Economics Study Guide Quiz

Who is known as the Father of Economics?

• Adam Smith

• Karl Marx

• John Maynard Keynes

• Milton Friedman

Why is scarcity a basic economic problem?

• Because resources are limited

• Because resources are unlimited

• Because resources are easily accessible

• Because resources are evenly distributed

Which is NOT one of the 4 basic economic questions?

• When to produce?

• How to produce?

• How much to produce?

• What to produce?

• For whom to produce?

How is 'How Much' and 'What' TO PRODUCE answered in a free market economy? (capitalist)

• Based on equal distribution

• Based on central planning

• Based on consumer demand and competition

• Government control

China is a communist country so it lacks which of the following:

• Trade incentives

• Manufacturing industries

• Well paying jobs

• Competition

What is the economic system in which the government makes all economic decisions?

• Capitalism

• Socialism

• Communism

• Feudalism

Who wrote 'The Wealth of Nations'?

• John Maynard Keynes

• Adam Smith

• Karl Marx

• Milton Friedman

What is opportunity cost?

• The financial gain from other alternatives when one alternative is chosen.
• The cost of purchasing an opportunity.
• The value of the chosen alternative.
• The loss of potential gain from other alternatives when one alternative is chosen.

Organize these options into the right categories

Groups:

(a) Free Enterprise

,

(b) Socialist

,

(c) Communist

• price controls

• State ownership of industry

• Welfare programs

• Government controll of factors of production

• Redistribution of wealth

• Centralized planning of economy

• Market-driven economy
• Private ownership of means of production
• Free education for all

• Universal healthcare

• Individual freedom in economic decisions
• Worker cooperatives

• Limited government intervention in economy
• Competition-based market

Which characteristic of the Free Enterprise system gives people the incentive to work, save and invest?

• Guaranteed income for all
• High taxes on profits
• Limited access to resources
• Private property