Economics Semester Review

A car is an example of a

• durable good.

• nondurable good.

• capital good.

• service.

Opportunity cost refers to

• the dollar amount attached to a good or service.

• the value of the next best alternative.

• the cost of not expanding production.

• the cost of labor when production is expanded or changed.

Economics is best defined as the study of how societies deal with

• the factors of production.

• the problem of scarcity.

• the paradox of wealth.

• the division of labor.

The three synonymous terms to describe the U.S. economic system are free enterprise, capitalism, and

• limited role of government.

• competition.

• free market.

• economic freedom.

Which of the factors of production involves taking risks and combining resources to produce a good or service?

• land

• capital

• labor

• entrepreneurs

The economic system of the United States is considered a

• free market capitalist economy.

• command economy.

• socialist economy.

• traditional economy.

Which is a good synonym for the word barter in the term barter economy?

• trade

• fiat

• specie

• monetary

How many distinct factors of production do economists recognize?

• one

• two

• three

• four

Consumers in a free enterprise economy ultimately determine (a)   to produce.

• when

• how

• what

• where

Which of these best describes the influence of high prices on the behavior of producers?

• They are an incentive for producers to produce more.

• They are an incentive for producers to buy less.

• They encourage producers to modify their supply schedules.

• They have no significant overall effect on producer behavior.