What is an important advantage of a free market?

It offers a wide variety of goods and services.

What can cause a production possibilities curve to move to the right (outwards)?

A new invention lowers the cost of production.

What can a decision-making grid do?

help you determine the opportunity cost of your decision

Which of the following is NOT a basic economic question?

How should goods and services be paid for?

The purpose of a production possibilities graph is to

show alternative ways to use an economy's resources.

A company that makes baseball caps is under-utilizing its resources. What does this mean?

The company is producing fewer caps than it could be

You want to buy a $1400 camera to replace your $120 camera. Use a cost/benefit analysis to see

if buying a new camera will be worth the expense

Which of the following makes someone an entrepreneur?

creating a service to hire people to install sprinklers

An efficient economy is one that

uses its resources to make the most goods and services

Which of the following is characteristic of a traditional economy?

Children tend to have the same jobs as their parents did

Some degree of government intervention is needed even in a free market

to provide goods and services that the marketplace may not

You bought two DVDs for $30. The opportunity cost to produce the DVDs is BEST described as:

going out for dinner and a movie with your friends tonight

Which two types of economies are at opposite ends of government intervention?

centrally planned and free market

One example of thinking at the margin is

deciding to work two extra hours so you can't go to the gym

Which of the following lists would an economist consider to be land?

iron ore, natural gas, fertile soil, rivers

What is the opportunity cost of a decision?

the most desirable alternative given up for the decision

Why do markets exist?

They allow ppl. to buy wants/needs and sell goods/services

A mixed economy is BEST described by which of the following?

a market economy with a degree of government intervention

Which of the following is NOT true in a centrally planned economy?

Each collective or factory sets its own goals

is what is given up when a choice is made

What is the function of an economic system?

to produce and distribute goods and services

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HHS Renner Ch. 1 and Ch. 2: Foundations and Economic Systems

