Econ Unit 1 Review

Societies embrace various economic systems to deal with the fundamental problem of

• Scarcity
• Trade
• Productivity
• Economics

Which of these is most closely associated with opportunity cost?

• consumerism
• ​trade-offs
• ​entrepreneurs
• ​productivity

Societies are faced with which three basic questions about production of goods?

• what, how, and why
• ​what, where, and when
• ​what, how, and for whom
• ​when, where, and for whom

When a business needs to decide whether a certain action is worth the cost, the most helpful analysis would be a(n)

• ​production possibility comparison.
• ​cost-benefit analysis.
• ​economic model.
• ​needs assessment.

Which of the following statements are true about factors of production? (check all that apply)

• computers used to produce magazine articles are categorized as Labor
• Trees growing in the forest are categorized as Land
• A third-grade teacher is categorized as Labor
• ​Motor oil is categorized as Land

The production possibilities curve is of a fictitious country that produces only cars and clothing. What does the curved line depict?

• The country can produce 425 units of clothing and 80 units of cars.
• The production of cars has fallen to zero over time.
• The maximum quantity of cars and clothing that can be produced if the country is running at full efficiency.
• Whether the country should specialize in producing cars or clothing.

Opportunity cost refers to

• ​the dollar amount attached to a good or service.
• ​the cost of labor when production is expanded or changed.
• ​the cost of not expanding production.
• ​the value of the next best alternative.

One of the characteristics of a capitalist free enterprise economy is

• the minimum wage.
• ​consumerism.
• ​voluntary exchange.
• ​central planning.

Which of these helps explain why mixed economies develop?

• People become unhappy with aspects of their current economy.
• ​People are seldom exposed to the ideas and technologies of other cultures.
• ​Government control of an economy tends to make a nation more prosperous.
• ​Government control of an economy leads to a diversity of economic approaches.

In which of these systems is the government most likely to provide people with goods and services they could not otherwise afford?

• a market economy
• ​a socialist economy
• ​a traditional economy
• the level of personal freedom the citizens enjoy.