Economics Review MP1/MP3

When there is scarcity for certain goods or services what happens?

• a company or business can influence the government

• Requires people to make choices, leads to countries needing to trade, and prices increase

• Creates more Supply than demand

• demand for a product drops really low

When people have unlimited wants and needs and there's limited resources, this creates what?

• Scarcity

• Opportunity Cost

• Communism

• Trade Off

Land, labor, capital, and entrepreneurship

are considered _____

• Supply & demand

• Factors of production

• necessary for life

• create a monopoly

What is a True Free Market economy?

• Economic System in which businesses can be privately owned, consumers decide supply and demand, and there is NO government involvement

• Economic system where traditions and long held beliefs run the economy. No money is used

• Economic system in which the Government controls ALL aspects of the economy

• Economic System in which business can be owned by people, supply and demand are decided by consumers and businesses, and there is SOME government involvement

What is a MIXED Market economy?

• Economic System in which businesses can be privately owned, consumers decide supply and demand, and there is NO government involvement

• Economic system where traditions and long held beliefs run the economy. No money is used

• Economic system in which the Government controls ALL aspects of the economy

• Economic System in which business can be owned by people, supply and demand are decided by consumers and businesses, and there is SOME government involvement

What is a COMMAND Market economy?

• Economic System in which businesses can be privately owned, consumers decide supply and demand, and there is NO government involvement

• Economic system where traditions and long held beliefs run the economy. No money is used

• Economic system in which the Government controls ALL aspects of the economy

• Economic System in which business can be owned by people, supply and demand are decided by consumers and businesses, and there is SOME government involvement

Demand is when consumers want a good/service and have the money to pay for it... TRUE or FALSE

• FALSE

• TRUE

The Law of Demand states that when the price of good is very high, demand for that good ______

• Increases

• Stays the same

• Decreases

• creates equilibrium

Goods that are in high demand when a person's income decreases are called what? (ramen noodles, canned food, microwaved meals, etc)

• Inferior Goods

• Free Market Goods

• Superior Goods

• Necessity Goods

Answer explanation

When people don't have a lot of money or lose their job, inferior goods (cheaper options) become more demanded by the consumer because they cost less. (ramen, canned goods, microwave meals, etc)

Law of supply states that as prices go higher for a good, the more of that particular good will be supplied... TRUE or FALSE?

• TRUE

• FALSE

Answer explanation

It is true because businesses are willing to supply more of a good at a higher price to make more of a profit