PFL&ECO_Unit 1 Review Quiz

Which of the following is NOT a basic economic question?

• What goods and services should be produced?
• How should these goods be produced?
• For whom are the goods produced?
• How should it be ensured that goods and services are paid for?

Answer explanation

The question asks about the basic economic questions related to production, not the financial aspect.

Which is an example of activity in the product market?

• The Spurs hire a new Head Coach
• Nike opens a new factory
• A teacher buys a Spurs jersey at Academy
• Valero drilling for oil in the Gulf of Mexico

Answer explanation

A product market involves goods and services bought and sold.

An economic system based on custom is a

• Command economy
• Traditional economy
• Market economy
• Free enterprise economy

Answer explanation

Traditional economies rely on customs and traditions to make decisions.

The resources used to make all goods and services are the

• Production possibilities
• Factors of production
• Production trade-offs
• Opportunity costs

Answer explanation

Factors of production are the building blocks of any economy (land, labor, capital, and entrepreneurship).

What is the opportunity cost of a decision?

• The series of alternative decisions that could have been made
• The best possible way the question could have been decided
• The different ways a different person might have made the decision
• The value of the next best alternative that is given up to obtain the preferred item

Answer explanation

Opportunity cost is defined as the cost of the next best alternative foregone when making a decision.

What best describes the role of government in a mixed market economy?

• Control business activities
• Decide what companies will be formed and then allow the managers to run them
• Allow individuals to operate their businesses as long as laws and regulations are followed
• Have control over all the factors of production

Answer explanation

In a mixed economy, the government regulates but does not completely control market activities.

What type of economic system does the United States have?

• Communist
• Socialist
• Mixed Socialist
• Mixed Market

Answer explanation

The U.S. follows a mixed market economy, with both private enterprises and government regulations.

Actions or activities performed for a fee are known as

• Goods
• Opportunity costs
• Absolute advantage
• Services

Answer explanation

Services are intangible activities done for a fee, such as teaching or consulting.

Which of the following could be a factor of production?

• Land
• Labor
• Capital
• All of the above

Answer explanation

All the options listed are factors of production, vital in creating goods and services.

The dominant type of mixed economy is

• Mixed Socialism
• Communism
• Mixed Market
• Traditional

Answer explanation

A mixed market economy is the most common economic system worldwide.