Business Foundations Chapter 1 Review

All goods or services produced by an economy requires

• a government

• the four factors of production

• scarcity

• opportunity cost

This type of economy is based on customs and traditions.

• none of these

• market

• command

• traditional

Supply and demand determine what is produced in this type of economy.

• command economy

• traditional economy

• market economy

• none of these

This occurs when supply exceeds demand.

• shortage

• surplus

• price floor

• price ceiling

This is the degree in which demand is affected by the price.

• price ceiling

• price floor

• surplus

• demand elasticity

Insurance companies, brokerage firms, and investment bankers are examples of these.

• banks

• financial markets

• depository institutions

• non-depository institutions

This provides the means for purchasing and selling securities.

• financial market

• bank

• incentive

• economy

The price where there is no overage or shortage of a product.

• elastic demand

• equilibrium point

• price floor

• price ceiling

The is the maximum price that can be charged for goods or services, and is set by the government.

• shortage

• surplus

• price floor

• price ceiling

The principle that states people must decide which goods and services to use due to limited resources and unlimited wants is known as

• economics

• opportunity cost

• scarcity

• shortage