Chapter 1 and 2: Economics and Business

The basic economic problem results from scarcity.

• True

• False

Each of the following is one of the three economic questions that must be answered by all nations except:

• What goods and services will be produced?

• How will the goods and services be produced?

• Who will receive the profits earned when goods and services are produced?

• What needs and wants will be satisfied with the goods and services produced?

In a ________ the resources are owned and controlled by the government.

• Command Economy

• Market Economy

• Mixed Economy

• Traditional Economy

________ refers to the quantity of a good or service that businesses are willing and able to provide.

• Demand

• Supply

• Market Price

A demand curve illustrates the relationship between quantity demanded of a product and ________.

• Profit

• Price

• Production Cost

The primary reason why businesses invest resources and take risks is to ________.

• provide jobs

• produce goods and services

• improve their products

• earn a profit

The quantity of a good or service that consumers are willing and able to buy is called

• Supply

• Economic Want

• Demand

• Economic Amount

It is an implicit agreement between the buyers and the sellers

• Equilibrium

• Surplus

• Shortage

• Waste

Which of the following happens when the Qs is greater than the Qd?

• Equilibrium

• Surplus

• Shortage

• Consumer surplus

What do you call the amount where consumers get what they want and suppliers could sell what they’re offering?

• Quantity Demanded

• Quantity Supplied

• Equilibrium price

• Equilibrium quantity