ECONOMICS 3

What is NOT included in the three economic questions?

• what to produce

• how to produce

• where to produce

• for whom to produce

The philosophy that the government should take a hand's off approach to the economy.

• Laissez-faire

• Economies of scale

• Capitalism

• Law of self-interest

The study of how individual and business decisions interact.

• Economics

• Microeconomics

• Economies of scale

• Transaction

The degree of wealth and material comfort available to a person or community.

• Comfortability

• Economy of scale

• Standard of living

• Financial resource

The four factors of production: land, labor, capital and _________.

• gold

• advertisement

• marketing

• entrepreneurship

The boundary between what can and cannot be produced given the set amount of resources.

• Circular flow model

• Production possibilities frontier

• Opportunity cost

• Production gap

When a person or firm can produce at a lower opportunity cost than others.

• Comparative advantage

• Absolute advantage

• Monopoly

• Trade-off

When the price of a cup of coffee increases, some consumers opted to buy tea. We can safely say that tea is a/an __________ good.

• alternative

• substitute

• complimentary

• complementary

Which of the following illustrates the “law of supply”?

• As price increases, quantity demanded decreases.

• As quantity demanded increases, quantity supplied also increases.

• As quantity supplied decreases, price decreases.

• As price increases, quantity supplied increases.

When quantity demanded equals quantity supplied.

• Law of Diminishing Marginal Utility

• Market equilibrium

• Break-even point

• Law of supply and demand