Econ Ch 1 and 2 (Introduction to Economics)

Question 1

According to Adam Smith,

Accepted Answer

government should not interfere in the marketplace

Question 2

Almost all economic systems today are

Accepted Answer

mixed

Question 3

One advantage of a traditional economy is

Accepted Answer

you know what is expected of you

Question 4

Since the 1880s, the role of government in the United States has

Accepted Answer

increased significantly

Question 5

Which is the process of freely exchanging goods and services between buyers and sellers?

Accepted Answer

market

Question 6

In Karl Marx's ideal form, which is an economic system where there is no need for government?

Accepted Answer

communism

Question 7

A factory building is part of which type of factors of production?

Accepted Answer

capital

Question 8

Which describes what you have to give up in order to obtain a good or service?

Accepted Answer

opportunity cost

Question 9

Which is the economic problem that results from having limited resources and unlimited wants?

Accepted Answer

scarcity

Question 10

Economic models are important because they

Accepted Answer

can help people analyze the way the real world works

Question 11

Which type of economic system is present in the United States?

Accepted Answer

Mixed

Question 12

In the American economy, who answers the three economic questions?

Accepted Answer

individuals through the marketplace

Question 13

What illustrates how money moves from individuals to businesses and back again?

Accepted Answer

circular flow of income and output

Question 14

Which is the ability of new individuals to start new businesses?

Accepted Answer

entrepreneurship

Question 15

Which describes any man-made item used in the production of goods and services?

Accepted Answer

capital

Question 16

Pure socialism is characterized by

Accepted Answer

government ownership of the factors of production

Question 17

Competition forces businesses to

Accepted Answer

keep prices low

Question 18

Which is an attempt to balance economic policy so that everyone benefits fairly?

Accepted Answer

economic equity

Question 19

All economic choices involve

Accepted Answer

trade-offs

Question 20

Which is an economic system where economic decisions are made by individuals not government?

Accepted Answer

market

Question 21

Who owns the factors of production and makes economic decisions in a market economy?

Accepted Answer

individuals

Question 22

A major characteristic of a pure market economy is

Accepted Answer

unrestricted competition

Question 23

Which is a theory or simplified representation that helps explain or predict economic behavior?

Accepted Answer

economic model

Question 24

Which is rivalry among producers to win business?

Accepted Answer

competition

Question 25

The goal of economic freedom is to

Accepted Answer

allow each member of society to make choices

Question 26

Which is the study of how small units use scarce resources to satisfy their wants?

Accepted Answer

microeconomics

Question 27

Which is an action that satisfies a person's wants or needs?

Accepted Answer

service

Question 28

Which of the following is a characteristic of capitalism?

Accepted Answer

marketplace efficiency

Question 29

In a trade-off, opportunity cost is the value of the

Accepted Answer

next best alternative

Question 30

What motivates people to establish new businesses or expand existing ones?

Accepted Answer

profit incentive

Econ Ch 1 and 2 (Introduction to Economics)

Questions 30

Econ Ch 1 and 2 (Introduction to Economics)

Questions 30