Economics Unit 1 Review: Fundamentals of Economics

Where is a point located on a production possibilities curve if the economic system is experiencing inefficiency?

• Inside of the curve
• Outside of the curve
• On the curve

Which of the following is NOT a basic economic question?

• FOR WHOM to produce
• WHAT to produce
• WHEN to produce
• HOW to produce

What are used to produce something for a profit?

• Machines
• Money
• Factors of production

Is television set for sale at the electronics store an example of a CAPITAL or a CONSUMER good?

• CAPITAL
• CONSUMER

Habits, customs, and traditions answer the three economic questions in which type of economy?

• Command
• Traditional
• Market
• Mixed

Businesses sell goods and services in the...

• Product markets
• Factor markets

What is the purpose of the government in a command economy?

• To make sure everyone gets everything they need
• To encourage entrepreneuers
• To make the major economic decisions
• To promote economic freedom

What is the opportunity cost of Cindy purchasing ice skates for $35?

• $40 in cash
• The ballet shoes she has at home
• The time she took to make the decision
• Something else she could have bought with the money

Tomatoes being picked to use on a McDonald's hamburger is an example of which factor of production?

• Land
• Labor
• Capital
• Entrepreneurs

Mixed economies can have characteristics of...

• Only market and command economies
• Any types of economic systems
• Command and traditional economies only