Chapter 2, Section 2 & 3

1-Which one is not considered a factor that households offer?

• a) Land

• b) Capital

• c) Schools

• d) Labor

2-Who makes up the households in a circular flow diagram?

• a) There are no households in the diagram

• b) Consumers

• c) Producers

• d) Firms

3-Who provides the income in a circular flow diagram?

• a) Firms

• b) Friends

• c) Consumers

• d) Households

4-A circular flow diagram looks at what?

• a) How money, goods, and services move through the economy

• b) How schools are built in the economy

• c) How individuals move from one job to another

• d) How stores downsize the number of employees they employ

5-What is ONE example of ECONOMIC EFFICIENCY?

• a) Minimum wage

• b) Equal pay for equal work

• c) We determine the best use for our scarce resources

• d) Protection from layoff and illness

6-Gross domestic product is an important measure of which of the following goals?

• a) Economic growth

• b) Economic freedom

• c) Equity

• d) Full employment

7-Which economic goal is being described when talking about the ability to decide what to do with your own money?

• a) Economic growth

• b) Security

• c) Efficiency

• d) Economic freedom

8-What are TWO examples of ECONOMIC FREEDOM?

• a) Guard against inflation

• b) Businesses are free to choose who they want to hire

• c) Individuals are free to choose their own occupations

• d) Equal pay for equal work

9- The rivalry between sellers to get more customers by lowering costs & better goods/services

• a) voluntary exchange

• b) competition

• c) incentives

• d) legal equality

10- The concept that people have the right and privilege to control their possessions as they wish.

• a) legal equality

• b) open opportunity

• c) private property

• d) profit incentive