Chapter 5, 6, & 7 Review

The economic problem states that____.

• human wants are limited, but resources are unlimited

• human needs are limited, but human wants are unlimited

• resources are limited, but human wants are unlimited

• resources are limited, but human needs are unlimited

Another term for a centrally-planned economy is ____.

• command economy

• market economy

• mixed economy

• traditional economy

One of the facets of macroeconomics is the study of how ____.

• the government manages the money supply

• businesses try to compete with each other

• individuals invest their money

• people spend their income

Which of the following statements about natural resources is true?

• Natural resources are the goods produced by a nation.

• Natural resources are equally distributed among nations.

• The size of a nation can affect the quantity of its natural resources.

• Most natural resources are easy to replenish quickly.

The amount of work a person can do in a specific amount of time is known as ____.

• labor

• capital

• utility

• productivity

Technology that is powered by steam and fuel combustion is ____ technology.

• early

• digital

• communications

• industrial

Scarcity develops when ____.

• people voluntarily limit their needs and wants to save resources

• demand for a resource is higher than the quantity available

• resources are allocated fairly among various businesses

• more resources are available than are being used

When the supply of a product is lower than the level of demand, which of the following typically occurs?

• prices become lower

• price equilibrium occurs

• prices become higher

• prices are not affected

Which type of economy is also known as free enterprise or capitalism?

• traditional economy

• market economy

• command economy

• mixed economy

One of the disadvantages of a free-enterprise system is ____.

• safety may become a low priority to businesses

• businesses must compete to sell their goods and services

• individuals do not have the right to own property

• prices for goods are set by the forces of supply and demand