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Unit 1 Review
Unit 1 Review
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Questions
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Answers
1
Consumers in the free enterprise economy ultimately determine ____________ to produce
how
when
what
where
2
Struggle among sellers to attract consumers leading to innovation and lower prices
Perverse Incentives
competition
Voluntary exchange
profit motive
3
Who can invest in Human Capital in a modern economy?
Government
Businesses
All of the Above
Individuals
4
Which of the following is a disadvantage of a market economy?
Some people, like old people, get left out
It does not allocate resources efficiently as other types of economies.
It restricts personal freedom.
It discourages creativity and new ideas for doing things.
5
System in which economic activity is the result of ritual, habit, or custom
market economy
traditional economy
command economy
mixed economy
6
Evaluating the costs and benefits of each choice to decide which meets your criteria. These are called?
priorities
opportunities
Trade-offs
resource frontiers
7
System that has some combination of traditional, command, and market economies
mixed economy
command economy
traditional economy
market economy
8
Which of the following states an advantage of a traditional economy?
Property rights are based on tradition.
Creativity and original thoughts are rewarded.
There's no bureaucracy to interfere with organizing the economy
Everyone knows exactly what their function is.
9
the cost incurred by not enjoying the benefit associated with the best alternative choice.
Utility
Opportunity Cost
Scarcity
Specialization
10
Consumers are powerful because
their interests force producers to behave ethically
they help decide a business's opportunity costs
they drive decisions about what to produce
they have more rights than corporations
11
Which of the factors of production involves taking risks and combining resources to produce a new good or service?
Entrepreneurs
Labor
Land
Capital
12
Economic action done or brought about by free choice
Voluntary exchange
Perverse Incentives
competition
profit motive
13
What kind of economy offers uniformity in wages regardless of occupation or individual productivity?
traditional economies
command and socialist economies
market and free-enterprise economies
all economies
14
System in which economic activity is driven by supply, demand, and the price system
command economy
traditional economy
market economy
mixed economy
15
Driving force that encourages people to improve their material well-being
Perverse Incentives
competition
profit motive
Voluntary exchange
16
System in which factors of production are owned and directed by the state
mixed economy
market economy
traditional economy
command economy
17
The four factors of production are land, labor, capital, and ___________.
franchises
entrepreneurs
the government
inflation
18
Which of these is an accurate statement about mixed economies today?
Most nations that had a mixed economy have evolved into command economies
Mixed economies exist mostly in nations with communist governments.
Very few economies today can be accurately described as "mixed".
There are more mixed economies in the world than any other kind.
19
Which of these countries has an economy most similar to that of the former Soviet Union?
Sweden
South Korea
Norway
North Korea
20
Fundamental economic problem that forces consumers and producers to use resources wisely
Utility
Opportunity Cost
Scarcity
Specialization
21
A nations wealth is determined by its
accumulation of all tangible resources
natural resources
accumulation of all tangible and intangible resources
product possibilities frontier
22
Societies are faced with which three basic question about production of goods
What, How, and Why
What, Where, and When
What, how, and for whom
When, where, and for whom
23
A __________ is NOT a basic requirement for Survival
Value
Utility
Need
Want
24
each worker learns one task very well
Utility
Opportunity Cost
Specialization
Scarcity
25
Someone who organizes and manages land, capital, and labor to make a profit
Human Capital
entrepreneur
Scarcity
Dictator
26
One of the characteristics of a capitalist free enterprise economy is __________.
incentives
voluntary exchange
the minimum wage
consumerism
27
Which of the following helps determine somethings value
scarcity
Both Utility and Scarcity
beauty
utility
28
Which Statement describes a disadvantage of a command economy?
It cannot "change direction" easily if the need arises to do so.
The government can produce things that people don't need or want
Items tend to be produced solely for the sake of profit.
It does not help the less fortunate obtain the goods and services they need
29
Which of these economic systems have the LEAST in common?
free-enterprise economy and market economy
command economy and socialism
command economy and capitalism
market economy and capitalism
30
The study of economics involves
explains how incomes are earned and how jobs are created
studying how things are made, bought, sold, and used
explaining how people deal with scarcity
all of the above
31
Which of these statements is descriptive of a market economy?
Major economic decisions are made for individuals, not by them.
Major economic decisions are made by individuals, not for them.
The Government determines what is produced and by whom.
Most media is state-owned and operated.
32
Paradox of Value refers to the
contradiction between gross domestic product and market value
high value of a nonessential item and the low value of an essential item
contradiction of what consumers want and what they need
high value of an essential item and the low value of a nonessential item
33
The total satisfaction received from consuming a good or service
Specialization
Utility
Opportunity Cost
Scarcity
34
accumulation of all tangible and transferable resources
Price
Wealth
Cost
Value
35
The skills, knowledge, and experience possessed by an individual or population.
Dictator
entrepreneur
Human Capital
Scarcity
36
The United States is a mixed Economy that leans more toward a __________ based approach
Traditional
Communist
Market
command
37
Which of the following descriptions best explains the meaning of opportunity costs?
the cost of business failure
the risk associated with producing a new item
the initial cost of starting a new buisness
the cost of choosing one alternative over another
38
has an unintended and undesirable result that is contrary to the intentions of its designers
Voluntary exchange
competition
profit motive
Perverse Incentives
