Financial Literacy Unit 1 Test Review

Which of the following is a want?

• clothing

• food

• shelter

• vacations

What forces people to make economic choices?

• Need for shelter

• Abundance of goods

• Scarcity of resources

• Desire for profit

An economic system in which individuals & businesses own the resources used to produce the goods & services

• command economy

• free market economy

• opportunity cost

• profit

• trade-off

An economic system in which the government makes the major economic decisions.

• command economy

• free market economy

• opportunity cost

• profit

• trade-off

Which is the best example of a natural resource?

• deck

• tree

• fence

• house

Which of the following is a human resource?

• oil

• tools

• goods

• knowledge

The money left over after all the costs of production have been paid

• command economy

• free market economy

• opportunity cost

• profit

• trade-off

...among producers leads to lower prices, higher quality products, and more satisfied customers

• profit

• market

• competition

• private property rights

Which of the following BEST defines a free market?

• Individuals may start new business ventures at no cost.

• Buyers and sellers may conduct business voluntarily in the marketplace.

• Businesses may compete with high levels of government interference

• Individuals may buy and sell property without paying taxes.

Private citizens make most of the economic decisions in the U.S. economy.

• True

• False