Economic Systems

Which of the following is not included in the study of economics?

• Scarce resources

• Choice

• What people should buy

• Opportunity cost

A new dam is build in Turkey to provide hydroelectric power and a water supply. What is the opportunity costs to the economy of building the dam?

• The cost to households and business of consuming the water supply.

• The benefits forgone from the other uses of the money used to build the dam.

• The cost to consumers of using hydroelectric power.

• The money used to pay for the construction and maintenance of the dam.

A firm can produce a number of combinations of 2 goods. It can either produce 500 shnibbles and 300 boggles, or 600 shnibbles and 250 boggles. What is the opportunity cost of producing and extra 100 shnibbles?

• 100 boggles

• 250 boggles

• 50 boggles

• the extra wages paid to workers

In economics, resources are also known as:

• workers and machines

• raw materials

• factors of production

• profits

In which of the following situations would money cease to be a good store of value?

• prices of goos and services are falling slowly

• high unemployment

• prices of good and services are rising rapidly

• prices of goods and services are rising slowly

All of the following are good characteristics of money except:

• it's durable

• it's unlimited in supply

• it's generally accepted

• it's portable

The basic problem faced by all economies is:

• rising prices

• unemployment

• scarcity of resources

• low economic growth

The problem of what to produce in a planned economy is solved mainly by:

• consumers

• the profit motive

• market forces

• government directives

In a free market economy, the price mechanism:

• helps the government to provide services

• measures the total value of wealth

• makes profits for businesses

• determines the allocation of resources

During the 1990s the economies of Eastern Europe changed from planned to market economic systems. Which of the following best describes the change?

• More centralized governments planning to allocate resources

• Fewer price controls

• Increased dependence on the price mechanism to allocate resources

• Increased resource unemployment