Business Essentials Test Review 1

What is the economic problem?

• We have limited wants but unlimited resources.

• We have unlimited wants but limited resources.

Which is the strongest motivating factor in a free market economy?

•  Ability to earn a profit
•  Government regulations
• A.  Few consumer choices

In a market economy, who decides on the prices of goods and services?

• government
• buyers and sellers
• firms
• local leaders

When demand exceeds supply you have ________________

• Surplus

• Scarcity

• Normal Balance

• Economic Problem

Raw materials supplied by nature

• natural resources
• consumers
• human resources
• goods

When you give up something to have something else.

• wants
• services
• trade-off
• goods

In a command economy, buying decisions are made by consumers.

• True
• False

The value of the next-best alternative that you did not choose is called

• trade-off cost
• scarcity
• opportunity cost
• economic cost

Those who buy and use goods and services.

• consumers
• human resources
• economics
• goods

The quantity of a good or service that consumers are willing and able to buy is called

• supply
• an economic want
• demand
• this is not a correct answer