SP23 Econ Final Exam Review

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

Opportunity cost refers to

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

When deciding how to use resources, you need to evaluate the costs and benefits of each choice to decide which meets your criteria. These are called

• trade-offs.
• opportunities.
• resource frontiers.
• priorities.

Economics is best defined as the study of how societies deal with

• the factors of production.
• the problem of scarcity.
• the paradox of wealth.
• the division of labor.

Which of the following is a disadvantage of a market economy?

• It sustains a high degree of uncertainty.
• It restricts to personal freedom.
• It discourages creativity and new ideas for doing things.
• It does not allocate resources as efficiently as other types of economies.

Which of these is an accurate statement about mixed economies today?

• There are more mixed economies in the world than any other kind.
• Very few economies today can be accurately described as “mixed.”
• Mixed economies exist mostly in nations with communist governments.
• Most nations that once had a mixed economy have evolved into command economies.

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
• a free-enterprise economy

The three synonymous terms to describe the U.S. economic system are free enterprise, capitalism, and

• limited role of government.
• competition.
• free market.
• economic freedom.

What motivates people to work, save, and invest?

• government regulations
• a variety of goods
• incentives
• economic freedom

Inflation causes people to

• work more to pay for basic necessities.
• take more time off work.
• work the same hours for the same pay.
• spend less for the same amount of goods and services.