Economics Final Exam Review

Which of the following best defines economics?

• Study of supply and demand

• Study of microeconomics and macroeconomics

• How to share limited resources amongst wants/needs

• How citizens can best produce resources

Which best defines scarcity?

• Insufficient supply; not enough to go around

• To be wanted and have value

• Supply is greater than demand

• Demand is greater than supply

Which best defines opportunity cost?

• The cost of producing a good or service

• The value of the next best alternative

• The value of all alternatives

• The cost of consuming a good or service

What defines "factors of production"?

• Resources used to produce goods and services

• Resources used to consume goods and services

• Resources used to dispose of undeeded goods

• Resources used to maximize the amount of goods produced

Which of the following best defines a traditional economic system?

• Political leaders organize production

• Everyone is involved in production and distribution

• Customs and traditions are used to organize production and distribution

• None of the above

Which of the following best defines a command economic system?

• Political leaders organize production and distribution

• Everyone is involved in production and distribution

• Customs and traditions are used to organize production and distribution

• None of the above

Which of the following best defines a market economic system?

• Political leaders organize production and distribution

• Everyone is involved in production and distribution

• Customs and traditions are used to organize production and distribution

• None of the above

The most important goal of a market economy is:

• Competition

• Winning

• Profit

• Economic equality

Which of the following best defines the law of demand?

• As price increases, quantity demanded decreases

• As price increases, quantity demand increases

• How a change in price effects the quantity demanded

• How a change in price effects the quantity supplied

Which of the following best defines the law of supply?

• As price increases, quantity supplied decreases

• As price increases, quantity supplied increases

• How a change in price effects the quantity demanded

• How a change in price effects the quantity supplied