Unit 7 Review: The American Free Market System

You buy a new HD TV for $800.  By doing so, you are unable to upgrade to an IPhone 6s.  The item you did NOT choose to buy can be considered to be your:

• bargain
• limited resource
• opportunity cost
• production capital

_______________ _____________ are things from nature, such as metal, that are used to make products.

• capital resources
• human resources
• natural resources
• business resources

Your local Wal-Mart is having a sale on oranges.  However, few people are buying them, and a new shipment is due by the end of the day.  What will the store manager do to fix this problem?

• nothing; wait and see what happens
• lower the price of the oranges
• order more oranges
• raise the price of the oranges

__________ _________ refers to the physical and mental talents that people contribute to the production of goods and services.

• human resources
• natural resources
• business resources
• capital resources

Something that is offered to consumers that is meant to change economic behavior is known as:

• a consumer
• a profit
• an entrepreneur
• an incentive

Free financing, tax credits, and buy one get one free are ALL examples of which principle of the American economic system?

• incentives
• monopolies
• opportunity cost
• scarcity

Selecting an item or option from a list of possibilities is the definition of which of the following economic principles?

• choice
• scarcity
• competition
• production

All of the following are characteristics of a command economy except:

• central ownership, usually by the government
• centrally planned economy
• high levels of competition and consumer choice
• lack of competition and consumer choice

Consumers determine what goods and services will be produced through their purchases and choices is the definition of which of the following terms?

• option
• choice
• purchase
• consumer sovreignty

When both supply and demand are high, the cost of goods and/or services is usually:

• moderate
• high
• low
• flexible