Economics Unit 1 Concept Review

Question 1

Which involves using resources to produce the maximum amount of goods & services?

Accepted Answer

efficiency

Question 2

Adam Smith argued that a nation would be wealthier if it engaged in

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free trade

Question 3

Between 1867 and 1894, Karl Marx published a 3-volume study called

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The Communist Manifesto

Question 4

These are the motivating factors driving one to act a certain way

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incentives

Question 5

Government officials deciding the distribution of all resources is a feature of

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command economy

Question 6

According to Karl Marx, all of history is a struggle between

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classes

Question 7

The benefits and costs of a choice is shown using a

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decision-making grid

Question 8

A need is fulfilled by

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food

Question 9

Being guided by self-interest when making a decision means that you

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attempt to maximize utility

Question 10

In economic terms, laissez-faire means that the government

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stays out of the marketplace

Question 11

A normative economist might conclude that

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a lottery is a bad policy because it burdens the poor

Question 12

PPC is an acronym for

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production possibilities curve

Question 13

What is another name for the production possibilities curve?

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production possibilities frontier

Question 14

The addition of new resources often enables a nation to

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produce more goods and services

Question 15

The study of how people choose to use scarce resources to satisfy their wants is called

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economics

Question 16

A person who does not pay for a service but benefits from it is called a(n)

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free-rider

Question 17

The United States decides what goods to produce by letting

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the producers and consumers decide

Question 18

Which of the following best describes wants?

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unlimited and ever changing

Question 19

In a market economy, real power in the marketplace is held by the

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consumer

Question 20

A discussion on whether an economic practice is ethical would likely be found in an article on

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normative economics

Question 21

Absolute loyalty to the people in power is required by a(n)

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authoritarian system

Question 22

With voluntary exchange, a buyer and seller agree to do business together

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for the mutual benefit of both

Question 23

Which statement best contrasts capitalism and communism?

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Businesses own resources; governments own resources

Question 24

Benefits offered to encourage people to act in certain ways are

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incentives

Question 25

When creating a PPC, economists assume that

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technology is fixed

Question 26

The nation where government plays the most limited role in the economy is

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the United States

Question 27

Physical products that can be purchased are called

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goods

Question 28

Economic freedom is one of the chief advantages of a

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market economy

Question 29

An advantage of a pure market economy is that it

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allows local communities to set their economic development

Question 30

The human time, effort, and talent that go into the making of products is called

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labor

Question 31

Deciding to go to a ballgame rather than do your homework is an example of a(n)

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trade-off

Question 32

The governments of some nations answer the question of what to produce to

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control the economy

Question 33

The condition in which economic resources are not being used to their full potential is called

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underutilization

Question 34

Harvesting less apples than the land is capable of producing is an example of

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underutilization

Question 35

Which of the following explains economics as it is, not as it should be?

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positive economics

Question 36

In a communist economy, resources are owned by

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government

Question 37

A society with a large unskilled labor force will most likely produce

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labor-intensive farming methods

Question 38

One way payments made by the federal government to individuals via social programs.

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Transfer payments (in-kind benefits)

Question 39

The government owns some, but not all, factors of production in a(n)

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socialist system

Question 40

Public goods are funded by

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taxes collected by the government

Question 41

A form of authoritarian socialism is

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communism

Question 42

Any point outside the curve/frontier of a PPC represents a goal that is

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impossible to meet because resources are fixed

Question 43

With capitalism, investment is driven by

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private parties seeking profits

Question 44

This refers to the side effects of economic decision making

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Externalities

Question 45

When a nation's economy privatizes it changes from

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government ownership to private ownership

Question 46

With capitalism, income distribution is determined by market forces

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that reward productivity

Question 47

The value of what you give up by choosing one alternative over another is called

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opportunity cost

Question 48

In today's world, there are

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no pure market economies

Question 49

Which is not considered a need?

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television

Question 50

Moving steel mills from private ownership to public ownership is an example of

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nationalization

Question 51

With capitalism, the allocation of goods and resources is determined by

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market forces

Question 52

In the United States, harvest-time customs represent the influence of a

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traditional economy

Question 53

The situation where women tend crops and raise children, while men hunt is often found in a

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traditional economy

Question 54

Using a PPC can help to increase a company's

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efficiency

Question 55

Opportunity costs would be increased by

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increasing the production of a product

Question 56

The satisfaction received from using one more unit of a good or service is called

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marginal benefit

Question 57

Into what four categories do economists divide factors of production?

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land, labor, capital, and entrepreneurship

Question 58

A market failure occurs when people who are not part of the marketplace interaction

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benefit from it

Question 59

The alternative you give up when you make an economic choice is a(n)

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trade-off

Question 60

The socioeconomic goal of providing protections against economic risk

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economic security

Question 61

An example of a trade-off is

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giving up going to a movie to spend time shopping

Question 62

An example of underutilization is producing

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as many muffins & televisions as the economy is capable

Question 63

The socioeconomic goal of constantly increasing the economy's value (GDP)

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economic growth

Question 64

Who wrote The Wealth of Nations?

Accepted Answer

Adam Smith

Economics Unit 1 Concept Review

Questions 65

Economics Unit 1 Concept Review

Questions 65