Short Economics Unit #1 Review

What is the primary focus of microeconomics?

• The economy as a whole

• Individual markets and consumers

• International trade

• Government policies

Which term describes the cost of the next best alternative when a choice is made?

• Trade-off

• Opportunity Cost

• Scarcity

• Utility

What is the main characteristic of a market economy?

• Government control

• Free enterprise

• Central planning

• Fixed prices

Which economic system is characterized by private property and profit incentive?

• Command Economy

• Traditional Economy

• Capitalism

• Mixed Economy

What is the role of entrepreneurship in the factors of production?

• Providing labor

• Organizing resources

• Supplying capital

• Consuming goods

What does the production possibilities curve illustrate?

• Unlimited resources

• Trade-offs and opportunity costs

• Fixed production levels

• Economic growth

Which term refers to the limited nature of society's resources?

• Abundance

• Scarcity

• Surplus

• Utility

What is a traditional economy primarily based on?

• Innovation

• Customs and traditions

• Government planning

• Market forces

What is the invisible hand according to Adam Smith?

• Government intervention

• Market forces guiding economic choices

• Central planning

• Consumer preferences

Which economic system combines elements of both capitalism and socialism?

• Market Economy

• Command Economy

• Mixed Economy

• Traditional Economy