ECONOMICS REVIEW UNIT 1

Question 1

A temporary economic problem, resulting in a lack of of a good or service in the SHORT term.

Accepted Answer

shortage

Question 2

The purpose of government in a command economy is to

Accepted Answer

make major economic decisions

Question 3

This occurs when the consumption or production of a good causes benefit to a 3rd party

Accepted Answer

positive externality

Question 4

What economic concept is Adam Smith describing?

Accepted Answer

specialization

Question 5

What does the term capital mean?

Accepted Answer

Resources that are used to make other good and services

Question 6

Division of labor is a characteristic of

Accepted Answer

assembly line production

Question 7

Who was a free market philosopher?

Accepted Answer

Adam Smith

Question 8

This is caused in the LONG term and is based on unlimited wants and limited resources.

Accepted Answer

scarcity

Question 9

The cost of the next next best alternative is called

Accepted Answer

opportunity cost

Question 10

What regime is a command economy most like?

Accepted Answer

communism

Question 11

This occurs when the consumption or production of a good causes HARM to a 3rd party

Accepted Answer

negative externality

Question 12

This kind of economy has both private ownership and industry regulation.

Accepted Answer

Mixed economy

Question 13

Which group ultimately determines the products that a free enterprise economy produces?

Accepted Answer

consumers and producers

Question 14

A trade-off is

Accepted Answer

all alternative choices that can be made

Question 15

A production possibilities graph looks at which of the following?

Accepted Answer

The opportunity cost of a decision

Question 16

Why do we use production possibilities graphs?

Accepted Answer

Allows us to look at different ways of using our resources

Questions 16