10 Week Review p.1

Economics can best be described as

• how governments set social policy
• the influence of the Federal Reserve on history
• the use of scarce resources that have alternative uses
• The distribution of wealth in society

The resources used in the production of goods and services are limited, so society must make choices about how to use resources. This is the concept of:

• public goods
• scarcity
• shortage
• surplus

Which of the following is not a key economic question?

• What goods and services should be produced?
• How should these goods and services be produced?
• How should these goods and services be distributed?
• How do we ensure that businesses are profitable?

What is the opportunity cost?

• The cost of producing one additional unit of a good or service
• The cost of giving up the next best alternative to a chosen option
• The monetary value of a resource
• The total cost of production

What is a trade-off?

• The process of exchanging goods and services between countries
• The act of giving up one thing for another
• The concept of producing more with fewer resources
• The government's control over the economy

Which of the following best represents the production possibilities curve?

• A graph showing the relationship between price and quantity demanded
• A curve showing the maximum combination of goods an economy can produce
• A diagram illustrating the flow of money in an economy
• A line graph representing the relationship between unemployment and inflation

What is a mixed economy?

• An economy where the government owns and controls all resources
• An economy where individuals own and control all resources
• An economy where both government and individuals own and control resources
• An economy where resources are allocated based on market demand and supply

When demand increases, what happens to a demand curve?

• It shifts left.
• It shifts right.
• No movement occurs.
• The quantity does not change

Which of the following is an example of a price floor?

• tax cut
• subsidy
• minimum wage

• tax credit

What is the law of supply?

• As the price of a product decreases, the quantity supplied increases
• As the price of a product increases, the quantity supplied increases
• As the price of a product increases, the quantity supplied decreases
• As the price of a product decreases, the quantity supplied decreases