Economics CH1&2 Review

Microeconomics is the study of...

• Individual behaviors of people and businesses/small scale

• the study of the economy as whole /large scale

• The study of the fibers and atoms that make up money

• The believe that no government intervention should exist in the economy

Which type of Governments would have a command economy?

• Dictatorships, Monarchies, Communism

• Democracy

• Traditional Governments

• The United States

Why is a Laissez Faire approach to economics an important characteristic of a Free Market economic System?

• Because in a Free Market there is no government involvement

• Because Laissez Faire means that the government should control all decisions about the economy

• Because socialism is the main factor of a free market economy

• Because in the United States the citizens have no ownership in the economy

What can show the way a business or country uses resources, opportunity cost, and show Trade-off?

• Production Possibilities Curve (PPC)

• Supply and Demand

• Trade-Off

• National Resource Table

One major difference between socialism and communism is that communism believes to have equity and equality in the economy the government should have control, but in socialism they believe that....

• The monarchy should reign over the economy

• The dictator should control the economy

• The public/people control the economy

• That no economy shall exist

Which type of Economic System encourages a persons freedom to choose and grow the economy?

• Traditional Economy

• Command Economy

• Flexible Economy

• Free Market Economy

What are the three key questions every type of economy faces?

• What is being produced? How? For Whom?

• Why are good produced? How Much? Do I Like it?

• PPC? Microeconomics? Macroeconomics?

• Supply? Demand? Fiscal Policies?

Macroeconomics is the study of...

• Individual behaviors of people and businesses/small scale

• the study of the economy as whole /large scale

• The study of the fibers and atoms that make up money

• The believe that no government intervention should exist in the economy

In a Command Economy, the people are the ones that make all important economic decisions.. TRUE or FALSE?

• TRUE

• FALSE

Answer explanation

In a command economy the government controls all decision making power in the economy

When you choose to hang out with friends instead of studying for your first economics test, this scenario represents what?

• Command Economy

• Scarcity

• Opportunity Cost

• PPC