Unit 1 Fundamentals of Economics Review

What is one way that technology can improve the production of goods?

• Websites can allow consumers to purchase goods online.

• Container ships can transport a number of goods at once.

• Automation can create goods more cheaply and easily.

• Airlines can send goods from one place to another.

Economists can use new technology to

• study data and patterns.

• create and apply automation.

• improve production and shipping.

• increase demand and consumption.

Who was Adam Smith?

• He was a philosopher who promoted the idea of free enterprise.

• He was an economist who spoke against the market economy.

• He was an official who ran an important government agency.

• He was a producer who operated a factory in Scotland.

In a competitive market, a computer store offers customers a warranty to help pay for any future damages. This is an example of

• following a federal regulation.

• lowering prices for customers.

• reducing the risk for consumers.

• creating a new or better product.

Public property is land or goods

• owned by an individual.

• owned by the government.

• used for private businesses.

In a mixed market economy, what is a typical way the government can reduce unemployment?

• The government can pay for projects to create work.

• The government can control factories to provide jobs.

• The government can create new farm fields to hire workers.

• The government can raise taxes to encourage employment.

What is one example of a closed economy?

• A barter system that does not rely on money or other currency.

• A restricted system that blocks trade with international partners.

• A trade-based system that encourages the flow of goods and services.

• An old-fashioned system that preserves traditional choices and customs.

How does a socialist government with a command economy manage its economy?

• The government lets producers set wages for workers.

• The government does not own all homes and other forms of housing.

• The government allows consumers to make their own choices.

• The government controls factories and other forms of production.

It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________.

• opportunity cost; production cost

• production cost; opportunity cost

Look at the following chart; decide what Producer A's opportunity cost would be.

• Analyzing the climate to see which fruit would grow better.

• Studying the profitability of growing apples versus oranges.

• Researching what competitors are doing.

• Choosing to grow both apples and oranges or only apples.