1st Semester Exam

Which of the following is not one of the three basic economic questions?

• What will be charged?

• What will be produced?

• How will it be produced?

• For whom will it be produced?

Which of the following is, or could be, an example of a traditional economy?

• A small rural community

• The Soviet Union

• North Korea

• Spain

Which of the following has a command economy?

• A small rural community

• The Soviet Union

• North Korea

• Spain

What is meant by laissez faire?

• The government should let the economy do its own thing.

• The government should do what it can to help the economy.

• The economy is most secure when controlled by corporations.

• People should follow in the footsteps of their parents and grandparents.

Which of the following has a mixed market economy?

• North Korea

• England

• Spain

• The United States

• Norway

Which of the following is not true about scarcity?

• Scarcity means something is limited.

• Because money is scarce, you have to make decisions about how to spend it.

• Because resources are scarce, it can be challenging to figure out the best way to use them.

• In economics, scarcity refers to the idea that the wants and resources of society are limitless.

Which of the following is an example of an opportunity cost?

• If the restaurant purchases new tables, it does not have enough money to purchase new cash registers. The new tables are the opportunity cost.

• If the government spends tax money on fixing roads, it does not have enough money to purchase new lights for the library. The newly paved roads are the opportunity cost.

In economics, the term marginal means additional.

• True

• False

If your decision results in more costs than benefits, you are likely making a bad decision.

• True

• False

Suppose you are planning to go on Spring Break with your friends. You have almost saved enough money. Your parents offer for you to come with them on vacation instead. They will pay your way. What should you consider when making your decision?

• The cost of the trip with friends

• The opportunity to spend time with family

• The destination of both trips

• All of the above