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Economics Chapters 1-3 Review Flashcards | StudBud
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Economics Chapters 1-3 Review
Economics Chapters 1-3 Review
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1
A general rise in the level of prices over time is
voluntary exchange.
a catalyst.
profit.
inflation.
2
Refer to the production possibilities curve. What does moving from point b to c require?
technological change
a decrease in unemployment
producing less civilian goods to boost the production of military goods
producing less military goods to boost the output of civilian goods
3
Markets in the free enterprise system are seldom regulated by
the government.
consumers.
entrepreneuers.
business.
4
Which of the following describes a disadvantage of a traditional economy?
difficult decisions are made by the state
new ways of doing things are discouraged
everyone knows his or her role
individuals have freedom to produce what they want
5
Identify which of the following would be an example of capital.
apple tree
digging a ditch
cotton field
oven
6
Which statement describes why the people in a nation w/ a command economy might resist a shift to a free market economy?
Workers are reluctant to accept complete gov. control of their economy.
People who hold political power are threatened by fundamental changes.
Workers are reluctant to give up their participation in a classless society
Factories are reluctant to place their capital under work authority.
7
What type of economy is the most prevalent in the world today?
traditional
mixed
market
command
8
Actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of
trade-offs.
opportunity costs.
economic interdependence.
specialization.
9
All of the following are weaknesses of a command economy EXCEPT that it
provides few incentives for people to work hard.
requires a large decision-making bureaucracy.
lacks the flexibility to deal with minor problems.
can change direction drastically in a short time.
10
Some necessities have little value while some necessities have a much higher value is known as
economic interdependence
paradox of value
trade-offs
opportunity cost
11
What is the struggle among sellers to attract consumers by offering the best products at the lowest prices?
private property
voluntary exchange
profit motive
competition
12
What are the three basic questions about the production of goods all societies are faced with?
what, how, and why
when, where, and for whom
what, where, when
What, how, and for whom
13
Division of labor is important because
companies do not want workers to talk to one another.
it increases efficiency by ensuring workers become good at specific tasks.
it prevents specialization.
it increases efficiency by ensuring all workers become good at every task.
14
The study of economics is important because it enables us to
understand how wages are earned and spent and how jobs are created.
to become better decision makers.
all of the above
understand a free enterprise economy
15
Which of these economic systems have the least in common?
command economy and socialism
free enterprise economy and market economy
command economy and capitalism
market economy and capitalism
16
How does the government operate in a free enterprise economy?
It interferes with businesses only when it is profitable.
It establishes laws and rules to maintain competition.
It tells businesses what to produce and what to sell.
It takes a "hands-off" approach.
17
Economics is BEST defined as the study of how societies deal with
the paradox of wealth.
the division of labor.
the factors of production.
the problem of scarcity.
18
Why are consumers powerful?
Their interests force producers to behave ethically.
They have more rights than corporations.
They help decide a business's opportunity costs.
They drive decisions about what to produce.
19
Is it possible for this country to produce $5 billion worth of military goods, and $9 billion dollars of civilian goods?
yes, as long as it fits on the graph, it can be produced.
No, there are not enough resources.
No, this country doesn't need that many civilian goods.
Yes, and they would have resources left over.
20
Which of the following explains why products made under a command economy are more likely to be low quality?
The workers are not given quality-control guidelines.
The workers are left to manage production facilities on their own.
The workers have little incentive to make them well.
The workers are forced by tradition to use old-fashioned methods.
21
The minimum wage is an example of a federal law that supports
economic growth.
full employment.
economic efficiency.
economic equity.
22
Which of the following factors of production involve taking risks and combining resources to produce a good or service.
land
capital
labor
entrepreneurship
23
There is more government regulation in a market economy than a command economy.
False
True
24
Which type of economic system is the gov. most likely to provide people with goods/services they couldn't afford?
free enterprise economy
market economy
traditional economy
command economy
25
Why is economic growth an important goal of the United States?
It leads to price stability.
To better satisfy the wants and needs of a growing population.
Americans have a strong sense of fairness.
It is the only way to achieve economic equality.
26
What is an American incentive that gives people the right to work, save, invest, and get ahead?
voluntary exchange
competition
private property rights
economic interdependence
27
Which of the following is a major advantage of a market economy?
There is a high degree of individual freedom.
It can change direction rapidly as needed when markets change.
There is sufficient government control of production and distribution.
People are likely to be offered goods and services they cannot afford.
28
What would a business use to decide whether a certain action is worth the cost?
needs assessment
circular flow model
production possibility comparison
cost-benefit analysis
29
What is the value of all final goods and services a country produces in a year (most comprehensive measure of output)?
cost-benefit analysis
financial capital
gross domestic product
standard of living
30
What does the saying "There is no such thing as a free lunch" mean?
most things cost nothing
everything costs something
most things cost something
some things cost nothing
31
What role is the government playing in a free market economy when they ensure safety in air transportation?
consumer
protector
provider
regulator
32
A circular flow model shows how
all interactions occur in a market economy.
all interactions occur in a traditional economy.
some interactions occur in a command economy.
some interactions occur in a market economy.
33
A state government building a highway is an example of government fulfilling its duty as "Protector"?
False
True
34
What gives people and businesses the opportunity to make their own decisions?
economic freedom
economic equity
private property
profit motive
35
Which of the following statements BEST describes the purpose of the production possibilities curve?
It shows all possible combinations of goods/services that can be produced.
It predicts the future production of a nation.
It identifies trends in production.
It shows which products are most profitable.
36
Which of the following choices best describes what this production possibilities frontier is depicting?
alternative possibilities
cost of idle resources
opportunity costs
economic growth
37
Protections from layoffs, illnesses, injuries or disabilities falls under the goal of
economic growth
economic efficiency
economic security
economic equity
38
With voluntary exchange, a buyer and seller agree to do business together
to benefit neither
to benefit the buyer and the seller
to benefit only the buyer
to benefit only the seller
39
What is the incentive to improve material well-being by seeking to gain profit from economic activities?
legal equality
open opportunity
marginal benefit
profit motive
40
All of the following are disadvantages free enterprise capitalism EXCEPT
large supply-side tendencies.
uneven economic growth.
creation of wealth.
growing gap between rich and poor.
41
Which of the following is a disadvantage of a market economy?
It restricts creativity and new ideas for doing things.
It does not allocate resources as efficiently as possible.
It restricts personal freedom.
It sustains a high degree of uncertainty.
42
Three synonymous terms to describe the U.S. economic system are free enterprise, capitalism, and
free market
economic freedom
competition
free command
43
Which of the following are examples of needs?
clothing and pizza
clothing and Nike shoes
video games and food
food and clothing
44
What economic concept is represented by the photograph above?
scarcity
specialization
wealth
opportunity costs
45
What is the name of the federal health insurance program for senior citizens?
Medicare
Social Care
Social Security
Medicaid
46
Economic growth is an increase in a nation's output of goods and services over time.
True
False
47
An efficient use of scarce resources leads to
investment.
capital.
scarcity.
productivity.
48
Consumers waiting in a long line for a new product is an example of
scarcity.
consumer rights.
consumer responsibilities.
consumerism.
49
Into what four categories do economists divide factors of production?
resources, labor, money, capital
land, entrepreneurship, capital, labor
land, capital, money, entrepreneurship
entrepreneurship, resources, labor, money
50
Jacob gets a job at Target, which pays him an hourly wage in exchange for his labor. Jacob is participating in
the factor market.
capital market
entrepreneurship.
the product market
