PRACTICE TEST ME Econ

What are the 3 basic economic questions that all economic systems must answer?

• What to produce, how to produce it, and for whom to produce the goods
• When to produce, why to produce, and how long to produce
• To what extent to produce, how much to produce, why to produce
• What to produce, why to produce, and how much to produce

Under which economic system does the government make almost all of the economic decisions?

• Command (Public)
• Market (Private)
• Traditional (Custom)
• Capitalist (Laws of Supply and Demand)

The economies of Israel, Saudi Arabia and Turkey could be best described as

• Traditional

• Pure Market

• Mixed Command

• Mixed Market

Which describes how MOST countries around the world answer basic economic questions?

• Most countries are pure command economies
• Most countries are pure market economies
• A mixture of command and market economies
• A mixture of traditional and market economies

In a market economy, who makes the economic decisions?

• subsistence farmers (grow just enough to feed family)
• custom and habit (do what ancestors did)
• government planners (public control)
• people (productions based on supply and demand)

Which industry does Saudi Arabia's government specialize in?

• Oil
• technology
• agriculture
• textile manufacturing

Where are most of the countries of OPEC located?

• Africa
• South America
• North America
• Southwest Asia

Why was OPEC created?

• To regulate the supply and price of oil
• To help the Palestinians in their problems with Israel
• To design new machinery to get oil out of the ground
• To keep countries that are not members from producing any oil

Why have the Israelis made a big investment in human capital?

• They need capital tools to extract the abundance of oil profits.
• Investing in human capital will decrease the standard of living an overall quality of life.
• They have to bring in workers (labor) from other countries.
• They need well trained workers because their economy is diversified with advanced technology.

If a country does not invest in its human capital, how can it affect the country's gross domestic product (GDP)?

• Investment in human capital has little effect on the GDP.
• Most workers want to keep their jobs and do not care about the GDP.
• GDP is only affected if workers pay for the investment out of their own pocket.
• GDP may go down because poorly trained workers will not be able to do their jobs well.