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