Unit 2 Economics Test Review

What role do consumers play in the economy?

• They produce goods and services

• They make decisions on what to buy

• They supply labor to businesses

• They regulate market prices

What must producers determine to satisfy consumer needs?

• The amount of goods to export

• The price consumers are willing to pay

• The number of workers to hire

• The type of advertising to use

Who are considered both producers and consumers?

• Only businesses

• Only consumers

• Workers

• Only the government

What is one way the U.S. government acts as a producer?

• By collecting taxes

• By using electricity in offices

• By building a new highway

• By regulating prices

How do cultural influences affect the economy?

• They determine tax rates

• They have an effect on both producers and consumers

• They set interest rates

• They control government spending

What is scarcity?

• Unlimited resources

• Limited quantity of goods and services

• Excess supply of products

• Abundance of consumer choices

How do consumers make a rational decision or choice?

• They use cost-benefit analysis

• They rely on intuition

• They follow trends

• They ask friends for advice

What is one benefit of having a budget?

• It allows you to spend more money

• It helps you know how much money you are making

• It encourages impulsive buying

• It eliminates the need for savings

Which of the following is an example of a fixed expense?

• Rent

• Groceries

• Entertainment

• Clothing

What is utility in economic terms?

• A person's economic satisfaction

• The total amount of money spent

• The number of assets owned

• The level of income earned