Economics Basics

Which of the following is one of the three basic economic questions?

• What price should be set for goods and services?

• How can income be shared?

• How should goods and services be produced?

• How is a budget created?

Increased competition between producers of a good may lead to

• a decrease in profit.

• an increase in price.

• a drop in demand.

• a rise in taxes.

Which type of economic system has the highest level of government control?

• traditional economy

• market economy

• command economy

• mixed economy

Which of the following is a feature of a good budget?

• money reserved for saving

• income that is less than its expenses

• economic incentives

How do companies make a profit?

• They try to increase expenses and decrease revenue.

• They try to decrease expenses and increase revenue.

• They try to increase expenses and increase revenue.

• They try to decrease expenses and decrease revenue.

Economy in which people make economic decisions based on their group's customs and values. Not common today.

• Traditional Economy

• Market Economy

• Command Economy

• Mixed Economy

Individual consumers and producers make economic decisions based on the principles of freedom, competition, and profit.

• Traditional Economy

• Market Economy

• Command Economy

• Mixed Economy

The central government makes all economic decisions.

• Traditional Economy

• Market Economy

• Command Economy

• Mixed Economy

An economic system combining private and public enterprise.

• Traditional Economy

• Market Economy

• Command Economy

• Mixed Economy

A desire for a certain good or service.

• producer

• opportunity cost

• supply

• demand