Unit 1 Test (ECON)

If individuals in an economic system do what their parents did for a living, the economic system is

classified as _____

• Private

• Traditional

• Command

• Market

Economic services are not tangible.

• True

• False

The minimum wage is an example of a federal law that promotes ____

• economic growth

• economic equity

• full employment

• economic efficiency

The former Soviet Union and North Korea have command economies.

• True

• False

Which group of people ultimately determine what is produced in a free enterprise economy?

• Congress

• consumers

• the president

• consumers/business

The factors of production are land, labor, capital, entrepreneurship, and technology

• True

• False

Which of the following is an example of a market economy?

• Cuba

• Taiwan

• the former Soviet Union

• North Korea

Production possibilities assume that technology is fixed.

• True

• False

The purpose of the government in a command economy is to:

• ensure the availability of consumer products

• encourage entrepreneurship

• make all of the major economic decisions

• promote economic freedom

Economics exists as a field of study because needs exceed wants

• True

• False