Economics Unit 1 Test Review

What do economists study?

• the weather

• migration of animals

• human choices

• politics

What is scarcity?

• The fundamental economic problem in which unlimited wants face limited resources.

• The solution to all our economic and political problems.

• The idea that we have unlimited resources but limited wants.

• It is the same thing as opportunity cost.

What are the four factors of production?

• land

• labor

• capital

• entrepreneurship

If this economy is operating at point A or C- what can we assume?

• it is operating at full potential

• it has idle resources

• it is impossible because it is outside the frontier

• it must be cheating because it is impossible.

What is the opportunity cost from moving from point A to point C?

• 100 cars

• 100 computers

• 2,200 computers

• 2,100 cars

• 700 cars

What best describes what is happening to this PPF?

• alternative possibilities

• opportunity cost

• economic growth

• scarcity

State planners in Country A met to decide what the country should focus on producing. They decided it would be in the country's best interest to use their limited resources to produce automobiles instead of consumer goods like textiles or electronics. The planners passed their decision down to the factories, and allocated to them the raw materials needed to produce automobiles. They also told them who the final products should be shipped to. What type of economic system is Country A?

• Free- market economic system

• Traditional economic system

• Command market system

• Mixed market system

Which one of these is the United States an example of?

• Mixed Market Economy
• Traditional Economy
• Pure Command Economy
•  Pure Market Economy

Which of the following is a characteristic of a market economy?

• The government limits the quantity of products made.

• The government limits the variety of products made.

• People have the freedom to choose from a variety of products.

• Prices are inflexible.

Which of the following represents marginal cost?

• the expense of producing one additional unit

• mortgage payments

• the sum of fixed costs and variable costs

• wages and raw materials