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Unit 1 Review
Unit 1 Review
32 terms
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Flashcards
32 cards
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Practice quiz
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Questions
32
Answers
1
Specialization leads to:_________
Market Competition
Price System
Voluntary Exchange
Private Property
2
The opportunity cost of an activity is
the amount of time spent on the activity
the value of the lost benefit of the next best alternative
the value of the benefit received from the activity
the sum of benefits from all the sacrificed alternatives
3
The
Law of Diminishing Marginal Utility
states that w/each additional unit...
your finances decline.
the total resources of the nation decline.
your satisfaction w/it grows.
your satisfaction w/it decreases.
4
Which of the following are considered to be outputs?
services
intermittent goods
the factors of production
goods
5
What is a capital good?
Goods that are used to produce other goods
A good made in the capital of a state
A good for consumers
A form of money
6
Who answer the economic questions in a
Command (communist)
Economy
?
Firms and Households.
Combination of Firms, Households, and Government.
Government.
No one.
7
What is the key issue that economics addresses?
Use of scarce resources
Reduction of budget deficit
Reduction of unemployment
Promotion of privatization
8
Which of the following is the best example of physical capital?
An increase in construction jo
A truck for a delivery company
A $100,000 business loan from a bank
A business hiring 10,000 workers at a factory
9
What is the most common economic system?
Mixed
Traditional
Market
Command
10
Who supplies the factors of production in the circular flow of a market economy?
Households
Firms
Governments
11
Who supplies goods and services in the circular flow of a market economy?
Firms
Governments
Households
12
A country’s infrastructure is its...
natural resources
private financial institutions
public capital goods such as highways
internal, as opposed to external, debt
13
A PPC Curve illustrates...
The supply of all factors of production in an economy
The demand for consumer goods in an economy
The effects of fiscal policy on an economy
How much an economy is capable of producing
14
What are the four factors of production?
Water, Air, Earth, Fire
Land, Labor, capital, Entrepreneurship
Land, Liberty, Capital Entertainment
Land, Labor, Capital, Entertainment
15
What is comparative advantage
The producer with the middlest opportunity costs
The producer with decent opportunity costs
The producer with the lowest opportunity cost
The producer with the highest opportunity cost
16
What are the three economic questions a society must answer ?
Who to trade with? How much to trade? What to trade?
What is the population ? What is the weather? What for?
What is the market like? What is the currency? What to trade
What to produce? Who to produce for? How to produce it?
17
What is a negative cost of trade?
job loss for some
a less productive society
declining Production Possibilities Curve
decreased economic wealth
18
In which market of the circular flow are the factors of production exchanged?
product market
factor market
19
The discovery of new technology would do what to a PPC?
Shift the curve inward
Move to a point outside the curve
Shift the curve outward
Move to a point inside the curve
20
Under modern economic philiosophy, producers should specialize in what they have a ____ and trade for what they don't.
absolute advantage
comparative advantage
21
Who answer the economic questions in a
Market (capitalist)
economy?
No one.
Firms and Households.
Government.
Combination of Firms, Households, and Government.
22
What are the three factors that can increase productive capacity?
technology
financial investments
resources
trade
23
What point shows an
unemployment of resources
?
A
C
X
Y
24
Which of the following is the best example of investment in Human Capital?
Training workers.
Hiring new workers.
Buying new equipment.
Decreasing the wage rate.
25
Scarcity exists because
Supplies of land and other resources are unlimited.
human wants exceed the productive capacity of an economy.
Population and the labor force are decreasing.
physical capital does not depreciate.
26
Specialization improves productivety by...
improving innovation
improving human capital
improving physical capital
improving technology
27
How does trade make people economically wealthier?
By increasing financial profits.
By moving goods to where people value them.
By lowering the costs of production.
By increasing the variety and quantity of goods.
28
Human capital is
The skills, knowledge, and experience possessed by and individual
The knowledge, skills, and land possessed by an individual
The demand, knowledge, and skills possessed by an individual
The skills, knowledge and money possessed by an individual
29
What point shows
efficiency
?
A
C
Y
X
30
Why are tradeoffs necessary?
Every product has flaws
Everyone wants something different
People are indecisive
Resources are limited
31
Macroeconomics is the study of how _____ deal with scarcity.
Individual consumers
governments
Households
large corporations
32
What is absolute advantage?
To have the biggest PPC shift
To have have the most money
To make the most of a certain product
To make a product most efficiently
