Fundamentals of Economics Test Review

Which is not one of the four basic economic questions by Adam Smith

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

Why is scarcity a basic economic problem?

• resources are limited

• governments limit production

• opportunity costs limit production

• people have trouble making choices

What does allocation of resources mean?

• Distribution of resources

• Sale of resources

• Revenue

• importing by increasing production

In a Free Enterprise Economic System--

how is the economic question, how much to produce answered?

• Census data

• Profit projections

• Consumer demand

• Government quotas

Individual who creates new businesses and inovations, bearing most of the risk and enjoying most of the rewards

• Investor

• Landlord

• Laborer

• Entrepreneur

Which factor of production would be considered land

• Coal

• Factory

• Money

• Tractor

True or False- Paying rent instead of purchasing tickets to a concert is an example of Opportunity Cost

• True

• False

Which two are characteristic of Free Enterprise System?

• Price Control

• Small Business Owners

• Wage incentives

Which 2 are characteristic of a Communist economic system?

• Competition

• Manufacturing industries

• Allocation of goods and services

Which is characteristic of ALL kinds of economic systems?

• Price controlls

• Wage incentives

• Small business owners

• Distribution of goods and services