Mod 5: "Economics" Test Review

A system of producing, selling, and buying goods and services is known as...

• opportunity cost

• choice

• money

• economy

Which statement best characterizes opportunity cost?

• The amount of goods that business are able to produce.

• The amount of money left over after expenses have been paid.

• The number of people who are ready to buy a product at a certain price.

• The value of a product that you give up in a trade-off for another product.

In the four factors of production, which factor is "used to make a finished product"?

• natural resources

• capital

• labor

• entrepreneurs

In the four factors of production, which factor is "the machinery used to make a finished product"?

• natural resources

• capital

• labor

• entrepreneurs

In the four factors of production, which factor is "people who run the machines to make the finished product"?

• natural resources

• capital

• labor

• entrepreneurs

In the four factors of production, which factor is "people who finance the business to make finished products to sell "?

• natural resources

• capital

• labor

• entrepreneurs

Which of the following scenarios accurately illustrates the concept of economic interdependence?

• An entrepreneur decides to open a bakery and produces bread for the neighborhood.

• Good rainfall allows a farmer to produce more strawberries and he chooses to expand his business.

• Japan lacks iron to make steel, so Japan enters into a trading relationship with Australia and Brazil, who supply Japan with iron ore.

• South Africa is rich in diamonds, gold, and mineral resources, so South Africa crates a mining industry that produces much wealth.

You live in a society whose economic system is based on agriculture and bartering. A group of leaders decide all of the jobs and responsibilities for the people in the land. What type of economic systems does your society have?

• traditional

• command

• market

You live in a society whose economic system is controlled completely by the government. Central planners choose what products get made, who gets to make the product, who gets to sell the product, and how much to sell the product for. The government is in control of all the factors of production. Choices are limited. What type of economic systems does your society have?

• traditional

• command

• market

You live in a society whose economic system is based on the concept that anybody can make money (with little to no governmental interference). People are free to open up any business that they want to (within reason). It is based on the concepts like the law of supply, the law of demand, and competition. What type of economic systems does your society have?

• traditional

• command

• market