IA 2 Review Pt. 4

What is the fundamental problem of every society?

• labor costs
• scarcity
• economic interdependence
• market fluctuation

What is the definition of the economic term Opportunity Cost?

• the value of the next best alternative that is given up due to the choice you made 
• The price you pay to purchase something 
• The benefit you gain by making a decision 
• The amount of debt you take on by making a decision 

If a point lies on the curve this means the company/country/individual is being efficient. If a point lies inside the curve, what does that tell?

• They are being over efficient

• They are being inefficient

• It is not impossible with the given resources

• They are still efficient, just at another point

What does point Y represent on the PPC?

• Efficiency
• Unattainable / impossible
• Inefficency
• Nothing

Which letter represents the O.C. of moving from A to G?

• H

• I

• M

• K

• L

Which letter represents the O.C. of moving from C to E?

• H

• I

• J

• K

• L

In which economic system is the protection of private property rights essential?

• Command

• Traditional

• Market

• Socialism

In which economic system does the government answer all three of the big economic questions? (What to produce? How to produce? For whom to produce?)

• Command

• Socialism

• Market

• Traditional

Based on the passage, East Germany's government planned to transform its economy from: Click the magnifying glass for a better view.

• Traditional to mixed

• Command to traditional

• Market to mixed

• Command to mixed

Which of the following best explains a mixed economy?

• Private ownership of the factors of production and regulation of businesses by government

• Market exchanges answer all three of the big economic questions

• Family customs and traditions determine what and how to produce a good

• Government answers all three of the big economic questions