Economics Test Flashcards

Front

Effect of increased supply on price with constant demand?

Back

Price decreases.

Answer explanation

When supply increases and demand remains constant, there is more of the product available. This surplus typically leads to a decrease in price as sellers lower prices to attract buyers, making the correct answer "The price decreases."

Tags

DOK Level 2: Skill/Concept

Front

Mixed economic system:

Back

An economy where both private and public sectors play a role.

Answer explanation

A mixed economic system combines elements of both private and public sectors, allowing for government intervention alongside private enterprise. This distinguishes it from systems where either the government or private businesses operate exclusively.

Tags

DOK Level 2: Skill/Concept

Front

Effect of increased demand on price with constant supply?

Back

Price will increase.

Answer explanation

When demand for a product increases while supply remains constant, more consumers compete to purchase the product, driving the price up. Therefore, the correct answer is that the price will increase.

Tags

DOK Level 2: Skill/Concept

Front

Economic system without government intervention?

Back

Market economy

Answer explanation

A market economy is characterized by minimal government intervention, allowing supply and demand to dictate production and pricing. In contrast, command economies involve significant government control.

Tags

DOK Level 2: Skill/Concept

Front

Reason for importing goods

Back

To obtain goods not available domestically.

Answer explanation

Countries import goods primarily to obtain products that are not available domestically, ensuring access to a wider range of items and resources that may not be produced locally.

Tags

DOK Level 2: Skill/Concept

Front

Reason for exporting goods?

Back

To earn foreign currency.

Answer explanation

Countries export goods primarily to earn foreign currency, which can be used to purchase imports and strengthen the economy. This is a key reason for engaging in international trade.

Tags

DOK Level 2: Skill/Concept

Front

Effect of increased supply on economy with unchanged demand?

Back

Leads to lower prices.

Answer explanation

An increase in supply, with demand unchanged, typically leads to lower prices. More goods available in the market means sellers may reduce prices to attract buyers, resulting in a decrease in overall price levels.

Tags

DOK Level 2: Skill/Concept

Front

Key factor influencing trade decisions between countries?

Back

Availability of natural resources.

Answer explanation

The availability of natural resources is a key factor influencing trade decisions, as countries often seek to import resources they lack and export those they have in abundance, making it essential for economic growth.

Tags

DOK Level 2: Skill/Concept

Front

In a command economy, who makes economic decisions?

Back

The government.

Answer explanation

In a command economy, the government primarily makes economic decisions, controlling production, distribution, and prices, unlike in market economies where individual consumers and private businesses have more influence.

Tags

DOK Level 2: Skill/Concept

Front

Primary role of imports in an economy?

Back

Provide goods not produced locally.

Answer explanation

The primary role of imports is to provide goods that are not produced locally, allowing consumers access to a wider variety of products and enhancing overall economic welfare.

Tags

DOK Level 2: Skill/Concept