Economics - Unit 1 Review

Why is scarcity considered a fundamental economic problem?

• because resources are limited

• because governments control production

• because of high opportunity costs

• because people find decision-making difficult

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E.1A

What basic economic question is addressed in the press release?

• How to produce?
• What to produce?
• For whom to produce?
• How much to produce?

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E.1B

In a capitalist economy, who decides the quantity of goods to be produced?

• Government regulations

• Market research

• Consumer needs and wants

• Company's board of directors

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E.1B

In the context of the production-possibilities curve for food and clothing, what does Point B signify?

• A combination that is achievable only if all resources are used

• A combination that is unattainable with the current resources and technology

• A combination that requires a technological breakthrough to achieve

• A combination that can be achieved without exhausting all resources

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E.1D

E.21E

How can Point F on the production-possibilities curve be reached?

• By maximizing the use of current resources

• By restricting the use of available resources

• By implementing innovative technologies

• By encouraging workers to focus on their tasks

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E.1D

E.21E

Choosing to study for an exam instead of going to a movie is an example of —

• demand

• supply

• opportunity cost

• economic system

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E.1D

Which of the following best completes the graphic organizer?

• Problems of command economies
• Benefits of the free enterprise system
• Solutions to reducing government debt
• Arguments for expanded government regulation

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E.1D

In a free enterprise system, competition typically leads to —

• increased government control

• higher product prices

• limited consumer options

• better product quality

What is a key feature of the U.S. free enterprise system?

• State ownership of businesses

• Government regulation of prices

• Consumer-driven market responses

• Collective ownership of production resources

In what way does the event of the headline affect the circular flow model?

• Incomes for households and firms would increase.
• Firms and households would incur higher expenditures.
• Government expenditures and incomes would be offset.
• Expenditures for households would decrease, but not for firms.

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E.21E