Economics Pre-Assessment Flashcard

Front

Which is a basic economic question that must be answered by all economic systems? Options: What will be the share of profits that go to businesses? What will be the amount of the minimum wage for workers? How will goods and services be produced? How will the government collect income taxes?

Back

How will goods and services be produced?

Front

Profits are equal to total

Back

revenue minus total cost.

Front

In a competitive market, the price of milk is likely to be increased by a ______ in the supply of milk.

Back

increase

Front

What primary function is money serving when it is used to buy a ticket to a movie?

Back

Medium of exchange.

Front

A basic role of entrepreneurs in the economy is to:

Back

take the risks associated with starting new businesses.

Front

An economy’s potential output at any time is limited by

Back

the quantity and quality of labor, capital, and natural resources.

Front

Which would usually reduce total spending in the economy? A. A fall in interest rates. B. A decrease in business taxes. C. A decline in consumer incomes. D. A reduction in personal income tax rates.

Back

A decline in consumer incomes.

Front

An economy will typically experience a decline in its unemployment rate when there is an increase in economic growth.

Back

an increase in economic growth.

Front

Which monetary policy would the Federal Reserve most likely adopt as the economy moves into recession during a period of low inflation?

Back

Lower the federal funds rate.

Front

Opportunity cost (OC) can be described as

Back

all of these answers are examples of opportunity cost (OC)