Unit 3: Economics 24/25

What does the Incentive Theory suggest about our behavior?

• Our behavior is influenced by our genetic makeup.

• Our behavior is dictated by a desire for external rewards.

• Our behavior is determined by internal thought processes.

• Our behavior is random and unpredictable.

Answer explanation

Incentive Theory posits that our behavior is driven by the pursuit of external rewards, such as money or praise, rather than internal factors or randomness. Thus, the correct choice is that our behavior is dictated by a desire for external rewards.

Which of the following is an example of a service?

• A hamburger

• A police officer

• A pair of boots

• A kite

Answer explanation

A police officer provides a service by maintaining law and order, while the other options (hamburger, boots, kite) are tangible goods. Therefore, the correct example of a service is a police officer.

a source of supply for one's needs or a source of a nation's wealth.

• resource

• import

• supply

• scarcity

Answer explanation

The term 'resource' refers to a source of supply for needs or a nation's wealth, making it the correct choice. 'Import' relates to goods brought in, 'supply' is more general, and 'scarcity' indicates a lack of resources.

What does the term "economy" refer to in a society?

• The educational institutions and universities

• The use of money, resources, and means of production

• The political parties and their policies

• The cultural and entertainment activities

Answer explanation

The term "economy" in a society refers to the use of money, resources, and means of production. It encompasses how goods and services are produced, distributed, and consumed, making it the correct choice.

a government tax on goods that come into a country; duty

• export

• economy

• tariff

• import

Answer explanation

A tariff is a government tax imposed on goods imported into a country. It is specifically designed to regulate trade and generate revenue, making 'tariff' the correct answer to the question.

In the context of an economy, who are considered the primary agents as depicted in the diagram?

• Investors and Shareholders

• Government and Non-profits

• Producers and Consumers

• Importers and Exporters

Answer explanation

In an economy, the primary agents are Producers and Consumers. Producers create goods and services, while Consumers purchase and use them, forming the core of economic activity.

What does the term "PRODUCTION" mean?

• The process of promoting something

• The act of making something to sell or use

• The method of preserving something for future use

• The technique of performing a play or film

Answer explanation

The term 'PRODUCTION' refers to 'the act of making something to sell or use', which encompasses the creation of goods or services for commercial purposes, distinguishing it from promotion, preservation, or performance.

______ is a type of economic system where business is privately owned and run by the people, rather than by the government.

• economy

• socialism

• capitalism

• communism

Answer explanation

Capitalism is an economic system characterized by private ownership of businesses and means of production, allowing individuals to operate for profit, unlike socialism and communism, which involve government control.

The amount of a product which is available and the amount that is wanted by customers.

• CAPITALISM

• SUPPLY AND DEMAND

• PRODUCTION

• INCENTIVE

Answer explanation

The phrase describes the relationship between the quantity of a product available (supply) and the quantity desired by consumers (demand). This concept is fundamental in economics, making 'SUPPLY AND DEMAND' the correct answer.

_____ is a type of government and philosophy. Its goal is to form a society where everything is shared equally. All people are treated equally and there is little private ownership.

• communism

• capitalism

• socialism

• marketing

Answer explanation

Communism is a political and economic ideology that aims for a classless society where all property is publicly owned, and each person works and is paid according to their abilities and needs, ensuring equality and minimal private ownership.