Understanding Economic Principles Quiz Part 2

Every nation must decide:

• what combination of resources will best suit its circumstances.

• which wants and needs are most critical.

• which goods and services to produce.

• all of the above.

Goods:

• are things you purchase only after your basic needs are met.

• have no physical characteristics.

• must be provided to you at the time you want to consume them.

• are things you can see and touch.

In the United States, you can own anything you want and decide what you want to do with it, as long as it does not violate the law. This describes the principle of:

• scarcity.

• competition.

• the command economy.

• the right of private property.

Which of the following scenarios will probably cause prices to drop?

• A new snack food is very popular, and only one company produces it.

• A big snowstorm is approaching, and the only hardware store in town has just a few snow shovels left in stock.

• Many companies begin producing a product in relatively high demand.

• Half of the world’s diamond mines shut down production.

People producing goods and services are called:

• human resources

• natural resources.

• capital resources.

• limited resources.

What is the final step of the decision-making process?

• act on your choice

• make a decision

• review your decision

• define the problem

The rivalry among businesses to sell their goods and services is known as:

• competition.

• entrepreneurship.

• capitalism.

• cornering the market.

Which type of economy is usually centered mainly on meeting people’s basic needs?

• market economy

• command economy

• mixed economy

• traditional economy

The government of Erewhon owns and controls all economic resources and decides how those resources will be used. The government even assigns people specific jobs and careers. Erewhon uses which type of economic system?

• market economy

• command economy

• traditional economy

• laissez-faire economy

Which of the following is probably a competitor to Mary’s CD Shop?

• Food Clown grocery store

• B Flat Records and Tapes

• Al’s Garage

• Donna’s Donut Hut