ECON 5th SIX-WEEKS STUDY GUIDE

What does the point of intersection shown on this graph represent?

• Marginal Production

• Opportunity Cost

• Equilibrium

• Elasticity

Which idea BEST explains this news headline?

• Changes in consumption patterns make specialization difficult for producers.

• Declining competition in the marketplace can lead producers to limit their output.

• Limited capital resources require producers to weigh the benefits of alternatives.

• Rising costs for producers challenge them to find ways to increase profit margins.

How would a socialist government solve the problem created by the scarcity of resources?

• by determining base prices using the law of supply and demand

• by distributing limited goods and services in an equitable manner

• by rewarding efficiency in the production of consumer goods

• by supporting collective bargaining to ensure workers’ rights

The amount of a good or service that consumers are willing to buy at a particular price is defined as

• marginal utility

• final product.

• personal savings

• quantity demanded

• Consumption

• Fixed Costs

• Marginal Benefit

• Supply

What is the primary role of consumers in a free market economy?

• to sustain traditional production methods

• to balance the forces of supply and demand

• to meet government production goals

• to purchase goods and services

Which newspaper headline indicates a change in consumer tastes?

• Beef Industry Weakened by Transportation Strike

• Pizza Franchises are Affected by Antitrust Legislation

• Cheese Prices Increase Due to Rising Production Costs

• Pizza Sales are Affected by Popular Diets

Adam Smith advocated laissez-faire, which implies

• minimal governmental control.

• control by the working class.

• regulation by citizen commissions.

• businesses cooperating with government agencies.

Which method BEST describes how a free enterprise system addresses the basic economic problem of scarcity and choice?

• Central planning ensures equity of distribution.

• Price mechanisms are based on the laws of supply and demand.

• Subsidy programs prevent the decline of major industries.

• Market regulations are designed to maintain useful monopolies.

Karl Marx’s slogan “. . . WORKERS OF ALL LANDS UNITE!” is associated with which economic theory?

• communism

• capitalism

• utopianism

• mercantilism