Economics Final Exam Review.

Name the 4 factors of production and their incomes:

• Labor = Wages

• Land = Rent

• Capital = Interest

• Entrepreneurship = Capital

• Minerals = Dividends

Scarcity is when...

• Supply is greater than demand for a good or service.

• Demand is greater than supply for a good or service.

• Supply and demand are equal for a good and service.

What are the 3 basic economic questions?

• When to buy?

• What to produce?

• How to produce it and how much to produce of it?

• How to invest it?

• For whom to produce it for?

Opportunity cost is:

• Doubled during expansion phase of the business cycle.

• Always greater during inflation.

• What you give up in order to get your first choice.

• Equally distributed across the supply curve.

What economic model demonstrates opportunity cost?

• Production distribution graph

• Production Possibilities Curve (PPC)

• Possible Outcomes Curve

Another name for a free enterprise system is

• Democratic economy

• Modern economy

• Market economy

• Industrial economy

The economic system closest to pure command model is:

• Authoritarian

• Traditional

• Socialist

• Capitalist

The term that can be defined as the loss of the next best use of resources is:

• Cost Efficient Production

• Capital

• Scarcity

• Opportunity cost

Government subsidies have the effect of

• Lowering the cost of production

• Forcing producers to leave the market

• Reducing supply

• Raising costs

The only way to move along a supply curve for a product is for

• The number of sellers to increase or decrease

• The price of resources used to produce the product to increase or decrease

• Technological changes to occur

• The product’s price to increase or decrease