Economics Test One

What is the definition of Economics?

• Study of the decisions made in regards to the production, transfer, and consumption of finite resources
• Study of accumulating wealth
• The best way to run a society
• Activities which do not have any monetary motive

A resource is SCARCE if supply exceeds demand without factoring in the price. True or False

• True
• False

The opportunity cost of a good is

• The time lost in finding it
• The quantity of other goods sacrificed to get another unit of that good
• The loss of interest in using savings
• The price you pay for something

Free resources are unlimited amounts of resources for all individuals. True or False

• True
• False

What type of economy exists where the form of payment is usually some form of barter or trade and usually no form of currency is present.

• Market Economy
• Traditional Economy
• Command Economy
• Mixed Economy

Combination of Market and Command economic policies where both government and private investors play significant roles in the economy is what type of economy?

• Market Economy
• Traditional Economy
• Command Economy
• Mixed Economy

All aspects of the economy are controlled by the government and business owned by the Government, prices are set by the government and production is regulated by the government. This is describing which type of economy?

• Market Economy
• Traditional Economy
• Command Economy
• Mixed Economy

This type of economy is described as supply and demand of products determining what, how, and who goods are produced for. This includes privately owned businesses and the market determines the prices.

• Mixed Economy
• Traditional Economy
• Market Economy
• Command Economy

When asked the question: What are you giving up by doing this? Buying that? You are referring to:

• Input Costs
• Supply and Demand
• Invisible Hand
• Opportunity Costs

Oligopoly is defined as

• A state of limited competition in which a market is shared by a small number of producers or sellers.
• A company or group having exclusive control over a good or service
• Supply and demand determine the production of goods and services
• Mrs. Schulte's Classroom