Introduction to Economics

What is Scarcity? Why do we have scarcity?

• Unlimited resources and limited wants

• Limited resources and unlimited wants

• Unlimited resources and unlimited wants

• Limited resources and limited wants

What is a traditional economy?

• An economy where decisions are based on customs and historical precedent.

• An economy where the government makes all economic decisions.

• An economy based on supply and demand with little government control.

• An economy that combines elements of traditional, command, and market systems.

What is a command economy?

• An economy where decisions are based on customs and historical precedent.

• An economy where the government makes all economic decisions.

• An economy based on supply and demand with little government control.

• An economy that combines elements of traditional, command, and market systems.

What is a market economy?

• An economy where decisions are based on customs and historical precedent.

• An economy where the government makes all economic decisions.

• An economy based on supply and demand with little government control.

• An economy that combines elements of traditional, command, and market systems.

Give an example of the U.S. as a market economy.

• Government subsidies for agriculture

• Private businesses setting prices based on supply and demand

• Public education system

• Social security benefits

How is competition beneficial to consumers?

• It leads to higher prices.

• It reduces the quality of products.

• It encourages innovation and better prices.

• It limits consumer choices.

What are opportunity costs?

• The benefits of a decision

• The costs associated with a decision

• The value of the next best alternative given up

• The resources used in production

What is the difference between goods and services? Which of the following is a service?

• A smartphone

• A haircut

• A book

• A car

What is a mixed economy?

• An economy where decisions are based on customs and historical precedent.

• An economy where the government makes all economic decisions.

• An economy based on supply and demand with little government control.

• An economy that combines elements of traditional, command, and market systems.

What kind of economy is the United States?

• Traditional economy

• Command economy

• Market economy

• Mixed economy