Unit 2 - Part 1 - Test Review

What is a tradeoff? What is opportunity cost?

• A tradeoff is choosing between two things that can't be had or done at the same time; an opportunity cost is the loss of potential gain from among other alternatives, when one alternative is chosen.

• An opportunity cost is choosing between two things that can't be had or done at the same time; a tradeoff is the loss of potential gain from among other alternatives, when one alternative is chosen.

What are the 4 resources needed for production?

• Natural resources, human resources, capital resources, and expertise

• Natural resources, financial resources, technological resources, and labor

• Human resources, financial resources, technological resources, and expertise

• Capital resources, natural resources, technological resources, and labor

What is scarcity?

• Abundance of resources

• Limited nature of resources

• Unlimited wants

• Excess supply

Which statement is more TRUE?

• Economics is about human behavior and how we make choices.

• Economics is primarily about money

In order to meet the needs of its people, a society must answer what three basic questions?

• What is the population, what are their needs, and how to fulfill them?

• What are the resources, who owns them, and how are they distributed?

• What to produce, how to produce, and for whom to produce?

• What are the laws, who enforces them, and how are they applied?

An economic system is used by governments and societies to:

• Regulate the production and distribution of goods and services

• Determine the cultural values of a society

• Establish political alliances

• Control the weather patterns

____________ are all the components needed for production including natural resources, labor, capital goods, and expertise.

• Resources

• Products

• Services

• Markets

In theory, what is the purpose of an economic system?

• To allocate resources efficiently and ensure economic stability

• To create social hierarchies and control populations

• To promote cultural values and traditions

• To eliminate all forms of trade and commerce

How many major types of economic systems are there in the world?

• Two

• Three

• Four

• Five

Which of the following is NOT one of the 4 major types of economic systems?

• Traditional

• Centrally Planned

• Market

• Feudal