Economics: After Christmas Review

What is opportunity cost? 

• The cost of producing one more product.
• A decision made based on consumer taste.
• The next best alternative given up based on scarcity.
• The intangible value of an item.

What are the advantages of a market economy compared to a command economy? 

• Security & equity
• Freedom & efficiency
• Government regulation & security
• Freedom & equity

What is scarcity?

• When you don't have enough money to buy the newest Iphone
• When the government doesn't allocate resources efficiently.
• When unlimited wants exceed productive resources.
• When Mrs. Mooneyhan has a shortage of A's on the midterm. 

What would cause a production possibilities curve to shift outward?

• Increasing prices
• Government regulation
• rationing
• Efficient investment in capital

How does government regulation impact a business? 

• Decrease the prices for the consumer
• Increase the prices for the consumer
• Deregulation causes safer products
• Deregulation causes the prices to decrease

How is productivity calculated?

• Dividing the number of unemployed by the labor force
• Looking at the relationship of inputs & outputs
• Looking at the market basket of goods & services
• Imports-exports

What happens to supply & demand when the price increases? 

• Supply decreases, demand increases
• Supply increases, demand decreases
• Increase in supply & demand
• Decrease in supply & demand

What is an example of a price floor? What does it cause? 

• minimum wage, surplus
• rent control, shortage
• minimum wage, shortage
• rent control, surplus

Which business structure has limited liability? 

• sole proprietorship
• partnership
• corporation
• franchise

What happens to employment when consumption increases?

• No change
• Increases
• Decreases
• Stagflation