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Unit 1 Review
Unit 1 Review
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Econ Unit 1 Review
Flashcards
44 cards
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Practice quiz
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Questions
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Answers
1
Adam Smith said this is driving force behind the invisible hand:
greed
self-interest
pride
invisible arms
2
An incentive to work, save, and invest
conspicuous consumption
private property
voluntary exchange
unemployment insurance
3
"There is no such thing as a free lunch" means
Every choice has an opportunity cost
True costs only involve money
Someone else had to pay for the lunch
You get what you pay for
4
You are deciding between a hamburger or a hot dog, both of which cost $6. You choose the hot dog. What is your OC?
the hot dog
$6 plus tax
the time spent waiting in line
the hamburger
5
Who answers the basic questions in a command economy?
Individual citizens
Central government
Central bankers
Businesses and consumers
6
In a pure command system, individuals have the freedom to
open a business
None of the above (or to the left)
buy and sell real estate
choose careers
7
Which goal is least emphasized in a pure free market?
economic growth
economic efficiency
economic security
economic freedom
8
Which is most likely a market economy?
Cuba
North Korea
India
Singapore
9
What choice is made "at the margin"?
moving to another state
to go on vacation
what to study in college
buying a larger or smaller diamond
10
Market economies are characterized by
private property rights and price incentives
government control of property
scarce resources and price controls
an unlimited quantity of resources
11
Who are the buyers of resources in the circular flow?
Product Markets
Neighborhoods
Households
Firms
12
Which is NOT one of the three basic questions?
What to produce?
For whom to produce?
Who owns productive resources?
How to produce?
13
Laissez faire calls for
nationalization of private companies
minimal government intervention
a progressive tax system
socialism
14
Which is NOT an economic goal?
Economic efficiency
Economic uncertainty
Economic security
Economic freedom
15
Which point represents an inefficient use of resources?
F
A
C
E
16
Depletion of fish stocks in a lake is an example of
free riders
the law of diminishing returns
the tragedy of the commons
positive externalities
17
What will shift a PPC outward?
All of the above (and to the left)
better technology
more capital
more natural resources
18
Macroeconomics
ALL of the above (and to the left)
does not matter in the modern world
deals with individuals
deals with large groups or the country
19
Land, labor, capital, and entrepreneurs
Results of production
Basis of employment
Factors of production
Circular flow components
20
What is the OC of moving from C to D?
50 Food
25 Clothes
50 Clothes
25 Food
21
Which one is a capital good?
Leather used to make a jacket
A refrigerator in your home
A cash register in a supermarket
Sugar that goes into candy
22
At what point will this person stop?
Q1
Q*
Q2
Never!
23
Characteristic of a traditional economy
technological stagnation
advanced robotics systems
freedom of choice
focus on heavy industry
24
Title of Adam Smith's book
The Wealth of Nations
The Declaration of Independence
The Invisible Hand
The Art of the Deal
25
Who decides what will be produced in a market economy?
economists
consumers
product markets
Government
26
On a PPC, an economy is efficient if, when we produce more of one good,
we can also produce more of the other good
the PPC shifts outward
we lose production of the other good
the cost of production decreases
27
An intermediate good for candy would be
a worker who adds ingredients
sugar that goes into the candy
a mixing machine to make the candy
store shelves that display the candy
28
Which is NOT a factor of production?
Entrepreneurs
Natural resources
Tools and machinery
Intermediate goods
29
Why did Lebron James skip college?
He went straight to medical school
He didn't know how to read
He could not get accepted
His opportunity cost was too high
30
What is economics?
the science of working and saving
how money flows through society
supply and demand
fulfilling our wants in a world of scarcity
31
An example of human capital
Office space and factories
Training and education
Washington D.C.
Technologically advanced androids
32
Which does NOT increase productivity?
technological advancements
division of labor
hiring more workers
more capital available for workers
33
At Q2...
MC < MB
MC = 0
MC = MB
MC > MB
34
Which point is impossible without new resources?
E
F
C
A
35
Scarcity
makes all societies better off
forces society to make choices
only affects the poor countries
is not a problem for wealthy countries
36
What might have caused this shift in the PPC?
an increase in the unemployment rate
improved technology
more resources
a large natural disaster
37
An economic example of "land"
Disneyland
a chicken sandwich
an apple orchard
a parking structure
38
Adam Smith said this guides the free market
paradox of value
conspicuous consumption
invisible hand
welfare capitalism
39
Productivity is
not a major concern for most companies
total production
value of output per each worker hour
impossible to calculate
40
Which system best serves the wants of consumers?
Socialism
Traditional economy
Command Economy
Market economy
41
An individual who creates a new business
Laborer
Human capital
Businessperson
Entrepreneur
42
For each additional unit, OC increases
increasing marginal product of labor
constant returns to scale
economies of scale
law of increasing opportunity cost
43
What is opportunity cost?
Benefit you receive from your actions
Loss of your next best alternative
Money charged for new opportunities
$19.99 plus tax
44
How can we avoid the tragedy of the commons?
communal ownership
private ownership
destroy the resource
acquire more resources
