Economics Midterm Review

The definition of Scarcity is...

• An unlimited amount of resources to meet limited wants and needs
• A limited amount of resources to meet unlimited wants and needs.
• When people use time and energy to create events
• a city where individuals commit themselves to unlimited wants and needs

What is opportunity cost?

• the value of the next best option that is not selected when a choice is made.

• there is not enough of it.

• things people make to earn money.

• actions people do to earn money.

Michael has been invited by a friend to go fishing on Friday. His parents are going to a concert. Michael chooses to go fishing with his friend. What is his opportunity cost?

• fishing with a friend

• going to a concert

Which of the following examines the costs and expected benefits of a choice?

• cost-benefit analysis

• choice-benefit analysis

• choice-profit analysis

• cost-pro analysis

A focus on developing only certain skills or producing only certain goods/services

• Imports
• Exports
• Specialization
• Globalization

Which choice best describes the economic problem of scarcity in the world?

• People have limited wants there is an unlimited amount of resources.

• People have unlimited wants but there is a limited amount of resources

• People have no wants so resources don't matter

Which economic system is based on government control?

• Traditional

• Command

• Market

In which economic system does the government control all the resources?

• Traditional

• Command

• Market

In which economic system is the protection of private property rights essential?

• Command

• Traditional

• Market

• Socialism

Producers and consumers determine how to use resources and make goods based on supply and demand in the market, without government interference.

• Market Economy

• Traditional Economy

• Command Economy

• Mixed Economy