Econ Final Review

What is the term for the fact that there is never enough of everything?

Which type of economy has little to no government control?

• Communist

• Market

• Socialist

• Command

The manufacturer of a computer game planned to produce the game for a cost of $15 and sell it for $30. However, in the first month, the company sold only 100,000 games. A marketing research group suggests that by dropping their price to $20 they could probably increase sales to about 200,000 games in the next month. Production costs would stay the same, and the manufacturer has the capacity to produce 200,000 games.

Which of these options is the BEST for the coming month when considering marginal costs and benefits?

• dropping the price to $20 because more units would be sold

• keeping the price at $30 because the net profit would be greater

• keeping the price at $30 to retain the image of a quality product

• dropping the price to $20 because the overall income would increase

What sets prices in a capitalist economy?

What point shows low production of good y?

• A

• B

• C

• D

The disadvantage to using ____ is that there is less consumer protection.

Which type of economy do producers and consumers control the economy?

• Communist

• Market

• Socialist

• Command

What is a capital good?

• Intended for final use by individuals.

• Tool/equipment used to make other goods.

• Lasts for less than 3 years w/ regular use.

• Lasts for 3+ years w/ regular use.

What motivates people in a market economy?

Lee's company of nine workers produces 150 units of a product with a marginal cost of $10 for the last unit. The product sells for $12 per unit. If Lee adds one additional worker, the marginal cost would be $13. In this case, Lee should

• keep the number of workers at nine.

• increase the number of workers to ten.

• decrease the number of workers to eight.

• increase the marginal cost per unit to $12.