1st 9 Weeks Test

What is the fundamental problem of economics that arises because resources are limited?

• Inflation

• Scarcity

• Unemployment

• Monopoly

In which economic system do customs and traditions play a significant role in decision-making?

• Market economy

• Command economy

• Traditional economy

• Mixed economy

In a free enterprise system, who primarily determines what goods and services are produced?

• The government

• Consumers and producers

• Central planners

• International organizations

Which of the following best describes the concept of opportunity cost?

• The cost of producing one more unit of a good

• The value of the next best alternative foregone

• The total cost of all resources used in production

• The cost of labor and capital combined

What happens to the quantity demanded of a good when its price decreases, assuming all other factors remain constant?

• It increases

• It decreases

• It remains unchanged

• It becomes zero

Which factor of production includes human skills and effort?

• Land

• Labor

• Capital

• Entrepreneurship

What is the primary goal of a free enterprise system?

• To ensure equal distribution of wealth

• To maximize government control

• To promote economic freedom and efficiency

• To eliminate competition

Which of the following is NOT considered a factor of production?

• Land

• Labor

• Money

• Capital

Which economic system is characterized by private ownership and the free market?

• Command economy

• Traditional economy

• Mixed economy

• Free enterprise

How does a command economy primarily differ from a market economy? choose two.

• In a command economy, prices are determined by supply and demand.

• In a command economy, the government makes all economic decisions.

• In a command economy, there is no private property.

• In a command economy, businesses are free to compete.