Circular Flow Model shows

flow of money and resources/goods in an economy

Why would voluntary exchange tend to raise a nation's overall standard of living?

People are more likely to innovate when they have incentives

Which is a disadvantage of a centrally planned economy?

The government has control over what people can consume

What is human capital (entreprenurship)?

The accumulated knowledge and skills of human beings

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Unit 1 Review

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Econ Unit 1 Test Review

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Questions 15

Answers

1
Define profit motive
task that a businesses perform
a person's incentive to work to gain
clothing
a business owned by one person
2
What is economics?
money remaining from revenues after expenses are paid
The study of how goods/ services are produced, and consumed
sales
the study of the government
3
Which lists economic systems in order from least to most flexible
controlled, mixed, free market
free market, mixed, controlled
mixed, controlled, free market
free market, controlled, mixed
4
Circular Flow Model shows
supply and demand
government involvment in an economy
flow of money and resources/goods in an economy
the production possibilies of an economy
5
Which is the best example of a capitalist nation?
North Korea
Soviet Union
Canada
The Amish community
6
Product Market is where what is bought and sold?
resources (land, labor, capital)
goods/services
businesses
government products
7
Why would voluntary exchange tend to raise a nation's overall standard of living?
It allows the upper class to run the economy efficiently
People are less likely to assume to risk of entrepreneurship
People are more likely to innovate when they have incentives
It allows the government to control means of production
8
Which is a disadvantage of a centrally planned economy?
The government has control over what people can consume
It is difficult to make changes quickly
Items are produced solely for profit
It does not help the less wealthy obtain goods and services
9
Any point inside the PPC represents what
Impossible
Inefficiency
Efficiency
Model
10
Which economic system provides the most economic freedom?
Traditional
Free market
Command
Socialism
11
What is human capital (entreprenurship)?
physical effort by humans in their work
The accumulated knowledge and skills of human beings
human effort
economic wants
12
Communist Cuba leaned mostly towards which type of economy?
Free Market
Controlled (Planned)
Capitalist
Traditional
13
PPC shifts outwards due to
the decrease in unemployment
no investment in human capital
economic growth
recession
14
Opportunity cost is
the same thing as trade-offs
the next best option
all your other options
the best option
15
Which of these are not the 4 factors of production?
Employees
Land
Captial
Labor

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