Unit 2 Test

What are the three economic questions every society must answer?

• What to produce, how to produce, and who consumes the goods and services
• When to produce, how to produce, and why to produce
• What to consume, how to consume, and who produces the goods and services
• Where to produce, why to produce, and who produces the goods and services

Which of the following best describes economic efficiency?

• The ability to produce the maximum amount of goods and services
• The ability to produce goods and services with the least amount of resources
• The ability to distribute income equally among all members of society
• The ability to innovate and create new products

What does economic equity refer to?

• The equal distribution of goods and services
• The fair division of economic resources
• The ability to produce goods efficiently
• The focus on economic growth and innovation

What is a key goal of economic freedom?

• Ensuring goods and services are available when needed
• Limiting the economic freedoms of individuals
• Achieving a high level of economic equity
• Maximizing economic efficiency

What role does innovation play in economic growth?

• It reduces the need for economic equity
• It helps improve standards of living
• It decreases the availability of resources
• It promotes traditional economic systems

In what way do societies prioritize their economic goals?

• By following a fixed set of rules
• By making trade-offs based on their values
• By equally distributing all resources
• By focusing solely on economic growth

What is a major characteristic of a traditional economy?

• High levels of innovation and change
• Reliance on modern technology
• Focus on supporting the entire community
• Emphasis on individual success

Which of the following best describes a factor market?

• A place where households buy goods and services
• A place where firms purchase factors of production
• A location where finished products are sold
• An online retail store

What is the primary motivation in a free market according to Adam Smith?

• Government regulations
• Self-interest
• Charitable giving
• Environmental concerns

Which of the following is NOT an example of a product market?

• Farmer’s market
• Sporting goods store
• New York Stock Exchange
• Labor market