Microeconomics Unit 1 Test Review

Multiple Choice

Scarcity

• Direct consumption vs indirect consumption 

• Alternatives that must be given up when one is chosen rather than another 

• Not enough resources for the wants for the people 

• the most desirable alternative given up 

Multiple Choice

consumer vs. capital goods

• Direct consumption vs indirect consumption

• Alternatives that must be given up when one is chosen rather than another 

• Not enough resources for the wants for the people 

• An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next. Ex: Mennonites 

Multiple Select

Shifters of the PPC

• change in resource quantity or quality

• change in technology

• change in trade

• change in employment

Multiple Select

Factors of Production

• Land

• Capital

• Labor

• Entrepreneurship

Multiple Choice

Positive Economics

• How the economy should work

• How the economy does work (Based on fact)

• How the economy functions

• How the economy utilizes of all natural materials to produce goods

Multiple Choice

Macroeconomics

• the study of the economic behavior and decision making of small units, such as individuals, families, and businesses

• The study of the economy as a whole

• How the economy works, based on facts

• how the economy should work

Multiple Choice

Normative Economics

• How the economy produces goods

• How the economy decides how much of a good to sell

• How the economy should work

• How the economy functions

Multiple Select

What are the questions every economic system must answer?

• What goods and services to produce?

• How will they be produced?

• Who will get the goods and services?

• How much will be produced?

Multiple Choice

Microeconomics

• the study of the economic behavior and decision making of small units, such as individuals, families, and businesses

• The study of the economy as a whole

• How the economy works, based on facts

• The utilization of all natural materials to produce goods

Multiple Choice

Trade-offs

• Alternatives that must be given up when one is chosen rather than another

• the most desirable alternative given up 

• Capitalism, private ownership law of supply and demand Ex: Industrialization US 

• Direct consumption vs indirect consumption 

Multiple Choice

opportunity cost

• the most desirable alternative given up 

• Not enough resources for the wants for the people 

• Alternatives that must be given up when one is chosen rather than another 

• Capitalism, private ownership law of supply and demand Ex: Industrialization US 

Multiple Choice

Efficient

• Y

• A

• C

• N/A

Multiple Choice

Impossible given current resources

• H

• F

• C

• D

Multiple Choice

Constant Opportunity Cost

• D

• F

• B

• H

Multiple Choice

command economy

• An economic system in which the government controls a country's economy. Ex: North Korea 

• An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next. Ex: Mennonites 

• Capitalism, private ownership law of supply and demand Ex: Industrialization US 

• economies made up of elements from more than one economic system Ex: Current USA

Multiple Choice

free market economy

• Capitalism, private ownership law of supply and demand Ex: Industrialization US

• economies made up of elements from more than one economic system Ex: Current USA

• An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next. Ex: Mennonites

• An economic system in which the government controls a country's economy. Ex: North Korea 

Multiple Choice

Mixed Economies

• economies made up of elements from more than one economic system Ex: Current USA

• Capitalism, private ownership law of supply and demand Ex: Industrialization US

• An economic system in which the government controls a country's economy. Ex: North Korea

• An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next. Ex: Mennonites 

Multiple Choice

Allocative Efficiency

• the particular mix of goods and services most highly valued by society

• the most desirable alternative given up 

• The utilization of all natural materials to produce goods 

• Not enough resources for the wants for the people 

Multiple Choice

• increasing opportunity cost

• Decreasing Opportunity Cost

• Constant Opportunity Cost

Multiple Choice

Traditional Economy

• An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next. Ex: Mennonites 

   

• An economic system in which the government controls a country's economy. Ex: North Korea

• Capitalism, private ownership law of supply and demand Ex: Industrialization US

• economies made up of elements from more than one economic system Ex: Current USA

Multiple Choice

Inefficient/Unemployment

• F

• E

• H

• C