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Economics Unit 1 Review Flashcards | StudBud
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Economics Unit 1 Review
Economics Unit 1 Review
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1
An economy producing the maximum amount of goods and services is
growing
trading off
underutilized
efficient
2
Which of the following is a major reason the standard of living in Japan is much higher than in Nigeria?
fewer temporary shortages
richer natural resources
greater human capita
more foreign residents
3
What do people supply in return for factor payments?
innovation, profit, or goods
land, labor, or capital
services, goods, or traditions
innovation, labor, or trade
4
Ocean waves can be used to generate energy. Ocean waves are considered which type of resource?
nonrenewable
perpetual
renewable
capital
5
Economists assume people choose something when its expected costs are less than its
working life
chief competitors
required maintenance
anticipated benefits
6
In the circular flow model, which of these is a factor payment?
the hourly wage a store pays to a clerk
the credit card charge for ordering games online
the check someone writes to buy groceries
the monthly mortgage on a house
7
Economics is _______________________.
The study of how business operate and get consumers to buy their products
The study of how people seek to satisfy their wants&needs by making choice
The study of how scarce resources can be increased through efficiency
The study of how people make money
8
How does division of labor increase productivity?
Workers move often from job to job.
Workers become expert at one task.
Workers require minimal training
Workers can be paid a lower wage.
9
What does it mean to maximize utility?
to become as efficient as possible
to strengthen the skills of a workforce
to gain the most satisfaction possible
to strengthen a national infrastructure
10
the idea that many decisions involve choices about using or doing a little more or a little less of something
Economic Enigmas
Scarcity Forces Trade-offs
Costs vs. Benefits
Thinking at the Margin
11
What does Adam Smith’s idea of an “invisible hand” represent?
the economic role of governments
the concern of people for one another
the way that markets coordinate trade
the divine oversight of human affairs
12
Why are economies most efficient when they have full employment?
No productive resources are left unused
Unemployment offices can be closed.
No one person has to work too hard.
Wages are spent for consumer goods
13
Which of the following has a command economy?
South Korea
Finland
The United States
North Korea
14
Which type of economy is most common today?
command
mixed
market
traditional
15
How does trade increase the value of an item?
It makes the item more expensive to buy.
It provides work for storekeepers and truckers.
It puts more different goods into competition.
It transfers the item to someone who values it more
16
Which type of economy is rooted in ancestral traditions?
traditional
command
mixed
market
17
Which of these statements is an example of normative economics?
Taxes ought to be lowered.
The bond market is in decline
Speculation caused a recession
Inflation is higher this year
18
Which of these terms is most closely related to tradeoffs?
margin
markets
scarcity
incentives
19
A company’s office buildings and the equipment it uses are both examples of
labor
capital
land
opportunity cost
20
Why might some historians consider Adam Smith one of the most influential people in history?
He wrote the economic argument for American independence.
He taught that all people should be economic equals
He argued for a larger role for the government in the economy
He introduced a way of thinking about economic ideas
21
the condition that results because ___________ people have people have limited resources but unl
Shortage
Scarcity
Socialism
Supply
22
People who decide how to combine resources to create new goods or services in hopes of making a profit are called
educators
economists
scientists
entreprenuers
23
The belief that the government should not interfere in economic affairs is known as
laissez-faire
eminent domain
habeas corpus
popular sovereignty
24
Which of these is the main reason for national differences in comparative advantage in producing raw materials?
differences in allocations of natural resources
differences in cultural traditions
differences in local business practices
differences in monetary systems
25
People’s wants are unlimited. This fact means that which of the following is always present?
costs of production
shortages
scarcity
marginal utility
26
Each society answers the three basic economic questions based on
its degree of economic growth.
its unique combination of values and goals.
the number of factor payments
the desire to achieve economic freedom
27
Which of the following is an example of using physical capital to save time and money?
updating equipment
hiring more workers
lowering workers’ wages
switching from oil to coal
28
Which of the following is not a market?
a high school classroom
a large appliance store
a neighborhood garage sale
an online auction site
29
What is the best test of an economic model?
