Economics Exam review part 2

Having to decide whether to spend $15 on a movie or on dinner is an example of what concept?

• debt

• scarcity

• stewardship

• macroeconomics

In the first chapter of The Wealth of Nations, what type of factory does Adam Smith use as an example of division of labor?

• train factory

• pin factory

• steel factory

• textile factory

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According to Adam Smith, division of labor helps workers improve their ________ more quickly.

• performance

• wages

• compassion

• health

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Why would a subsidy be considered an element of a command economy?

• Because the government is forcing consumers to buy certain goods and services

• Because the government is helping determine who will be able to consume goods and services

• Because the government is helping determine what goods and services are produced

• Because the government is forcing producers to abandon traditional methods of production

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CCSS.RI.11-12.5

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The productive resources used to produce goods and services are collectively known as ________.

• natural resources

• capital resources

• factors of production

• financial capital

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A state government decides to ban the sale of all gas-powered vehicles in its state. What type of economic system would this be an example of?

• traditional economy

• mercantilist economy

• command economy

• market economy

Why is profit motive an important characteristic of a market economy?

• Without competition, businesses could charge whatever they want for their goods and services.

• Without being selfish, business owners can't make society better for everyone else.

• Without rich entrepreneurs, no wealth would trickle down to the rest of the nation's citizens.

• Without a worthwhile reward, few people would take the risks required to develop new products.

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Why do choices always result in opportunity costs?

• because we always have to make all-or-nothing decisions

• because the government charges a tax on all purchases

• because even if we faill, there's always another opportunity around the corner

• because every time we choose one thing, we must give up something else

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CCSS.RI.11-12.5

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In Economics in One Lesson, Hazlitt argues that economists who believe that war is beneficial due to increased demand are confusing ________ with demand.

• benefit

• cost

• need

• supply

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In his writings, Adam Smith argues that if people were allowed to act in their own self-interest, the marketplace would be directed by an "invisible ________."

• trade

• force

• wealth

• hand

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