Unit 1 Test Review - Econommics

Paradox of value refers to the:

• high value of nonessential item and the low value of an essential item
• contradiction of what consumer want & what they need
• high value of an essential item & the low value of a nonessential item
• contradiction between gross domestic product & market value

Which of these is an accurate statement about mixed economies today?

• Mixed economies exist mostly in nations with communist governments.
• Most nations that once had a mixed economy have evolved into command economies.
• There are more mixed economies in the world than any other kind.
• Very few economies today can be accurately described as “mixed.”

Opportunity cost refers to:

• cost of not expanding production
• dollar amount attached to a good or service
• value of the next best alternative
• cost of labor when production is expanded or changed

A car is an example of a:

• capital good
• service
• nondurable good
• durable good

A nation's wealth is made up of:

• all goods & services
• all tangible items
• all intangible items
• all tangible & intangible items

The study of economics involves:

• explaining how people deal with scarcity
• explaining how incomes are earned and how jobs are created
• studying how things are made, bough, sold & used
• all of the above

Paying rent instead of purchasing tickets to a concert is an example of:

• opportunity cost
• scarcity
• property rights
• circular flow model

Scarcity is a basic economic problem because:

• governments limit production
• people have trouble making choices
• resources are limited
• opportunity costs limit demand

Inflation causes people to _______ .

• work more to pay for basic necessities
• work the same hours for the same pay
• take more time off work
• spend less for the same amount of goods & services

The economic system of the United States is considered a _______ .

• command economy
• traditional economy
• socialist economy
• free market capitalist economy