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Economics Review 1 of 3 Flashcards | StudBud
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Economics Review 1 of 3
Economics Review 1 of 3
20 terms
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StudBud Administration
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Review for Exam covering Basics, Econ systems, Supply/Demand.
Flashcards
20 cards
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Practice quiz
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Questions
20
Answers
1
In a market economy, when consumers and producers act in their own self-interest, which is most likely to be the result?
The individuals or businesses will lose money no matter what they sell
The consumer will pay high prices for goods and services.
The market will have less variety and fewer products will be made.
The producers are likely to earn a profit making products people want.
2
In economic terms, what are land, labor, capital and entrepreneurship?
Production trade-offs
Opportunity costs
Factors of production
Production possibility
3
What is the most basic economic issue for all societies?
Inflation
Recession
Scarcity
Taxation
4
In a market economy, what is the government’s role?
Decides what goods are manufactured
Encourage competition among businesses
Owns and operates major industries
Sets prices on goods and services
5
A hurricane hit Florida and destroyed half of the orange crop. What would most likely happen to the orange market?
Supply of oranges will increase
The price of oranges will increase
The price of oranges will fall
Demand for oranges will rise
6
. On a supply and demand graph, what is the point called at which quantity demanded equals quantity supplied?
Surplus
Equidistant
Equilibrium
Shortage
7
What is the primary incentive that motivates a manufacturer to sell a product?
Pleasing the government
Putting others out of business
Reputation of the product
Making profits on sales
8
If a government sets a maximum price for a good or service, what does it create?
Inflated price
Price ceiling
Illegal price
Price floor
9
Which characteristic best describes a traditional economy?
Customs and religions
Communism and inflation
Labor unions and wages
Markets and systems
10
What is the most likely to happen when consumers want to buy more scooters than the store has available for sale?
Price of the scooter will increase
Stores will make a different model.
Manufacturers will stop making it.
Profit on scooter sales will be smaller
11
What is the benefit of competition in a free market system?
Cause producers to try to put each other out of business
Follow the traditional methods of production
Create a variety of new and cheaper products
Make sure everyone gets an equal share of resources
12
What is the economic system in which customs and religion determine how the economy will use its scarce resources?
Traditional
Market
Transitional
Command
13
Which of the following countries exhibit the characteristics of a market economy?
Cuba
China
North Korea
United States
14
In a market economy, what determines the price and quantity of most goods produced?
Economic policies
Supply and demand
Quality of goods
Substitute goods
15
In every economic system, what must people choose to do?
Make the best use of scarce resources
Save money to reduce the national debt
Create an equal distribution of income
Satisfy all the wants of their society
16
There is a country in which the gov't owns all the industries, businesses, and farms.What of economy does this describe?
Traditional
Transitional
Market
Command
17
Which of these actions would most likely result in a decrease in consumer spending?
Decreasing the reserve requirement
Increasing income taxes
Decreasing the interest rate
Increasing government spending
18
Which of the following is a main feature of a command economy?
Profit driven decision making
Central planning
Heavy reliance on markets
Private ownership
19
Sugar is an input in making cookies. If the price of sugar decreases, what would to happen to the supply of cookies?
Increases
Disappears
Decreases
No change
20
Which of these would cause an outward shift in demand?
Increased taxes
Lower production costs
Effective advertising
All of these
