Economics and Personal Finance Final Exam

What is the fundamental economic problem that all societies face?

• Abundance of resources
• Scarcity of resources
• Equal distribution of resources
• Unlimited resources

Which term refers to the value of the next best alternative that is forgone when a choice is made?

• Scarcity
• Opportunity cost
• Wants
• Needs

Which of the following is an example of a need?

• Smartphone
• Shelter
• Designer clothing
• Vacation

In a supermarket, what primarily determines what products are stocked on the shelves?

• Consumer demand and supply

• Government directives

• Custom and tradition

• Central planning

In a hypothetical country, the government is in control of resources and production, and everything is centrally planned. What type of economic system does this country follow?

• Market economy

• Traditional economy

• Command economy

• Mixed economy

Which economic system is characterized by private ownership of resources and competition in the marketplace?

• Capitalism
• Socialism
• Communism
• Mixed economy

In a command economy, who typically makes decisions about what and how much to produce?

• Private businesses
• Consumers
• Government authorities
• Market forces

What does the law of demand state?

• As the price of a good increases, the quantity demanded decreases
• As the price of a good increases, the quantity demanded increases
• As the price of a good decreases, the quantity demanded decreases
• There is no relationship between price and quantity demanded

Land, labor, capital, and entrepreneurship are the four primary factors of production. Which factor does labor represent?

• Human effort and skill
• Physical assets
• Financial resources
• Innovative ideas and risk-taking

What is the study of how individuals, businesses, and governments allocate resources to satisfy their wants and needs called?

• Sociology
• Psychology
• Economics
• Anthropology