notice a waiter, a cook, and a dishwasher. This is an example of...
economy of scale
marginal productivity
Production Possibilities
specialization
6
The feature that distinguishes the U.S. economy from the free market model is
private ownership of the factors of production
limited government involvement
self interest and incentives
Government control of all factors of production
7
What is an economic example of Land?
iron ore, cotton, water, trees
buildings, offices, and barns
factories, trucks, and machines
cashier, cook, and manager
8
You are an entrepreneur with an innovative idea for a new business. In which economy would you have the most opportunity
Traditional
Free Market
Command
Mixed Economy
9
What does moving from point B to C represent?
A gain of 30 tons of capital goods
A gain of 30 tons of consumer goods
A loss of 30 tons of consumer goods
A loss of 30 tons of capital goods
10
What is the second best alternative that we give up whenever we make choices
Marginal Revenue
Opportunity Gained
Opportunity Cost
Trade offs
11
The fundamental problem of economics is:
how to establish a democratic political framework
establishing an equitable system of taxation
equitable distribution of money in order to reduce poverty
Unlimited wants and needs in the face of scarce resources
12
What is the greatest disadvantage of someone moving from a command to market economy?
Loss of Economic Freedom
Loss of Economic Security
Loss of Consumer Sovereignty
Loss of Economic Efficience
13
Why is specialization so important in a business?
Allows workers to share each job equally
Allows owners to hire more workers than they really need
Allows owners to hire fewer workers and still make a profit
Allows workers to focus on one area of expertise
14
Any goods that are made by humans and then used to create other goods and services are called
production
services
labor
physical capital
15
In the image what does X represent?
Efficiency
Opportunity Costs
Impossible Production
Inefficiency
16
Which one of the following is NOT one of the three basic economic questions?
What to produce
When to produce
How to produce
For whom to produce
17
Which of the following would NOT cause the PPC to move from PP to P'P'?
Increased Labor skills and Education
Increase in technology
Discovery of new resources
Increased Governnment Regulations
18
In the production of chocolate chip cookies, which represents the factor of Physical CAPITAL?
the retailer who sells the cookies
the oven used to bake the cookies
the worker who decorates the cookies
the property where the factory is located
19
Why do we have opportunity costs?
We have unlimited wants but limited productive resources
Marginal costs are greater than marginal benefits
We have limited wants but unlimited productive resources
Because there is a cost with everything we do in life
20
Why is buying a car an example of Voluntary Exchange?
Because both parties gain from the exchange
Because the car company earns a profit and you have a debt
Because the car company must sell car for a certain price
Because you have limited resources and choices in car types
21
Which of the following is an example of an investment in human capital?
a state builds a new highway
a company buys a new piece of equipment
a worker gets training on how to operate a computer
a county hires a new tax collector
22
If a bridge needs to be built in a Market economy, who will pay for the bridge?
The city government will decide
The owners of the property
The state government will allocate its taxes to pay
The federal government will raise taxes to pay for it
23
In the image what does Y represent?
The most efficient use of resources
Opportunity Costs
An impossible production option at the present time
An inefficient use of resources
24
In a market economy who answers the question of what to produce?
Traditions and customs
Various government departments build whats necessary
Whatever goods and services consumers demand are what producers produce.
Governments
25
Which of the following is a primary role of the government in the U.S. economy?
It protects property rights
It guarntees equal outcomes for all
It guarantees jobs for all citizens
It owns the majority of land and capital
26
Productivity goes up whenever...
the same output is produced using fewer inputs
more resources are used
there is an increase in minimum wage
the government raises taxes
27
Which of the following is a Public Good?
Georgia State HWY 400
Dawsonville Outlet Mall
Six Flags Amusement Park
Delta Airlines
