The economic concept of guns or butter means that

gov't decides to make more/less military/consumer goods.

What trend does the original ppc curve (red) show?

As more t-shirts are made, less jeans are made.

Human capital includes

the knowledge a taxi driver has of the city streets.

Which of the following is characteristic of traditional economies?

They revolve around the family unit..

A decision is made at the margin when each alternative considers

cost and benefit ranked in progressive units.

What is the production possibilities frontier or curve?

a line showing how much is made so resources are best used

Why are free market economies able to grow?

Competition encourages innovation.

Which of the following best describes the economy of the United States?

mixed, but more like a free market

Each society answers the three basic economic questions based on

its unique combination of values and goals.

Which of the following would be part of the flow indicated by the arrow labeled “b”?

smoke alarms for senators’ offices

studbud

Unit 1 Principles of Economics

25 termsStudBud Administration240 plays

Check your knowledge of key concepts from chapter 1, 2, and 8.

Flashcards25 cardsFPractice quizPHost liveL

Questions 25

Answers

1
The economic concept of guns or butter means that
a company must decide whether to manufacture guns or butter.
a person can spend money on either sports equipment or food.
gov't buys unlimited military/ consumer goods if it is rich.
gov't decides to make more/less military/consumer goods.
2
A factory building is an example of which factor of production?
land
physical capital
labor
human capital
3
What trend does the original ppc curve (red) show?
The number of t-shirts doesn't impact jean production.
As more t-shirts are made, less jeans are made.
As more t-shirts are made, more jeans are made.
As the number of t-shirts decreases, jeans decrease as well.
4
In what kind of an economy does the government make all the decisions?
laissez faire
centrally planned
mixed
free enterprise
5
All goods and services are scarce because
things are either needs or wants.
some goods cost more than others.
resources are limited.
greedy people want too many goods.
6
If 30 million pairs of jeans are made(red curve), how many t-shirts can be made?
60
20
0
40
7
You work in a store. Where in the diagram does your paycheck from the store belong?
product market: physical flow
factor market: physical flow
factor market: monetary flow
product market: monetary flow
8
Human capital includes
the equipment used by a doctor to cure a patient.
the machinery run by a seamstress to weave cloth.
the knowledge a taxi driver has of the city streets.
the salary paid to an accountant.
9
Society's economic goals include all of the following except
justice
freedom
equity
growth
10
Which country is transitioning from centrally planned to more free market characteristics?
China
North Korea
Russia
Mexico
11
The law of increasing costs means that when an economy increases the production of one item the
actual cost goes up but the opportunity cost goes down.
actual cost of making the item goes down.
production costs will increase also.
opportunity cost goes up.
12
Which of the following is characteristic of traditional economies?
They encourage change.
They have a high standard of living
They revolve around the family unit..
They are usually based on industry.
13
The government places a tax on every gallon of gas sold to pay for roads. The goal targeted is
growth
freedom
equity
efficiency
14
Policies that reduce the risk from economic harms such as job loss target the economic goal of
equity
security
freedom
stability
15
A decision is made at the margin when each alternative considers
where the most costly alternative will be.
cost and benefit ranked in progressive units.
what the “all or nothing” alternative will be.
a different trade-off than the others.
16
What is the production possibilities frontier or curve?
a line showing how resources can best be used in the future
a line that shows the only way resources can be used
a line that shows when resources are underutilized
a line showing how much is made so resources are best used
17
Why are free market economies able to grow?
Competition encourages innovation.
Firms keep producing incentives.
Consumers can buy all needed goods.
Everyone acts in their own interest.
18
What “invisible hand” directs the free market?
incentives and efficiency
competition and self-interest
specialization
circular flow
19
Which of the following would NOT cause the PPC to shift to the right?
increased human capital
unemployment
increase in population
technology
20
Which type of economic system does this diagram best illustrate?
mixed economy
command economy
free market economy
traditional economy
21
Which of the following best describes the economy of the United States?
centrally planned
mixed, but more centrally planned
free market
mixed, but more like a free market
22
An economy that is producing the maximum amount of goods and services is considered
efficient.
trading off.
growing.
underutilized.
23
Which country is the free market most dominant?
UK
U.S.
Hong Kong
Canada
24
Each society answers the three basic economic questions based on
the desire to achieve economic freedom.
its degree of economic growth.
its unique combination of values and goals.
the number of factor payments.
25
Which of the following would be part of the flow indicated by the arrow labeled “b”?
Secret Service salaries
import taxes paid by foreign firms
smoke alarms for senators’ offices
rent for a leased building

Unit 1 Principles of Economics Flashcards | StudBud