Econ Final Exam Review 1

1.        Economics is the study of how different countries deal with this basic economic problem stating that there is not an infinite amount of resources in the world

• Trade-off

• Opportunity Cost

• Scarcity

• Incentive

Mary is weighing her options for spending her time after school. She decides to attend basketball practice. In making this choice, she chose not to spend that time doing homework, spending quality time with her friends, and studying for her Econ final; these forgone options are her

• Trade-offs.

• Opportunity Cost

• Scarce resources

• Incentives

The most desired trade-off given up when making a decision is the

• Incentive

• Scarce resource

• Opportunity cost

• Comparative advantage

The total value of all the final goods and services purchased within a country in a given year is known as

• Absolute advantage

• Gross Domestic Product

• Inflation Rate

• Consumer Price Index (CPI)

During Vice City’s recession, they still had $184 invested by private companies, consumers spent $304, workers earned $150, they exported $48, the government spent $226, and businesses profited $410. What is the GDP of Vice City? (Figures are in millions of dollars) 

• $762 Million

• $1.32 billion

• $1.10 billion

• $988 million

Which type of economy relies entirely on the “invisible hand” of the free market to guide the decisions of buyers and sellers to the benefit of the entire economy?

• Command economy

• Market economy

• Mixed economy

• Traditional economy

Which type of economy allows the government to control all the means of production?

• Command Economy

• Market Economy

• Mixed Economy

• Traditional Economy

Which type of economy best describes the United States?

• Command Economy

• Market Economy

• Mixed Economy

• Traditional Economy

Which of these would NOT be counted in a country’s GDP?

• Haircut

• Garage sale purchase

• Amazon building a new fulfillment center

• Exports

Any point that lies above the production possibilities curve (PPC) is considered

• Efficient

• Inefficient

• Maximizing Potential Output

• Impossible