Economics Quiz: Scarcity, Market Economy, and Command Economy

What is the fundamental economic problem facing all societies?

• Excess

• Abundance

• Scarcity

• Unlimited resources

What is the difference between a need and a want?

• A need is tangible, while a want is intangible

• A need is intangible, while a want is tangible

• A need is something not necessary for survival, while a want is something necessary for survival

• A need is something necessary for survival, while a want is something not necessary for survival

What is a durable good?

• An item that lasts for fewer than three years when used on a regular basis

• An item that lasts three years or more when used on a regular basis

• A good intended for final use by individuals

• A tool or good such as machinery or equipment that is used by businesses to produce other products

What is the paradox of value?

• The contradiction that some necessities have a very high monetary value, while some nonnecessities have a very low value

• The contradiction that some necessities have a very low monetary value, while some nonnecessities have a very high value

• The contradiction that all necessities have a very low monetary value

• The contradiction that all nonnecessities have a very high monetary value

What is wealth in an economic sense?

• The accumulation of tangible items that are intangible and scarce

• The accumulation of tangible items that are scarce, have utility, and are transferable

• The accumulation of products that are intangible, scarce, and transferable

• The accumulation of intangible items

What is a factor of production in economics?

• The tools, equipment, machinery, and factories used in the production of goods and services

• The accumulation of intangible items

• The resources required to produce goods and services

• The accumulation of products that are tangible, scarce, and transferable

What is a characteristic of a command economy?

• Central authority makes the major economic decisions

• Decentralized decision making

• High degree of individual freedom

• Relatively small degree of government interference

Which countries are based on markets and capitalism?

• Russia and China

• Australia and Canada

• India and Brazil

• South Africa and Mexico

What is a disadvantage of a market economy?

• Adjusts gradually to change over time

• Low degree of individual freedom

• High degree of government interference

• Does not provide for everyone

What is a characteristic of a market economy?

• Decentralized decision making

• Private ownership of resources

• High degree of government interference

• Central authority makes the major economic decisions