Economics Final Exam Review

What is the difference between shortage and scarcity?

• There is no difference

• A shortage is all goods; scarcity is only one

• A shortage is rising prices; scarcity is falling prices

• A shortage is temporary; scarcity always exists

Check all of the following goods that have inelastic demand.

• Water

• Gas

• Chicken nuggets

• Insulin

A Production Possibilities Frontier shows...

• Farm and factory goods produced by an economy

• Underutilization of resources

• The minimum possible output of an economy

• The maximum possible output of an economy

An economy that is producing the maximum number of goods and services (point falls on the PPC) is considered...

• Growing

• Trading Off

• Efficient

• Underutilized

To improve its standard of living, a nation's economy must...

• Grow through innovation

• Remain stable

• Reach economic equity

• Allow the central government to make economic decisions

Each society determines who will consume what is produced based on...

• Its unique combination of social values and goals

• The amount of factor payments

• Economic equity

• Needs and wants

Why do people need to buy and sell goods and services?

• People need to provide the market with goods and services

• No one is self-sufficient

• People buy and sell to maintain a competitive society

• People need to buy and sell goods to make a profit

What factors create the phenomenon of the "invisible hand"?

• Competition

• Specialization

• Supply

• Self-interest

If demand for a good is (a)   then consumers are NOT very responsive to changes in price.

Welfare includes all of the following EXCEPT...

• Social Security

• Medicare

• Occupational Safety and Health Administration

• Medicaid