If the price of a substitute to good X decreases, then:

the demand for good X will decrease

A category 5 hurricane hits Florida wreaking havoc with the orange crop. This causes the:

supply curve for orange juice to shift left, price to rise

Oligopoly is a market structure in which:

a small number of firms compete

The difference btwn a private & a public good is an individual's consumption of a public good:

Doesn't take away from another's use of the same public good

Two advantages that a market economy has over a command economy are:

more freedom & more efficiency for producers & consumers

People overcame the obstacle of economic transactions requiring a double coincidence of wants:

by examining the emergence of money as a medium of exchange

What will happen in the future if this nation currently operates at point A?

More capital goods will be made adding to economic growth

The law of demand implies holding everything else constant that as the price of books increases

the quantity of books demanded will decrease

Which of the following provides the BEST definition of an opportunity cost?

The value of the best alternative not chosen

What will be produced, how it will be produced, and for whom will it be produced are:

the fundamental economic questions all economies must answer

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Economics Units 1 & 2 Review

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Questions 20

Answers

1
The study of how firms, nations, and individuals can BEST allocate their limited resources:
circular economic activity
supply and demand analysis
economics
factoring production
2
If the price of a substitute to good X decreases, then:
the demand for good X will decrease
the market price of good X will decrease
the demand for good X will increase
the demand for good X will not change
3
Refer to the graph. If Price is $10, quantity supplied would be:
60 videos
20 videos
50 videos
30 videos
4
A category 5 hurricane hits Florida wreaking havoc with the orange crop. This causes the:
supply curve for orange juice to shift right, price to fall
supply curve for orange juice to shift right; price to rise
supply curve for orange juice to shift left, price to fall
supply curve for orange juice to shift left, price to rise
5
Refer to the graph. A legally binding price ceiling would exist at a price of:
$3
$2
None of the above
$4
6
Oligopoly is a market structure in which:
one firm produces a unique product
many firms produce a slightly differentiated product
a small number of firms compete
many firms produce an identical product
7
We are forced to make choices because:
not everything is limited
we live in a democracy
shortages are a constant situation
all resources are limited
8
Refer to the graph. In this market, equilibrium price and quantity would be:
$8; 30
$4; 50
$4; 30
$6; 40
9
What are the types of economic systems?
Market, mixed, command
Non-market, mixed, command
Free, communist, mixed
Production, market, command
10
The flow of resources from consumers to producers is illustrated by the path from:
4 to 2
5 to 7
8 to 6
1 to 3
11
The difference btwn a private & a public good is an individual's consumption of a public good:
Doesn't take away from another's use of the same public good
Causes a decrease in the price of other public goods
Takes away from another's use of that same public good
Causes tax rates to decrease
12
Two advantages that a market economy has over a command economy are:
more security & more equity for producers & consumers
more limits on profits & more public goods
more freedom & more efficiency for producers & consumers
more control over prices & wages
13
People overcame the obstacle of economic transactions requiring a double coincidence of wants:
by examining the emergence of money as a medium of exchange
by examining the emergence of money as a store of value
by the emergence of labor as a factor of production
by examining the emergence of land as a factor of production
14
Higher prices and government regulations are both strategies for:
aiding entrepreneurship
encouraging economic equity
dealing with scarcity
increasing consumption
15
The flow of goods and services to consumers is illustrated by:
6 to 1
2 to 5
4 to 2
8 to 6
16
What will happen in the future if this nation currently operates at point A?
More capital goods will be made adding to economic growth
More goods will be made, so economic growth will be reduced
Fewer goods will be made, so the curve will shift left
Fewer capital goods will be made to satisfy consumer demand
17
The law of demand implies holding everything else constant that as the price of books increases
the quantity of books supplied will increase
the quantity of books demanded will increase
the quantity of books supplied will decrease
the quantity of books demanded will decrease
18
Which of the following provides the BEST definition of an opportunity cost?
The act of giving up one thing to obtain another.
Giving up something for an item of lesser value
The exchange of goods
The value of the best alternative not chosen
19
As a public service, police protection may be used by:
Citizens only
Anyone who needs the service
Taxpayers only
Anyone who pays service fees
20
What will be produced, how it will be produced, and for whom will it be produced are:
the ways to influence prices
the ways governments deal with scarcity
the fundamental economic questions all economies must answer
the ways to determine inflation

Economics Units 1 & 2 Review Flashcards | StudBud