Economics Total Recall (Fundamentals)

In economics, rational decisions occur when
                                                             SSEF2b

• suppliers lower their prices to increase demand
• marginal benefits of an action equal or exceed the marginal costs
• a budget is used for spending and saving decisions
• command economies answer the three basic questions

Which is a human resource that Ms. Johnson could use for her art gallery?
SSEF1b

• Light fixtures to help display the artwork.
• A security system to protect the artwork.
• Knowledge of trends in modern art.
• A series of paintings by a prominent local artist.

Which is a fundamental questions every society must answer?
SSEF1a

• What goods and services are to be produced?
• How are the goods and services to be produced?
• Who will get the goods and services that are produced?
• All of the above

A and B both wash cars and change oil. Currently, each man washes and changes oil by himself, but the process takes lots of time. they would MOST LIKELY improve their efficiency if
SSEF2b

• A & B wash a car and chang eoil together
• A washes car while B changes oil
• A washes B car while B washes A's car
• A and B reduce the number of cars they wash

Susan offers to trade her old iPod for Claudia's cell phone and Claudia accepts. Assuming both products work perfectly, we can conclude that
SSEF3b

• Claudia is now happier than Susan.
• neither party has gained because the exchange was fraudulent
• both people have gained because the exchange was voluntary and non-fraudulent
• Susan places the same value on cell phones as she does for iPods

Investing heavily in new capital equipment and technology is MOST related to
SSEF6b

• supply and demand
• opportunity costs
• economic growth
• economic freedom

Competition and free enterprise are most common in which type of economic system?
SSEF4a

• traditional
• market
• communist
• planned

Economic growth is often tied to investment in machinery, new technology, and education of the population. This is because
SSEF6b

• these items lead to a greater productivity of inputs
• the only way to measure economic growth is to observe change sin these factors
• investment in these items are sole determinant of output
• all of these items improve captal resources

There are four types of economic systems.  Most economies are _____. 
SSEF4a

• Traditional 
• Command 
• Market 
• Mixed

Which BEST describes productivity?
SSEF6a

• the interaction of buyers and sellers
• the relationship of inputs and outputs
• producing at high opportunity costs
• trading based on absolute advantage