The purpose of a production possibilities graph is to

show alternative ways to use an economy's resources

Which statement describes a public good?

the benefit to the public is worth the cost to government

Which is NOT an example of capital at a book printing company?

the men and women who work in the accounting office

Each point on a production possibilities curve shows

efficient utilization of resources

Negative externalities are present when

there has been a market failure

The main goals of the government in attempting to keep the economy running smoothly are

high employment, steady growth, and stable prices

Economics is the study of how people

choose from limited resources to meet their needs

exchange things we have for things we want or need

Physical objects such as clothes or shoes.

Entrepreneurs are people who

use land, labor, and capital to create new business

The effort that people devote to a task and are paid

Human-made resource that is used to create goods or services

Scarcity always exists because

our needs and wants are not limited, but resources are

study of the behavior and decisions of entire economies.

suppliers cannot produce enough goods at current cost

How does specialization affect an economy?

It prevents duplication of effort

study of the behavior and decision making of small units

Natural resources that are used to make goods and services

The circular flow model of the economy shows

only how firms and households interact

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Economics Unit 1 review

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Unit 1

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Questions 36

Answers

1
The purpose of a production possibilities graph is to
tell farmers how many watermelons to plant
give engineers a new way to build manufacturing plants
show how a factory can use its workers in different ways
show alternative ways to use an economy's resources
2
Which statement describes a public good?
the benefit to the public is worth the cost to government
it is commercially viable
Everyone who uses it pays for it
funded by the private sector without government incentives
3
Which economic goals are difficult to achieve in a pure market system?
freedom and equity
equity and security
innovation and security
efficiency and freedom
4
Which is NOT an example of capital at a book printing company?
the office building where the printing company is located
the men and women who work in the accounting office
the oil used to heat the factory
the paper on which books are printed
5
Which point corresponds to the highest opportunity cost for producing one more unit of Butter?
B
C
D
A
6
Each point on a production possibilities curve shows
underutilization of resources
potential for future growth
the relationship of shortage and scarcity
efficient utilization of resources
7
Negative externalities are present when
there has been a market failure
the government controls what is produced
the economy is in recession
consumers do not purchase as much as expected
8
All resources we use to produce goods and services with are
efficient
recyclable
expensive
scarce
9
The main goals of the government in attempting to keep the economy running smoothly are
well-regulated banks, slow growth, and low prices
high interest rates, steady growth, and regulated prices
high employment, steady growth, and stable prices
rapid business cycles, rapid growth, and fair prices
10
Which point(s) on the diagram represent an economy that is performing inefficiently?
D
?
A
X
11
Economics is the study of how people
choose from limited resources to meet their needs
respond to war and drought
calculate their income tax
gain knowledge and skills from study and experience
12
Markets allow us to
exchange things we have for things we want or need
sell the most goods we possibly can
get the highest prices for what we sell
get the lowest prices for what we buy
13
The doctrine that governments should not intervene in the marketplace is called
the invisible hand
the trade-off doctrine
laissez faire
socialism
14
Which point(s) on the diagram are unobtainable for this economy?
?
X
A
D
15
Which point(s) on the diagram represent an economy that is performing efficiently?
X
D
A
?
16
Goods
Human-made resource that is used to create goods or services
The effort that people devote to a task and are paid
Physical objects such as clothes or shoes.
Natural resources that are used to make goods and services
17
Entrepreneurs are people who
help settle labor disputes
work on the floor of a stock exchange
produce all of a countries guns and butters
use land, labor, and capital to create new business
18
Self-interest
when one selects a trade-off
An alternative we sacrifice when we make a decision
One’s own personal gain
of the behavior and decision making of entire economy
19
Labor
The effort that people devote to a task and are paid
Natural resources that are used to make goods and services
Physical objects such as clothes or shoes.
Human-made resource that is used to create goods or services
20
The value of the goods and services produced by an economy is called
the study of macro economics
the gross domestic product
the business cycle fluctuation
the study of microeconomics
21
Which of the following is an example of a public good?
milk
bridge
skyscrpaer
car
22
Capital
Human-made resource that is used to create goods or services
Natural resources that are used to make goods and services
The effort that people devote to a task and are paid
Physical objects such as clothes or shoes.
23
Scarcity always exists because
our needs and wants are not limited, but resources are
there are more poor people than rich people
machines and people are inefficient
changes have occurred in the global weather pattern
24
The skills and knowledge gained by a worker through education and experience are
physical capital
entrepreneurial
human capital
production possibility
25
Macroeconomics
study of how people seek to satisfy their needs and wants
study of the behavior and decisions of entire economies.
central government makes decisions on goods and services.
study of the behavior and decision making of small units
26
Using resources in such a way as to maximize the production of goods and services is called
underutilization
thinking at the margins
efficiency
growth
27
The government decides which goods and services will be produced in a
command economy
mixed economy
fluctuating economy
market economy
28
Shortages occur when
the U.S. imports more than it exports
many people are unemployed
suppliers cannot produce enough goods at current cost
interest rates go up
29
Giving up one alternative for another is called
a trade-off
efficiency
underutilization
human capital
30
A country's production possibilities will grow if it
produces more guns than butter
lowers its opportunity costs
increases its resources
makes more trade offs
31
How does specialization affect an economy?
It results in more innovation
It makes the economy less efficient
It prevents duplication of effort
It discourages entrepreneurs
32
Microeconomics
study of the behavior and decisions of entire economies.
central government makes decisions on goods and services.
study of how people seek to satisfy their needs and wants
study of the behavior and decision making of small units
33
The resources used to make goods and services are called
the production possibilities frontier
opportunity cost
the gross national product
factors of production
34
The choice between military or consumer goods is called
farm goods or factory goods
a free market economy
export or import
guns or butter
35
Land
The effort that people devote to a task and are paid
Physical objects such as clothes or shoes.
Human-made resource that is used to create goods or services
Natural resources that are used to make goods and services
36
The circular flow model of the economy shows
how government and households interact
how much of a good a business can produce
how taxes and profits are relates
only how firms and households interact

Economics Unit 1 review Flashcards | StudBud