Econ Unit 1

In economics, the concept that represents the cost of forgoing the next best alternative when making a decision is known as ____________.

• exchange cost

• opportunity cost

• trade-off

• decision cost

Investment opportunities, freedom of consumers, and responsive prices are all positive benefits of this type of economic system

• command

• traditional

• free market

• U.S. free enterprise

How does competition influence the Free Enterprise system?

• By ensuring the highest quality product at the most affordable price

• By enhancing working conditions

• By reducing salaries and earnings

• By restricting the range of available products

Incentives motivate people to

• work for economic freedom

• create a variety of goods

• impose government regulations

• work, save, and invest

Austrian economist who believed very strongly in free markets. In his book The

Road to Serfdom, he defended classical liberalism and free-market capitalism against socialist and collectivist thought.

• Friedrich Hayek

• John Maynard Keynes

• Adam Smith

• Milton Friedman

What is a key characteristic of a Communist society?

• A Communist society advocates for the common ownership of the means of production and the abolition of private property

• A Communist society promotes the idea of a society based on individualism and private ownership

• A Communist society encourages economic competition and free market principles

• A Communist society supports the idea of a class-based society

Which economic system is defined by

individuals and businesses making decisions about production and consumption based on market conditions?

• Command Economy

• Market Economy

• Mixed Economy

• Socialist Economy

Which economic system is characterized by a high degree of government / centralized control?

• Market Economy

• Mixed Economy

• Command Economy

• Capitalist Economy

What is the term for the human effort expended in the creation of products and services?

What is the primary natural resource used in the production of goods and services?