ECON MIDTERM PRACTICE

Economics is the study of

• the production of goods/services

• the consumption of goods/services

• the distribution of goods/services

• all of the above

Why do we study economics?

• to make money

• trying to find the optimal solutions to keep everyone happy

• to be a boss

• all of the above

Scarcity is when you have (choose two)

• unlimited needs/ wants

• desert

• limited resources

• no money

The three major questions that economic systems try to answer are (choose three)

• what to produce?

• how to produce it?

• how much to charge?

• whom to produce it for?

What you lose when you make the decision to do something else is known as _______________.

• marginal analysis

• supply

• demand

• opportunity cost

A reason to do something is an ______________.

• incentive

• punishment

• reward

• none of the above

Three types of incentives are (choose three)

• financial

• moral

• friendly

• coercive

What are three ways governments can improve market conditions? (choose three)

• force people to behave

• provide a legal framework

• provide public goods

• ensure competition

What usually happens when a country prints too much money?

• deflation

• inflation

• stagflation

• none of the above

Society faces a short term trade off between __________ and _________. (Choose two)

• unemployment

• welfare

• GDP growth

• inflation