Unit 1: Game of Economics_Study Guide

Which of the following best describes a player's role in any game?

• The number of turns he or she gets to take

• Actions expected of him or her

• Name of his or her character

• How he or she score points

Which is studied by economists to understand how resources are used?

• Distriubution

• Allocation

• Destruction

• Collections

Which of these activities is most essential to the game of economics?

• Production of goods and services

• Reduction of waste products

• Use of recyclable materials

• Development of new products

Which of the following situations is one where the goal of efficiency is being met?

• When you do something with as little waste as possible

• When you use up all of the available resources

• When you allocate resources to people who deserve them

• When you make sure you produce as much of something as possible

Which of the following is an example of an allocation decision?

• A telephone factory converted to make computers

• Coal is set aside to burn as heating fuel

• A hub-and-spoke netowrk is used to ship packages

• An assembly line is used to build cars

Which of the following describes a situation where the goal of security is being pursued?

• Consumers are protected against theft, fraud, and coercion

• A company opens a new factory and employs more workers

• The government establishes a retirement program for its citizens

• A new government program provides food to homeless people

According to the circular-flow model, which of the following is NOT provided by consumers?

• Labor

• Capital

• Land

• Wages

Which of the following best explains why the free-market system follows a circular-flow model?

• The allocation of resources affects both production and distribution

• Goods and services are constantly recycled in a circular manner

• Free choices made by consumers and producers invluence each other

• Profits flow in a circular way back and forth between different producers

Which of the following best explains why the government makes and enforces laws in a free-market system?

• Competition among producers by itself cannot ensure a wide range of consumer choices

• Laws aginst theft, fraud, and coercion are needed to protect free choice

• The government needs to plan efficient outcomes

• Workers pressure the government to guarantee minimum wages

Which of the following best explains why the profit motive often leads to efficiency and innovation?

• The competition to make profit drives producers to eliminate waste

• Profit gives producers more money to be able to buy better resources

• Consumers want to reduce waste in order to spend less on what they buy

• Losing money prevents producers from hiring the most efficient workers