Economics final exam practice test

What is Economics the study of?

• Limited resources with unlimited wants

• How people choose to use their limited resources to satisfy their unlimited wants

• Four factors of production

• A compromise that involves giving up something in return for getting something else

What is meant by the concept of scarcity?

• A cash payment aimed at helping a producer to continue to operate

• The father of modern economics

• Something needed to survive like food, clothing, shelter.

• Limited resources within unlimited wants.

Who is Adam Smith?

• The father of modern economics/wants necessitites and things that make life easier

• General understanding of he way resources will be distributed

• Free market economic system

• name for mixed econimes

What is the main difference between a need and a want? (Select all that apply)

• A want is activities done for us by others.

• A need is something needed to survive

• A want is something that is desirable but not needed

• A need is a physical object produced for sale.

What is the main difference between a good and a service?

• Goods is something needed to survive like food, clothing and shelter

• Goods are physical objects that are produced for sale

• Service are activites done for us by others

• Service is something that is desireable but not needed

Identify each factor of production

• Land

  Labor

  Capital

  Entrepreneurship

• Land

  Logo

  Ethos

  Pathos

• Labor

  Capitial

  businesses

  Money

• Life

  Land

  Money

  Entrepreneurship

What is meant by the concept of a tradeoff?

• A compromise that involves giving up something in return for getting something else.

• Any action is the value of the next best alternative that you could've chosen instead

• General understanding of the way resources will be distributed

• The three basic questions that society needs to answer when it comes to the economy

What is meant by the concept of opportunity cost?

• Any action is the value of the next best alternative that you could have chosen instead.

• Political and economic philosophy that calls for property to be owned by society as a whole

• Limited resources within unlimited wants

What are the three basic questions that society needs to answer when it comes to the economy? Select all that apply.

• What goods and services are to be produced?

• How are goods and services to be produced?

• For whom are goods and services to be produced?

• Why are goods and services to be produced?

Explain the main advantage and disadvantages of a traditional economy.

• Advantages: General understanding of the way resources will be distributed

• Disadvantages: Nothing changes, if so it can disrupt the economy

• Advantages: low unemployment, focus on the worker as opposed to profits

• Disadvantages: Poor working conditions, economic dispriorties