Chapter 1 Review: Economic Decisions and Systems

It is not always easy to determine the products and services that satisfy needs and those that satisfy wants.

• True

• False

Which of the following would an economist most likely

classify as a need?

• gasoline for a florist’s delivery truck

• a college degree

• a flat-screen television

• a part-time job to earn extra money

An example of a natural resource is:

• sunlight

• a computer programmer

• a fishing net

• money

The basic economic problem is that consumers have too many products and services to choose from.

• True

• False

The decision-making process is best to use when:

• you already know the choice you will make

• you are facing a decision with several good

  alternatives

• groups rather than individuals are making a choice

• you don’t have enough money to pay for any of the

  choices

John has two hours before having to go to his part-time job. He is deciding between studying for a math exam and taking a nap. If John chooses to take a nap, the opportunity cost of his decision is:

• the rest he is getting

• the score he will earn on the math exam

• the wages from his part-time job

• all of the above

The first step in the decision-making process involves:

• defining the problem

• setting a goal

• identifying the choices

• evaluating alternatives

Which of the following addresses the economic question of how to produce?

• growing corn instead of potatoes

• requiring individuals to complete specific types

  of work

• producing more capital goods and fewer consumer

  products

• selling natural resources to other countries

In which of the following economic systems is the government’s role greatest?

• mixed

• traditional

• market

• command

The primary reason business owners make investments and take risks in a private enterprise economy is to:

• make a profit

• satisfy customer needs

• develop new products

• meet government requirements