Economics Unit 1 Exam Review

Economics Unit 1 Exam Review

by Jay Sinofsky

Multiple Choice

What is the concept of SCARCITY?

• A limited amount of resources to meet an unlimited demand.

• An unlimited amount of resources to meet a limited demand.

• Unlimited supplies for unlimited demands, but only for items that are WANTS, not NEEDS.

• A Halloween supply store. Pronounced as "Scare City".

Multiple Choice

Which of these is an example of SCARCITY?

• 3540 Alta Mesa Blvd, Fort Worth, Texas 76133

• The farms in the United States grow more than enough produce to feed everyone in the United States.

• Jeff Bezos gives everyone on Earth one million dollars.

• Every person on Earth needs clean, drinkable water, but there's only a small amount available.

Multiple Choice

What are the four FACTORS OF PRODUCTION?

• Primary, Secondary, Tertiary, and Quarternary

• Capitalists, Socialists, Anarchists, and Fascists

• Land, Labor, Capital, and Entrepreneurship

• Input, Output, Scarcity, and Profit

Multiple Choice

What are the four types of ECONOMIC SYSTEMS?

• Primary, Secondary, Tertiary, and Quarternary

• Land, Labor, Capital, and Entrepreneurship

• Democracy, Dictatorship, Theocracy, and Anarchy

• Traditional, Free Market/Capitalist, Mixed, and Centrally Planned/Command

Fill in the Blanks

In this economic system, the three key economic questions (What to produce, how to produce it, and who it's produced for) are answered by tradition, rituals, and historic practices.

Fill in the Blanks

In this economic system, the three key economic questions (What to produce, how to produce it, and who it's produced for) are answered by consumers and producers, and there is little interference from by the government:

Fill in the Blanks

In this economic system, the three key economic questions (What to produce, how to produce it, and who it's produced for) are answered by the central government. Private individuals cannot answer these questions.

Fill in the Blanks

In this economic system, the three key economic questions (What to produce, how to produce it, and who it's produced for) are answered by consumers and producers, but the government sets rules and regulations, and provides those things that individuals cannot provide.

Multiple Choice

What is OPPORTUNITY COST?

• The worst decision that a person can make in any situation.

• The best alternative option that someone gives up when they make a decision.

• The best decision that a person can make.

• The monetary value of an item that someone decides to buy.

Multiple Choice

You take a part time job working 20 hours a week. Which of these would be the (hypothetical) OPPORTUNITY COST?

• You've got money from those paychecks!

• You can buy a PS5 with the money that you've earned.

• You could be spending that time with your friends instead of working.

• You're not giving anything up by working 20 hours a hour.

Multiple Choice

What does the CIRCULAR FLOW MODEL show?

• The flow of money between households and firms.

• How a society chooses between WANTS and NEEDS.

• The flow of resources between the Resource Market and Product Market.

• The flow of money, goods, and resources between the different sectors of the economy.

Multiple Choice

In a Circular Flow Model, which market distributes goods and services to households in return for money?

• The Factor/Resource Market

• The Product Market

• The Government Market

• The Import/Export Market

Multiple Choice

What is the role of the RESOURCE/FACTOR MARKET in the Circular Flow Model?

• To provide goods and services to households in exchange for money.

• To supply firms with the Factors of Production, which are supplied by households.

• To supply businesses with completed goods that are used for resale.

• To supply the government with tax revenue in the form of Corporate and Sales taxes.

Multiple Select

What does a PRODUCTION POSSIBILITIES CURVE show?

• The maximum output that possible when an economy utilizes ALL of its available resources.

• The prices that economies can charge for their goods and services.

• The flow of goods between product markets and households.

• All of the different possibilities that an economy has when choosing how to best utilize its resources.

Multiple Choice

What would cause a PPC (Production Possibilities Curve) to shift outward (to the right)?

• A decrease in available resources

• A decrease in the amount of resources used

• An increase in the price of finished goods and services

• An increase in available resources or an increase in the efficiency with which existing resources are used

Multiple Choice

What are the three key ECONOMIC QUESTIONS?

• Why is it produced? How much does it cost?

  What happens to those who produce it?

• Who does the labor? Who starts the firm? How many people are employed?

• What to produce?

  How to produce it?

  Who to produce it for?

• What is your name? What is your quest? What is the airspeed velocity of a coconut laden swallow?

Multiple Choice

What is an ENTREPRENEUR?

• Someone who starts a business

• Someone who hijacks ships on the open ocean

• Someone who protects the King of France

• Someone who makes all the economic decisions for a government.

Multiple Choice

What is SPECIALIZATION?

• Choosing a specific class in a role playing game

• Stores giving discounts on specific goods or services

• Focusing energy and resources on maximizing production of one specific good or service.

• Diners serving a specific meal on certain days at a lower price.

Multiple Choice

What type of economy does North Korea have?

• Command/Centrally Planned

• Traditional

• Free Market Capitalist

• Mixed Market

Multiple Choice

What are ECONOMIC INCENTIVES

• Payments made by households to governments

• Discounts to encourage people to buy a certain car

• Payments to encourage businesses and households to do a certain thing.

• Small copper cups that hold scented candles

Multiple Choice

What is the government's role in a Free Enterprise Economy?

• To make all the decisions regarding the economy

• To pass safety and banking laws, and provide a services that are too big for firms and households to provide

• To seize all private property and redistribute it to the people

• To enforce the will of the President