Economics Unit Test 1

How does the scarcity of resources contribute to international conflict?

• The abundance of resources makes distribution difficult

• Countries that possess and control resources have economic power over others

• World leaders want to be seen as kind and generous with their country’s resources

• Countries often compete for control over how to protect resources for environmental concerns

From 7pm to 10pm, Chris can either attend a basketball game, a wrestling match, or a concert. Suppose that Chris decides to attend the wrestling match and thinks to himself that if he did not go to the match he would go to the concert. What is the opportunity cost of Chris attending the wrestling match?

• Three hours of time

• Going to the concert

• Going to the basketball game

• Going to the basketball game and the concert

Which describes a mixed economy?

• Central planning

• Based off patterns from the past

• Has elements from several economic systems

• Free exchange between sellers and buyers

The United States government is LEAST LIKELY to be involved in the nation’s economy as a

• Consumer of goods and services

• Owner of the means of production and planner deciding what to produce

• Protector against false advertising and environmental hazards

• Regulator charged with preserving competition in the marketplace

In this type of economic system, the production of goods and services is controlled solely by the concept of supply and demand, businesses are operated for profit, and the government is not involved.

• Command

• Traditional

• Free Market

• Mixed

In the Kingdom of Saudi Arabia the government controls every aspect of oil production which makes up the majority of the country's economy. While other businesses are owned by individuals, the biggest segment of Saudi Arabia's economy is oil production.

Saudi Arabia's Economy would best be described as

• Pure market

• Almost all command

• A mixture between market and traditional

• A mixed economy with large amounts of command

What can you infer from this spectrum?

• Australia’s current government has no power over its domestic affairs.

• The Australian government spends relatively little time controlling their economy

• Russia is a Communist country

• Germany has a completely free Market

In a mixed market economy, which of these would MOST likely be considered a basic function of the government?

• To promote monopolies

• To regulate who can purchase services

• To ensure the financial well-being of all citizens

• To help correct market failures and redistribute income

The graph shows all the production possibilities for an economy that only produces X and Y. All of the following statements about this economy are true EXCEPT

• )Resources are fully utilized at points B and A

• producing at point C results in the underutilization of resources

• the combination represented at point D is unattainable, given the limitations of resources

• Point A represents the most efficient combination of X and Y that can be produced by this economy

What is true of the concept of increasing opportunity cost?

• It suggests that unlimited wants can be fulfilled within any economy

• It is irrelevant if the production possibilities curve is parallel to the origin

• It suggests that the use of resources to produce a set of goods and services means that as more of one is produced, some of the other must be sacrificed

• It means that resources are abundant and occasions to produce larger amounts of goods and services are unlimited