What is the best definition of competition?

Attempts by two or more entities try to get the same G & S

What are the 3 economic questions that societies try to answer with economic systems?

What, How, For whom to produce?

What is the definition of scarcity?

Human wants exceed ability of resources to satisfy wants

What is the best definition of profit motive?

Desire to make money and motivates people to work hard

What is the best definition of land in Economics?

All natural resources used in producing an item

What is another way to refer to a command economy?

Communist/Authoritarian, Centralized

What is the best definition of labor in Economics?

The physical work done to produce an item

Who answers the 3 basic economic questions in a market economy?

Buyers and sellers, Consumers and producers

What is a free rider problem?

When someone uses a good or service but doesn't pay for it

How do we define productivity?

The relationship between inputs and outputs

What is the best definition of consumer sovereignty?

Extent to which people are free to choose in the market

What is true about any point inside of the production possibilities frontier?

Inefficient (unemployed) resources

What is the best definition of government regulation?

Extent to which the government intervenes in the economy

A classic market failure is an externality. What is an externality?

When a third party is affected by a problem in a market

When do people behave in rational ways, according to economists?

When costs > benefits and the person does that action

What is the definition of opportunity cost?

The next best alternative to a choice.

What is the best definition of capital in Economics?

The tools and buildings used in producing an item

How do individuals specialize?

By focusing on ONE job through division of labor

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Fundamental Economic Concepts EOC Review

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Questions 30

Answers

1
What is the best definition of competition?
Attempts by two or more entities try to get the same G & S
Extent to which the government intervenes in the economy
Extent to which people are free to choose in the market
Desire to make money and motivates people to work hard
2
What are the 3 economic questions that societies try to answer with economic systems?
What, Where, and For whom to produce?
What, How, For whom to produce?
Where, How, When to produce?
When, How, What to produce?
3
What is the definition of scarcity?
Needs exceed the available wants of the world
Unlimited resources are able to satisfy limited wants
Land is able to support all life forms
Human wants exceed ability of resources to satisfy wants
4
What is another way to refer to a market economy?
Centralized
Capitalist
Decentralized
Communist/Authoritarian
5
What is the best definition of profit motive?
Extent to which people are free to choose in the market
Attempts by two or more entities try to get the same G & S
Desire to make money and motivates people to work hard
Extent to which the government intervenes in the economy
6
Price, lottery, force, contests, sharing, command are all strategies used to ______ resources.
Aggregate
Demand
Allocate
Distribute
7
What is the best definition of land in Economics?
The physical work done to produce an item
The knowledge of how to use tools to produce an item
The tools and buildings used in producing an item
All natural resources used in producing an item
8
Who answers the 3 basic economic questions in a command economy?
The government
Consumers and producers
Buyers and sellers
Customs and historic precedent
9
What is another way to refer to a command economy?
Communist/Authoritarian
Capitalist
Centralized
Decentralized
10
What is true about point Y?
A loss of product B
A loss of product A
Inefficient (unemployed) resources
An impossible production point
11
What happens to income and unemployment when one attains a higher level of education?
Income down, unemployment down
Income up, unemployment up
Income down, unemployment up
Income up, unemployment down
12
Who faces the problems of scarcity?
All answers are correct
Individuals
Businesses
Governments
13
What is the best definition of labor in Economics?
The knowledge of how to use tools to produce an item
All natural resources used in producing an item
The physical work done to produce an item
The tools and buildings used in producing an item
14
Who answers the 3 basic economic questions in a market economy?
Customs and historic precedent
The government
Buyers and sellers
Consumers and producers
15
What is a free rider problem?
When someone pays for goods and services
When someone uses a good or service but doesn't pay for it
When someone receives income for work done
When someone gets a ride in a cop car
16
How do we define productivity?
The relationship between production and consumption
The relationship between goods and services
The relationship between inputs and outputs
The relationship between eating and sleeping
17
What is the best definition of consumer sovereignty?
Extent to which people are free to choose in the market
Attempts by two or more entities try to get the same G & S
Desire to make money and motivates people to work hard
Extent to which the government intervenes in the economy
18
What is the opportunity cost of moving from point A to point C?
A loss of product B
A loss of product A
An impossible production point
Inefficient (unemployed) resources
19
The following list is the example of which factors of production? Oil, water, forests.
Labor
Land
Entrepreneurship
Capital
20
A market economic system is best at addressing which economic goals?
Equity, security, stability
Equity, growth, security
Freedom, security, equity
Freedom, growth, efficiency
21
What is true about any point inside of the production possibilities frontier?
Inefficient (unemployed) resources
A loss of product B
A loss of product A
An impossible production point
22
The following list is the example of which factors of production? Roads, dams, equipment
Land
Capital
Labor
Entrepreneurship
23
What is the best definition of government regulation?
Attempts by two or more entities try to get the same G & S
Extent to which people are free to choose in the market
Desire to make money and motivates people to work hard
Extent to which the government intervenes in the economy
24
A classic market failure is an externality. What is an externality?
When a person intentionally creates a problem in a market
When a third party is affected by a problem in a market
When a government intentionally makes a problem in a market
25
A command economic system is best at addressing which economic goals?
Equity, security, stability
Freedom, security, equity
Freedom, growth, efficiency
Equity, growth, security
26
When do people behave in rational ways, according to economists?
When decisions are made without thought
When costs > benefits and the person does that action
When benefits > costs and someone does that action
Nobody can be rational
27
What is the definition of opportunity cost?
A means of allocating resources.
The next best alternative to a choice.
A choice that is made at the expense of other options.
The last alternative to a choice.
28
What is the best definition of capital in Economics?
All natural resources used in producing an item
The knowledge of how to use tools to produce an item
The physical work done to produce an item
The tools and buildings used in producing an item
29
When people trade, why do they both benefit?
They voluntarily exchange products they have for needs
They gain products they may not be able to make alone
They non-fraudulently exchange in a fair way
All answers are correct
30
How do individuals specialize?
By focusing on ONE job through division of labor
By doing multiple tasks repeatedly

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