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Economics Review 1 of 3 Flashcards | StudBud
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Economics Review 1 of 3
Economics Review 1 of 3
20 terms
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Review for Exam covering Basics, Econ systems, Supply/Demand.
Flashcards
20 cards
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Practice quiz
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Questions
20
Answers
1
Which of the following is a main feature of a command economy?
Heavy reliance on markets
Central planning
Profit driven decision making
Private ownership
2
Which of the following countries exhibit the characteristics of a market economy?
China
United States
Cuba
North Korea
3
In a market economy, what determines the price and quantity of most goods produced?
Quality of goods
Substitute goods
Economic policies
Supply and demand
4
In every economic system, what must people choose to do?
Satisfy all the wants of their society
Save money to reduce the national debt
Make the best use of scarce resources
Create an equal distribution of income
5
Which of these would cause an outward shift in demand?
Effective advertising
All of these
Lower production costs
Increased taxes
6
There is a country in which the gov't owns all the industries, businesses, and farms.What of economy does this describe?
Command
Transitional
Market
Traditional
7
Sugar is an input in making cookies. If the price of sugar decreases, what would to happen to the supply of cookies?
Increases
Disappears
Decreases
No change
8
Which characteristic best describes a traditional economy?
Communism and inflation
Labor unions and wages
Customs and religions
Markets and systems
9
In a market economy, what is the government’s role?
Encourage competition among businesses
Sets prices on goods and services
Owns and operates major industries
Decides what goods are manufactured
10
What is the most basic economic issue for all societies?
Scarcity
Recession
Taxation
Inflation
11
What is the primary incentive that motivates a manufacturer to sell a product?
Reputation of the product
Putting others out of business
Pleasing the government
Making profits on sales
12
What is the economic system in which customs and religion determine how the economy will use its scarce resources?
Command
Traditional
Transitional
Market
13
Which of these actions would most likely result in a decrease in consumer spending?
Decreasing the reserve requirement
Increasing income taxes
Decreasing the interest rate
Increasing government spending
14
If a government sets a maximum price for a good or service, what does it create?
Inflated price
Price ceiling
Price floor
Illegal price
15
In economic terms, what are land, labor, capital and entrepreneurship?
Factors of production
Production possibility
Production trade-offs
Opportunity costs
16
What is the most likely to happen when consumers want to buy more scooters than the store has available for sale?
Profit on scooter sales will be smaller
Price of the scooter will increase
Manufacturers will stop making it.
Stores will make a different model.
17
. On a supply and demand graph, what is the point called at which quantity demanded equals quantity supplied?
Surplus
Shortage
Equidistant
Equilibrium
18
In a market economy, when consumers and producers act in their own self-interest, which is most likely to be the result?
The individuals or businesses will lose money no matter what they sell
The consumer will pay high prices for goods and services.
The producers are likely to earn a profit making products people want.
The market will have less variety and fewer products will be made.
19
What is the benefit of competition in a free market system?
Cause producers to try to put each other out of business
Follow the traditional methods of production
Create a variety of new and cheaper products
Make sure everyone gets an equal share of resources
20
A hurricane hit Florida and destroyed half of the orange crop. What would most likely happen to the orange market?
The price of oranges will increase
Demand for oranges will rise
The price of oranges will fall
Supply of oranges will increase
