The essential difference between a command economy and a market economy is that in a market economy

buyers and sellers determine resource allocation

Which is a basic economic question that must be answered by all economic systems?

What goods and services will be produced?

The opportunity cost of a new city park is the

best alternative use of resources given up for the park

Economics is the study of how

people use their scarce resouces to satisfy unlimited wants

Which is the most essential for an efficient market economy?

active competition in the marketplace

A high school student buys a sweatshirtfrom a store on sale at 20% off.In this exchange,

the student and the store benefit

A basic role of entrepreneurs in the economy is to

take the risks associated with starting new businesses.

In every economic system, people must choose how to

make the best use of scarce resources

Scarcity arises because all societies have

limited productive resources to satisfy unlimited wants

Why do medical doctors generally earn more than farmers?

Medical doctors are more scarce, given the demand for their services

In a market economy, the public interest is likely to be served even when individuals pursue their own goals because of

the operation of competitve markets

What does the circular flow model of the economy describe?

the flow of resources, products, income and revenue in an economy

studbud

Econ Unit 1 Review

20 termsStudBud Administration244 plays

Imported from external platform

Flashcards20 cardsFPractice quizPHost liveL

Questions 20

Answers

1
The essential difference between a command economy and a market economy is that in a market economy
prices are largely determined by gov't regulation of businesses
shortages occur more than surpluses
central planning creates an effective incentive system
buyers and sellers determine resource allocation
2
Which do economists consider to be a productive resource (factor of production)?
labor
money
profit
interest
3
studying the "smaller picture" or the choices made by individuals within an economy is known as
macroeconomics
normative economics
microeconomics
consumer economics
4
Which is a basic economic question that must be answered by all economic systems?
What goods and services will be produced?
How can markets be kept competitive?
How will corporations be organized?
What form of central planning will the government use?
5
Firms wish to sell their productsat high prices. We wish to buyproducts at low prices. In a marketeconomy this conflict
competition
government regulation
lawsuits
collective bargaining
6
The opportunity cost of a new city park is the
lack of personal incentive for people to take care of the park
cost of staff and maintenance for the park
increased congestion from traffic around the park
best alternative use of resources given up for the park
7
Economics is the study of how
gov't supplies money to businesses to produce goods and services
people use their scarce resouces to satisfy unlimited wants
gov't allocates scarce resources to satisfy people's unlimited wants
businesses suppy unlimited goods and services with limited resources
8
Which would most likely increase the productivity of labor?
increase in interest rates for business loans
decreasing pay of corporate executives
investing in capital goods
decrease in the use of labor saving technology
9
Which is the most essential for an efficient market economy?
Effective labor unions
responsible decisions by business leaders
active competition in the marketplace
strong government regulation
10
A high school student buys a sweatshirtfrom a store on sale at 20% off.In this exchange,
the student benefits, but the store does not
the store benefits, but the student does not
the student and the store benefit
neither the student nor the store benefits
11
A basic role of entrepreneurs in the economy is to
take the risks associated with starting new businesses.
create dividends for investors in new businesses.
buy and sell the common stocks of new corporations.
show government what new products the economy can produce and sell.
12
the maximum output a nation could possibly produce in any one year is limited by its
consumer income
productive resources
business investment
unemployment rate
13
In every economic system, people must choose how to
satisfy all wants of society
make the best use of scarce resources
create an equal distribution of income
save money to reduce the national debt
14
A study of total consumption in the U.S. economy would involve
macroeconomics
consumer economics
normative economics
microeconomics
15
Scarcity arises because all societies have
unlimited productive resources to satisfy limited wants
limited productive resources to satisfy unlimited wants
unlimited needs and limited wants
limited needs and unlimited wants
16
Which of these productive resources includes factories, tools, trucks, machines and computers?
agricultural goods
capital resources
human resources
natural resources
17
Why do medical doctors generally earn more than farmers?
There are fewer medical doctors than farmers in our economy.
Medical doctors are more efficient than farmers.
Medical doctors provide a service rather than make a product.
Medical doctors are more scarce, given the demand for their services
18
An economic system where all resources are gov't owned and production is directed by the central plans of the gov't
pure market economy
pure command economy
mixed economy
monopoly economy
19
In a market economy, the public interest is likely to be served even when individuals pursue their own goals because of
the social responsibility of business leaders
the operation of competitve markets
individuals understanding of what is in the public's interest
central planning and coordination of market activity
20
What does the circular flow model of the economy describe?
the flow of profit in an economy
the flow of money in the foreign exchange market
the flow of resources, products, income and revenue in an economy
the flow of international trade around the world

Econ Unit 1 Review Flashcards | StudBud