Introduction to Economics Review

Introduction to Economics Review

​What is Economics? Key terms

​Economics

​Scarcity

​Economic Choice

​Rational Self-Interest

Multiple Choice

What is Economics?

• The study of how people make rational self-interest choices in using unlimited resources to satisfy limited wants and needs

• The study of how people, when faced with scarcity, make irrational choices

• The study of how people, when faced with scarcity, make rational self-interest choices in using limited resources to satisfy wants and needs

• The study of economic choices

Multiple Choice

Basic definitions of Economics DO NOT include

• Choice

• Rational self-interest

• Scarcity

• Bartering

Multiple Choice

What is scarcity?

• The problem of having unlimited resources with unlimited wants and needs

• The problem of having limited resources with unlimited wants and needs

• The problem of having limited resources with limited wants and needs

• The problem of having unlimited resources with limited wants and needs

Multiple Choice

What is a rational self-interest choice?

• A balanced choice that helps the person who makes it and others

• A quick choice that helps the person making the choice

• A sensible choice that best serves the person making the choice

​Money

Bartering

​Functions of Money

​Prices

Multiple Choice

What is the definition of bartering?

• Taking a product with a promise to return it 

• The value placed on a product

• An object used as payment for a product

• Trading a product for another product

Multiple Choice

Which of the following is NOT one of the three functions of money?

• Indicator of debt

• Unit of accounting

• Store of value

• Medium of exchange

Multiple Choice

How is money being used when you save your pocket money to buy a skateboard?

• As medium of exchange

• As unit of accounting

• As store of value

Multiple Choice

How is money being used when you compare the value of different products?

• Unit of accounting

• Store of value

• Medium of exchange

​Markets

Competition

​Market Entry Barriers

​Market Structures

Multiple Choice

What is the main purpose of a market?

• To provide jobs for sellers

• To allow for the exchange of products

• To provide a place for buyers to spend time

• To help government raise taxes

Multiple Choice

Competition among buyers means

• Higher product prices and lower profits for sellers

• Higher product prices and higher profits for sellers

• Lower product prices and lower profits for sellers

• Lower product prices and higher profits for sellers

Multiple Choice

Which market structure requires a large number of suppliers (sellers)?

• Monopoly 

• Oligopoly

• Pure competition

Multiple Choice

Which type of market has a few major sellers, where a price action by one seller can cause the other sellers to follow?

• Monopoly

• Oligopoly

• Pure competition

Multiple Choice

Which is the worst market structure for a buyer?

• Monopoly

• Oligopoly

• Pure competition

Multiple Choice

Which of the following is NOT part of a pure competition?

• No control over the price or market

• Many buyers and sellers

• There are market entry barriers

• Buyers are familiar with product

Multiple Choice

If you are trying to sell the product, how will you attract more customers?

• Lower the price

• Raise the price

Multiple Choice

When government issues a new regulation which requires sellers to buy a license to sell certain products, it can be said that the government is creating:

• A better product

• A better market

• A barrier to market entry

• A more competitive market