Economics Final

The basic economic problem is essentially one of deciding how to make the best use of what?

• limited resources to satisfy limited economic wants.

• limited resources to satisfy unlimited economic wants.

• unlimited resources to satisfy unlimited economic wants.

• unlimited resources to satisfy limited economic wants.

Opportunity cost is best described as

• sum of all production costs

• most expensive resources used in production

• value of the best alternative forgone when a choice is made

• monetary value of all alternatives forgone when a choice is made

The role of government in a command economy is to:

• promote economic freedom.

• encourage competitive practices.

• make all major economic decisions.

• encourage the formation of corporations.

The idea that producers make goods that consumers like and are willing to pay for is a principle of which of the following economic system?

• market

• command

• traditional

• socialism

Which of the following is NOT a role of the government in a market economy?

• Determine prices for all products

• Correct market failures

• Provide public goods

• Maintaining competition

What is a factory building an example of?

• human capital

• an economic trade-off

• physical capital

• technology

What basic economic problem do both higher-income nations and lower-income nations have in common?

• too many unskilled laborers

• lack of capital goods

• too much government

• scarcity of resources

According to Figure 4.4, how many slices of pizza will Ashley buy if the price is $1.00 per slice?

• one

• two

• three

• four

Rent control is a type of

• price ceiling.

• rationing.

• price floor.

• surplus.

When a consumer is able and willing to buy a good or service, he or she creates which of the following?

• consumption

• elasticity

• demand

• allocation