Economics Final Review

Paradox of value refers to the

• high value of an essential item and the low value of a nonessential item.

• high value of a nonessential item and the low value of an essential item.

• contradiction of what consumers want and what they need.

• contradiction between gross domestic product and market value

The most comprehensive measure of a nation’s wealth is provided by its

• gross domestic product.

• TINSTAAFL rating.

• product possibilities curve.

• capital goods.

Which of the following statements best describes the purpose of the production possibilities curve?

• It predicts the future production of a nation.

• It identifies trends in production.

• It shows which products are most profitable.

• It identifies all possible combinations of goods and services an economy can produce.

Which of the following descriptions best explains the meaning of opportunity cost?​

• the initial cost of starting a new business

• the cost of business failure

• the cost of choosing one alternative over another

• the risk associated with producing a new item

The efficient use of scarce resources leads to an increase in

• ​productivity.

• investment.

• scarcity.

• ​capital.

The study of economics involves​

• explaining how people deal with scarcity.

• studying how things are made, bought, sold, and used.

• explaining how incomes are earned and how jobs are created.

• all of the above.

Which of these statements describes a disadvantage of a traditional economy?

• Everyone knows his or her role.

• New ways of doing things are encouraged.

• New ways of doing things are discouraged.

• Difficult economic decisions are made by the state.

Which of these statements is descriptive of a market economy?

• Most media is state-owned and operated.

• The government determines what is produced and by whom.

• Major economic decisions are made for individuals, not by them

• Major economic decisions are made by individuals, not for them.

In which of these systems is the government most likely to provide people with goods and services they could not otherwise afford?

• a market economy

• a socialist economy

• a traditional economy

• a free-enterprise economy

Which of these countries has an economy most similar to that of the former Soviet Union?

• Sweden

• Norway

• South Korea

• North Korea