Economics Topic 2 (Part 1) Test

Select the three key economic questions

• What goods and services should be produced to meet consumer needs?

• Why are goods and services produced?

• How should these goods and services be produced?

• When should goods and services be produced?

• Who consumes these goods and services?

"Hoodies are produced." Which key economic question does this example BEST answer?

• What goods and services should be produced to meet consumer needs?

• How should these goods and services be produced?

• Who consumes these goods and services?

Select all of the following that might be a general economic goal of societies.

• Efficiency

• Equity

• Profit

• Freedom

• Growth

Fill in the blank: A __________ economy only produces enough goods to support its community and does not produce enough surplus to sell and grow.

• Command

• Centrally Planned

• Free-market

• Traditional

True or false: Markets are any arrangement that allows buyers and sellers to exchange things.

• False

• True

Select all that apply: Specialization leads to efficiency by saving people...

• Time

• Resources

• Goods

• Services

All of the following are characteristics of a free-market economy except...

• It is profit motivated.

• There is a lot of government intervention.

• The market adapts to various trends.

• Competition amongst businesses exist.

True or false: One of the first modern economists, Adam Smith, argued that resources, goods, and services should be distributed equitably or equally amongst the public/people.

• True

• False

Competition is BEST defined as...

• The hope of reward or fear of penalty that encourages a person to behave in a certain way.

• The power of consumers to decide what gets produced.

• The struggle among consumers for the dollars of producers.

• The struggle among producers for the dollars of consumers.

Non-price competition is when producers compete by offering...

• an innovative alternative to what is already on the market.

• the lowest price for a good that is identical to goods made by others.

• higher quality goods or goods with different features.

• nothing new to consumers because what they have already works.