ECON - Unit 1 Practice Test

Front

What is the opportunity cost of a decision?

Back

the most desirable alternative given up for the decision

Front

What incentive motivates an entrepreneur or business owner to sell a product?

Back

making profits on sales

Front

All economic systems can be classified as a _____________ economy? Options: command, market, mixed, traditional

Back

mixed

Front

What does the process of specialization do for an economy?

Back

It makes it more efficient.

Front

The resources used to make all goods and services are the ___________________________.

Back

factors of production

Front

Which of the following is NOT a key economic question?

• What goods and services should be produced?
• How should these goods and services be produced?
• Who consumes these goods and services?
• How are goods and services to be paid for?

Back

How are goods and services to be paid for?

Front

Any resources that are made by humans and used to create other goods and services are called _____________.

Back

capital

Front

The lack of which of the following represents a scarcity?

• orange juice because the trucks carrying it are on strike
• enough workers to finish two jobs because there’s a limited supply of workers
• enough workers to work at night because the pay is too low
• grapefruit juice because very few people want to buy it

Back

enough workers to finish two jobs because there’s a limited supply of workers

Front

What is the function of an economic system?

Back

to produce and distribute goods and services

Front

Why does even a free market (capitalist) economy need some government intervention?

Back

to provide for things that the marketplace does not address