Economics Final Review Part 1

Which kind of decisions involving resources must producers of goods and services make?

• • allocating

• • marginalizing

• • renewing

• • satisfying

Which of these government policies pursues the economic goal of equity?

• Responses

  • protecting consumers from fraud

• • providing welfare benefits

• • preventing monopolies

• • ending a recession

What is the purpose of a free-market system?

• • to protect the conditions that enable specialization

• • to stimulate the growth of the gross domestic product

• • to raise the standard of living for everyone in the country

• • to allow consumers and producers to make their own decisions

Why do economists measure the gross domestic product?

• • to see how much economic activity there is in a particular country

• • to estimate how much the government must tax to avoid a budget deficit

• • to enable the Fed to decide whether to increase or decrease the money supply

• • to determine whether consumers and producers are making free choices

How does the assembly line benefit the economy?

• • It enables low taxation.

• • It provides maximum utility.

• • It keeps distribution costs low.

• • It increases productivity.

In a free-market system, how do consumers let producers know what they want to buy and how much they are willing to pay?

• • by boycotting

• • by viewing their credit reports

• • by engaging in collective bargaining

• • by the items they purchases

Which does utility measure?

• • value

• • money

• • usefulness

• • satisfaction

Which is the purpose of advertising?

• • influence consumer behavior

• • create a monopoly

• • keep prices low

• • conduct market research

Cable television is most associated with which competitive situation?

• • pure competition

• • monopoly

• • oligopoly

• • communism

Which type of business is defined in part by its public regulation?

• • sole proprietorship

• • partnership

• • public corporation

• • government corporation