When one specializes to produce one good, and then trades additional goods from others.

both parties gain as a result of voluntary exchange.

What is the primary purpose of job specialization?

increased efficiency and productivity

As one of the factors of production/productive resources, capital can be defined as

the equipment and factories needed to produce goods.

The BEST explanation of why there will always be scarcity is because

while peoples' wants are unlimited, resources are limited.

Investment in education, training, and skill development has been linked to

increasing earnings for workers.

Companies like eBay, focus on voluntary exchange. Which BEST describes this type of commerce?

Decentralized decision-making buyers and sellers choose.

The option MOST LIKELY to increase earnings potential in the long-term is to

spend money for additional training and education.

Why is the consumer considered "king" in a capitalist economy?

consumers determine what products will be produced

In a market economy, prices are established by...

the interaction of supply and demand.

The opportunity cost of a move from point A to point B is

the decreased production of good Y.

Although specialization increases productivity, one disadvantage is

loss of flexibility among workers.

If everyone receives the same pay for all jobs, what happens to peoples' incentive to work?

People might feel less inclined to work.

In capitalist economies, prices are

determined by supply and demand.

The purpose of this production possibilities graph is to show

how few resources can be used to produce several items.

An opportunity cost is

next-best alternative you give up in order to do something.

A government that operates in a market economy MIGHT become involved in the economy

to provide public goods and services to its citizens.

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Fundamentals of Economics

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Questions 25

Answers

1
When one specializes to produce one good, and then trades additional goods from others.
neither party gains as specialization decreases productivity
neither party gains as specialization decreases efficiency.
both parties gain as a result of fraudulent exchange.
both parties gain as a result of voluntary exchange.
2
What is the primary purpose of job specialization?
increased efficiency and productivity
increased marginal utility
regional self-sufficiency
increased consumer income
3
As one of the factors of production/productive resources, capital can be defined as
the equipment and factories needed to produce goods.
the goods and services a business produces.
the supply of labor needed to produce goods.
the people that purchase goods and services.
4
According to the quote, the author MOST LIKELY agrees with the benefits of
specialization.
manorialism.
mercantilism.
taxation.
5
Workers concentrating their efforts on a limited number of tasks is called
sequestration.
homogenization.
specialization.
entrepreneurship.
6
The BEST explanation of why there will always be scarcity is because
people and their tools are inefficient.
governments create scarcity to keep people wanting more.
natural disasters create frequent shortages.
while peoples' wants are unlimited, resources are limited.
7
Investment in education, training, and skill development has been linked to
growing financial instability.
increasing earnings for workers.
decreasing political participation.
declining job satisfaction.
8
· ditch digger· computer programmer· international financier· ALL of these are examples of
skilled labor.
capital resources.
human resources.
unskilled labor
9
Economic system, the production of goods and services is controlled solely by supply and demand
command
mixed
market
communism
10
Researching the sports goods likely to sell. The knowledge gained in this is an example of
physical capital.
human capital.
allocation of resources.
labor.
11
Workers on an assembly line are an example of
entrepreneurs.
allocation.
homogenization.
specialization.
12
Companies like eBay, focus on voluntary exchange. Which BEST describes this type of commerce?
Centralized decision-making: buyers and sellers choose.
Decentralized decision-making buyers and sellers choose.
Centralized decision-making produces economic output.
Decentralized decision-making requires a large bureaucracy.
13
The option MOST LIKELY to increase earnings potential in the long-term is to
laterally transfer to a different job within his company.
spend money to renew current training.
spend money for additional training and education.
take a similar position with a different company.
14
Why is the consumer considered "king" in a capitalist economy?
consumers vote for elected government officials
consumers determine what products will be produced
consumers contribute to the factor market
consumers own the productive resources
15
In a command economy, how are the prices of goods and services determined?
business owners
the central government
independent agencies and independent regulators
market forces of supply and demand
16
In a market economy, prices are established by...
decree of government agencies.
consumers and labor unions.
the interaction of supply and demand.
businesses which buy and sell the products.
17
The opportunity cost of a move from point A to point B is
the decreased production of good X.
the increased production of D.
the decreased production of good Y.
the increased production of C.
18
Which of these terms is the BEST synonym for the word "entrepreneur"?
"business owner"
"student"
"home owner"
"employee"
19
Although specialization increases productivity, one disadvantage is
loss of flexibility among workers.
the loss of training time.
a reduction in wasted time.
higher costs in training workers.
20
If everyone receives the same pay for all jobs, what happens to peoples' incentive to work?
People might feel less inclined to work.
People might feel more inclined to work.
The incentive to work will not change.
There is no effect on the incentive to work.
21
An investment in improving the skill level of labor is considered an investment in
capital improvements.
improved technology.
entrepreneurship.
human capital.
22
In capitalist economies, prices are
set by the central government.
used to ensure social equality.
usually unfair.
determined by supply and demand.
23
The purpose of this production possibilities graph is to show
whether the supply of goods is elastic or not.
the number of workers required for a specific task.
how supply and demand determine price.
how few resources can be used to produce several items.
24
An opportunity cost is
is only an issue when there is not a scarcity of resources.
next-best alternative you give up in order to do something.
usually absent in a command economy.
when goods are recycled into other goods.
25
A government that operates in a market economy MIGHT become involved in the economy
to eliminate income inequality among its citizens.
to make sure all products are produced the same way.
to increase the profits of a specific company.
to provide public goods and services to its citizens.

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