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Questions 34

Answers

1
In what kind of economic system does the government make all the decisions?
free enterprise
centrally planned
laissez faire
mixed
2
Boys are expected to become farmers like their parents were. Which kind of economy is this?
market economy
traditional economy
command economy
false economy
3
The resources used to make all goods and services are the
opportunity costs.
production trade-offs.
factors of production.
production possibilities.
4
What is an important advantage of a free market?
It is easy to regulate.
It does not change unless the government directs it.
It protects the less fortunate.
It offers a wide variety of goods and services.
5
What can cause a production possibilities curve to move to the right (outwards)?
An epidemic kills thousands of young men and women
A new invention lowers the cost of production.
The population is growing increasingly old.
Thousands of people move out of the country.
6
What can a decision-making grid do?
show you every possible benefit of your decision
show you every possible consequence of your decision
help you determine the opportunity cost of your decision
tell you the right course of action
7
Why are all goods and services scarce?
Some goods cost less than others so sellers might run out.
Some things are needs and others are wants.
All resources are scarce.
Some people want to have more goods than others.
8
Which of the following is NOT a basic economic question?
What goods and services should be produced?
How should goods and services be paid for?
How should goods and services be produced?
For whom will goods and services be available?
9
The purpose of a production possibilities graph is to
show alternative ways to use an economy's resources.
keep an economy from having nonproductive workers.
enable a country to mobilize to win a war.
make it possible to increase an economy's output.
10
A company that makes baseball caps is under-utilizing its resources. What does this mean?
The company is running more efficiently than its competitors
The company is producing fewer caps than it could be
The company is making caps when it could be making t-shirts
The company is paying its employees less than it should be
11
Increase military spending or subsidize wheat farmers. This kind of decision is a
basic economic decision
guns or butter issue
decision at the margin
global trade-off
12
You want to buy a $1400 camera to replace your $120 camera. Use a cost/benefit analysis to see
how the new camera is priced at different stores
all of the answers are correct
how much you could sell the old camera for on eBay
if buying a new camera will be worth the expense
13
Which of the following makes someone an entrepreneur?
earning a lot of money as a computer programmer
creating a service to hire people to install sprinklers
becoming wealthy by making excellent investments
inventing and selling rights to manufacture a computer game
14
An efficient economy is one that
uses its resources to make the most goods and services
has very few people who do not work for a living
makes the least costly use of its resources
makes the best use of all its goods and services
15
Which of the following is characteristic of a traditional economy?
They are usually based on light industrial production
Communities tend to be fast-growing
Children tend to have the same jobs as their parents did
They have a high standard of living
16
What is a factory building an example of?
a shortage because there are not enough of them
human capital
physical capital
land
17
Which of the following was a free market philosopher?
Adam Smith
Friedrich Engels
Karl Marx
Vladimir Lenin
18
Ford makes more cars and fewer SUVs. What is an example of the opportunity cost?
more customers
fewer SUVs produced
more cars produced
fewer customers
19
One of the most important advantages of a free market is that
it encourages growth
it protects the less fortunate
it is easy to regulate
it supports the largest companies
20
"Specialization" tends to benefit an economy because
it eliminates products that we don't need
it makes it easier to control what people buy
it eliminates unemployment
it makes it more efficient
21
Some degree of government intervention is needed even in a free market
to make sure gov't fulfills its need for military personnel
to make sure that its people have enough food
to ensure that the gov't has the freedom to tax necessary
to provide goods and services that the marketplace may not
22
You bought two DVDs for $30. The opportunity cost to produce the DVDs is BEST described as:
the difference between cost to produce and price you paid
the difference in what you paid for the DVDs vs. online cost
knowing you are the first of your friends to have these DVDs
going out for dinner and a movie with your friends tonight
23
Which two types of economies are at opposite ends of government intervention?
mixed and traditional
mixed and market
centrally planned and free market
traditional and centrally planned
24
One example of thinking at the margin is
deciding to work two extra hours so you can't go to the gym
determining if its better to spend savings on a tablet or TV
putting money in a savings acct cuz interest rates are up
buying a car you don't really want b/c you like the color
25
Which of the following lists would an economist consider to be land?
iron ore, natural gas, fertile soil, rivers
factories, office buildings, assembly lines, workers
dams, bridges, rock quarries, oil wells
farm fields, tractors, pesticides, fertilizers
26
A person who believes in the doctrine of laissez faire would likely approve of
city funding of a subway system
government-sponsored national health care
Social Security
competition in the marketplace
27
Which of the following is an example of scarcity rather than shortage?
A popular toy is sold out during the busy holiday season.
You have spent your last penny and payday is a week away.
Gasoline was rationed in America during World War II.
fresh water
28
What is the opportunity cost of a decision?
the most desirable alternative given up for the decision
the best possible way the question could have been decided
series of alternative decisions that could have been made
different ways that a person might have made the decision
29
Why do markets exist?
They ensure economic equality for all people
They ensure Gov't doesn't interfere with production
They provide self-sufficient ppl. with places to trade goods
They allow ppl. to buy wants/needs and sell goods/services
30
A mixed economy is BEST described by which of the following?
an economy that features many different jobs/occupations
a command economy with a degree of government intervention
a market economy with a degree of government intervention
a traditional economy with a degree of gov't intervention
31
Which of the following is NOT true in a centrally planned economy?
Each collective or factory sets its own goals
Each person is assigned a job
The central government makes all economic decisions
The central government owns all land and capital
32
A trade-off
are the goods and/or services traded for money
is what you get when you exchange an item at a store
is usually not as well-made as the original
is what is given up when a choice is made
33
Robotic machinery now builds cars. Cars take only a day to make now. This is an example of
human capital.
growth caused by technology.
production possibility curves.
land and natural resources.
34
What is the function of an economic system?
to make sure people are paid for their labor
to make sure all people have equal access to goods
to give all producers the same access to consumers
to produce and distribute goods and services

HHS Renner Ch. 1 and Ch. 2: Foundations and Economic Systems Flashcards | StudBud