It helps people make decisions more easily.
It has gone unchallenged for decades.
It is accepted by both liberals and conservatives.
It is useful for both explaining past events and predicting future ones.
30
What is represented by Point B in the Factor Market?
government expenditures
the marginal cost of goods
the flow of resources
the flow of money
31
Which statement is the best example of thinking at the margin?
Mary observes that the average cost of shoes is higher than last year.
Jane wants to buy a car but decides she cannot afford the insurance.
John has six shirts and is trying to decide whether to buy a seventh
David decides to volunteer this summer instead of working for pay.
32
What does it mean to say that free markets are efficient?
Everyone is assured of getting basic necessities
Buyers and sellers trade until both are satisfied
Decisions are made quickly with little confusion
Information is communicated around the world.
33
Which term best describes the fact that we depend on others to produce most of the goods and services we want?
commercial productivity
economic interdependence
absolute advantage
division of technology
34
an arrangement that brings buyers and sellers together to do business with each other
co dependence
no free lunch principle
market
markets-coordinate-trade principle
35
Which is the best example of specialization?
A surf shop lowers the price on swimsuits.
A dry cleaner spends extra time on grease spots.
An assistant in a tailoring shop only replaces zippers.
An assistant in a tailoring shop only replaces zippers.
36
The economic principle that people are motivated by something to take a particular course of action.
Costs vs. Benefits
Incentives Matter
Markets Coordinate Trade
Future Consequences Count
37
a puzzle or riddle that may be explained through economic analysis
claim
puzzle
enigma
hypothesis
38
What is represented by Point A in the Product Market?
the marginal cost of goods
the flow of resources
the flow of money
government expenditures
39
What is the main reason Americans specialize more today than the early pioneers did?
We live in less crowded conditions.
We depend less on transportation.
We have more access to markets.
We have more vocational training.
40
In a voluntary exchange, why do people give something up?
to allocate scarce resources fairly
to increase their self-sufficiency
to get something they want more
to comply with state requirements
41
What is the law of unintended consequences?
Actions often have unforeseen effects
Economic booms are always followed by downturns.
Markets are always influenced by emotional factors
Attempts to intervene always backfire.
42
Which of the following is a characteristic of a market economy?
strong government planning
unrestricted competition
an oversupply of labor
price control systems
43
the branch of economics that applies value judgments to data in order to recommend actions or policies.
microeconomics
predictable economics
macroeconomics
normative economics
44
Which of the following statements is most accurate?
Govt intervention can be useful because the marketplace cannot always
free market ALWAYS is able to meet the needs of a modern society.
The federal gov't is ALWAYS ineffective and rarely meets the needs of a
The free market is usually less effective in meeting societal needs.
45
What are the factors of production?
risk and opportunity
goods and services
wages, salaries, and profits
land, labor, and capital
46
What is the difference between a shortage and scarcity?
A shortage can be temporary or long-term, but scarcity always exists
A shortage is a lack of all goods and services; scarcity concerns one item
A shortage results from rising prices; scarcity results from falling prices
There is no real difference between a shortage and scarcity.
47
What would government do in a model free enterprise system?
protect property rights and enforce contracts
ensure that prices remain reasonable
stay out of economic activity altogether
support entrepreneurs to encourage innovation
48
Why did the Soviet Union experience many surpluses and shortfalls?
Central planners could not manage every detail.
The cold Russian climate made farming hard.
The labor force was not well educated.
The country depended on imports to obtain resources
49
Why are tradeoffs necessary?
Every product has flaws
People want different things.
Resources are limited
Advertisers promote products.
50
an economic system based on supply and demand with little or no government control.
market
traditional
mixed
command
51
Which of these economic goals is most important in a traditional economy?
stability
freedom
growth
efficiency
52
Which scenario best illustrates the law of diminishing marginal utility?
A collector of china figurines is eager to get a new one.
A car breaks down more often as it gets older.
Someone who doesn't listen to music does not care about getting a new CD
A new toy is less exciting to a child w/ many toys than to a child w/few
