Economics Final Review

A car is an example of a:

• durable good.

• nondurable good.

• capital good.

• service.

Anika is considering whether to spend her last hour before an exam studying or watching a movie. The opportunity cost of her decision refers to:

• the dollar amount attached to the activity she chooses.

• the value of the next best alternative she gives up, which is studying if she chooses to watch a movie or watching a movie if she chooses to study.

• the cost of not choosing both activities.

• the cost of her time spent on the activity she chooses.

Economics is best defined as the study of how societies deal with:

• the factors of production.

• the problem of scarcity.

• the paradox of wealth.

• the division of labor.

The three synonymous terms to describe the U.S. economic system are free enterprise, capitalism, and:

• limited role of government.

• competition.

• free market.

• economic freedom.

Evelyn is starting a new tech company. Which of the factors of production involves her taking risks and combining resources to produce a service?

• land

• capital

• labor

• entrepreneurs

In a scenario where Elijah and Isla are exchanging goods without using money, which term best describes their economic activity?

• trade

• fiat

• specie

• monetary

How many distinct factors of production do economists recognize?

• one

• two

• three

• four

In a bustling city market, consumers like Lily, Isla, and Luna ultimately determine ______ to produce by their purchasing choices.

• when

• how

• what

• where

Imagine a scenario where the price of coffee beans has significantly increased. Which of these best describes the influence of these high prices on the behavior of coffee producers?

• They are an incentive for producers to produce more.

• They are an incentive for producers to buy less.

• They encourage producers to modify their supply schedules.

• They have no significant overall effect on producer behavior.

Consumers are powerful because

• they have more rights than corporations.

• they help decide a business's opportunity costs.

• they drive decisions about what to produce.

• their interests force producers to behave ethically.