Econ Q1 Exam Review

What is the definition of economics?

• scientific study of supply and demand

• extended application of cost-benefit analysis

• limited description of opportunity costs

• study of efforts to satisfy seemingly unlimited wants with scarce resources

The study of economics is important because it enables us to

• describe our standard of living

• become better decision makers

• increase our consumption of consumer goods

• determine what goods ought to be produced

The three basic economic questions are

• What

• When

• How

• For Whom

Which group of people ultimately determines the products that a free enterprise economy produces?

• Congress

• business owners

• local government

• consumers

One problem with a market economy is that

• limits the choices of goods and services

• offers a high degreee of certaintty for its citizens

• does not provide for everyone's basic needs

• permits extensive government intervention

The minimum wage is an example of what economic and social goal?

• economic growth

• full employment

• economic security

• economic equitty

Why are entrepreneurs considered a driving force in an economy?

• own a great deal of land.

• are the largest number of people in an economy

• start new businesses

• provide most of the labor

Which feature of capitalism allows people to own and control their possessions as they wish?

• incentives

• competition

• private property rights

• profit motive

Who are the two primary players in the circular flow model?

• People

• Households

• Stores

• Businesses

What is the driving force behind the circular flow model?

• fame

• money

• profits

• reputation