2nd Semester Exam (Econ)

The Law of ______ states that as production switches from one product to another, more resources are needed to increase production of second product.

• Increasing Opportunity Costs

• Supply and Demand

• Diminishing Marginal Utility

_______ is value of next-best alternative a person gives up.

• Opportunity cost

• Marginal cost

• Marginal benefit

Which of the following involves using resources to produce the maximum amount of goods and services?

• overefficiancy

• underutilization

• efficiency

Which term means "making decisions based on what you believe is the best combination of costs and benefits?"

• economizing

• motivating

• budgeting

Into what four categories do economist divide factors of production?

• resources, labor, money, and entrepreneurship

• resources, labor, capital, and entrepreneurship

• land, labor, capital, and entrepreneurship

What does the saying "There is no such thing as a free lunch" mean?

• most things cost something

• every choice involves costs

• items are free and have no cost

The principle that the government should not interfere in the economy is called _____.

• voluntary exchange

• regulation

• laissez faire

In ___________ Adam Smith challenged the idea that mercantilism was economically sound and instead argued for a system of free trade.

• Laissez Faire

• The Communist Manifesto

• The Wealth of Nations

In a communist economy, resources are owned by ____.

• individuals or the government

• governments

• individuals or businesses

An advantage of a pure market economy is that it ____.

• provides security to those who are not economically productive

• provides security to those who are not economically productive

• allows local communities to set their own economic development