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

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