Economics Pretest

Define Economics...

• The study of how people get rich.

• The study of government spending.

• The study of how people balance unlimited wants with limited resources.

• The study of how people interact with the environment.

The Basic Economic Problem is...

• People

• Debt

• Money

• Scarcity

Scarcity occurs when...

• unlimited needs and wants outweigh limited resources.

• people run out of money.

• a surplus of inventory.

• people are afraid of the economy.

What is an Opportunity Cost?

• A tariff

• Cost of the next best alternative use of resources.

• A cost to have access to an opportunity.

The United States uses the Free Enterprise System of Economics.

• True

• False

A person who starts a business to produce a new product in the marketplace is known as...

• a manager

• an entrepreneur

• an economist

• a shark

In the United States, who determines what goods and services should be produced?

• China

• The Government, Consumers, and Producers

• The Judicial Branch

• Factory Workers

Supply Requires...

• Producing what consumers want.

• Materials needed for a project.

• Warehouse stores like Costco

Demand is....

• A request made by your mom

• What people require of you

• What consumers want

• Rules and Regulations

What is an action of monetary policy?

• reduce taxes
• changing reserve requirements
• increase spending
• borrow money for deficit