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Economics Chapters 1-3 Review Flashcards | StudBud
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Economics Chapters 1-3 Review
Economics Chapters 1-3 Review
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1
Which type of economic system is the gov. most likely to provide people with goods/services they couldn't afford?
command economy
free enterprise economy
market economy
traditional economy
2
Refer to the production possibilities curve. What does moving from point b to c require?
a decrease in unemployment
producing less civilian goods to boost the production of military goods
technological change
producing less military goods to boost the output of civilian goods
3
What is the value of all final goods and services a country produces in a year (most comprehensive measure of output)?
standard of living
cost-benefit analysis
financial capital
gross domestic product
4
Which of the following factors of production involve taking risks and combining resources to produce a good or service.
entrepreneurship
labor
capital
land
5
An efficient use of scarce resources leads to
investment.
scarcity.
productivity.
capital.
6
Jacob gets a job at Target, which pays him an hourly wage in exchange for his labor. Jacob is participating in
the product market
capital market
entrepreneurship.
the factor market.
7
A circular flow model shows how
some interactions occur in a command economy.
all interactions occur in a market economy.
all interactions occur in a traditional economy.
some interactions occur in a market economy.
8
Why is economic growth an important goal of the United States?
It leads to price stability.
To better satisfy the wants and needs of a growing population.
It is the only way to achieve economic equality.
Americans have a strong sense of fairness.
9
Actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of
opportunity costs.
trade-offs.
economic interdependence.
specialization.
10
A general rise in the level of prices over time is
profit.
inflation.
a catalyst.
voluntary exchange.
11
Consumers waiting in a long line for a new product is an example of
consumerism.
scarcity.
consumer responsibilities.
consumer rights.
12
Three synonymous terms to describe the U.S. economic system are free enterprise, capitalism, and
economic freedom
free market
free command
competition
13
Economics is BEST defined as the study of how societies deal with
the factors of production.
the paradox of wealth.
the division of labor.
the problem of scarcity.
14
What is an American incentive that gives people the right to work, save, invest, and get ahead?
competition
economic interdependence
voluntary exchange
private property rights
15
What are the three basic questions about the production of goods all societies are faced with?
what, how, and why
when, where, and for whom
What, how, and for whom
what, where, when
16
Is it possible for this country to produce $5 billion worth of military goods, and $9 billion dollars of civilian goods?
No, there are not enough resources.
No, this country doesn't need that many civilian goods.
yes, as long as it fits on the graph, it can be produced.
Yes, and they would have resources left over.
17
How does the government operate in a free enterprise economy?
It interferes with businesses only when it is profitable.
It tells businesses what to produce and what to sell.
It takes a "hands-off" approach.
It establishes laws and rules to maintain competition.
18
All of the following are weaknesses of a command economy EXCEPT that it
can change direction drastically in a short time.
provides few incentives for people to work hard.
lacks the flexibility to deal with minor problems.
requires a large decision-making bureaucracy.
19
Which of the following is a disadvantage of a market economy?
It restricts creativity and new ideas for doing things.
It sustains a high degree of uncertainty.
It does not allocate resources as efficiently as possible.
It restricts personal freedom.
20
What is the name of the federal health insurance program for senior citizens?
Medicare
Social Care
Medicaid
Social Security
21
Protections from layoffs, illnesses, injuries or disabilities falls under the goal of
economic growth
economic equity
economic security
economic efficiency
22
Which of the following choices best describes what this production possibilities frontier is depicting?
economic growth
alternative possibilities
cost of idle resources
opportunity costs
23
Which of the following are examples of needs?
clothing and pizza
video games and food
clothing and Nike shoes
food and clothing
24
Why are consumers powerful?
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.
25
The minimum wage is an example of a federal law that supports
economic efficiency.
economic growth.
full employment.
economic equity.
26
What type of economy is the most prevalent in the world today?
traditional
mixed
command
market
27
Identify which of the following would be an example of capital.
digging a ditch
apple tree
oven
cotton field
28
Which of the following is a major advantage of a market economy?
It can change direction rapidly as needed when markets change.
People are likely to be offered goods and services they cannot afford.
There is sufficient government control of production and distribution.
There is a high degree of individual freedom.
29
What would a business use to decide whether a certain action is worth the cost?
circular flow model
cost-benefit analysis
needs assessment
production possibility comparison
30
Markets in the free enterprise system are seldom regulated by
consumers.
entrepreneuers.
the government.
business.
31
Which statement describes why the people in a nation w/ a command economy might resist a shift to a free market economy?
Workers are reluctant to accept complete gov. control of their economy.
People who hold political power are threatened by fundamental changes.
Workers are reluctant to give up their participation in a classless society
Factories are reluctant to place their capital under work authority.
32
A state government building a highway is an example of government fulfilling its duty as "Protector"?
True
False
33
What is the struggle among sellers to attract consumers by offering the best products at the lowest prices?
voluntary exchange
private property
profit motive
competition
34
What economic concept is represented by the photograph above?
opportunity costs
specialization
wealth
scarcity
35
Which of the following explains why products made under a command economy are more likely to be low quality?
The workers are not given quality-control guidelines.
The workers have little incentive to make them well.
The workers are left to manage production facilities on their own.
The workers are forced by tradition to use old-fashioned methods.
36
All of the following are disadvantages free enterprise capitalism EXCEPT
large supply-side tendencies.
growing gap between rich and poor.
creation of wealth.
uneven economic growth.
37
With voluntary exchange, a buyer and seller agree to do business together
to benefit only the buyer
to benefit neither
to benefit the buyer and the seller
to benefit only the seller
38
What gives people and businesses the opportunity to make their own decisions?
profit motive
economic equity
economic freedom
private property
39
Some necessities have little value while some necessities have a much higher value is known as
paradox of value
opportunity cost
economic interdependence
trade-offs
40
Economic growth is an increase in a nation's output of goods and services over time.
False
True
41
The study of economics is important because it enables us to
to become better decision makers.
understand a free enterprise economy
all of the above
understand how wages are earned and spent and how jobs are created.
42
What role is the government playing in a free market economy when they ensure safety in air transportation?
regulator
consumer
protector
provider
43
Into what four categories do economists divide factors of production?
land, capital, money, entrepreneurship
land, entrepreneurship, capital, labor
entrepreneurship, resources, labor, money
resources, labor, money, capital
44
Division of labor is important because
companies do not want workers to talk to one another.
it increases efficiency by ensuring all workers become good at every task.
it prevents specialization.
it increases efficiency by ensuring workers become good at specific tasks.
45
What is the incentive to improve material well-being by seeking to gain profit from economic activities?
marginal benefit
open opportunity
legal equality
profit motive
46
Which of the following describes a disadvantage of a traditional economy?
new ways of doing things are discouraged
individuals have freedom to produce what they want
difficult decisions are made by the state
everyone knows his or her role
47
Which of these economic systems have the least in common?
command economy and socialism
free enterprise economy and market economy
market economy and capitalism
command economy and capitalism
48
What does the saying "There is no such thing as a free lunch" mean?
some things cost nothing
most things cost nothing
everything costs something
most things cost something
49
Which of the following statements BEST describes the purpose of the production possibilities curve?
It shows all possible combinations of goods/services that can be produced.
It identifies trends in production.
It predicts the future production of a nation.
It shows which products are most profitable.
50
There is more government regulation in a market economy than a command economy.
False
True
