Economics Final

Scarcity exists because:

• Resources are unlimited

• People have limited wants and needs

• Resources are limited but wants are unlimited

• Governments control all resources

What is an opportunity cost?

• The money you earn from working

• The next best alternative given up when making a decision

• The cost of producing a product

• The total expenses of a business

An entrepreneur is someone who:

• Works for a corporation

• Takes risks to create and run a business

• Always succeeds in business

• Avoids innovation and competition

The law of supply states that as price increases:

• Quantity supplied decreases

• Quantity supplied increases

• Supply remains the same

• Demand decreases

Which of the following is an example of a monopoly?

• Many different phone companies competing

• A single company controlling the entire electricity supply

• A grocery store offering multiple brands

• A farmers' market with various vendors

A major purpose of labor unions is to:

• Increase corporate profits

• Negotiate better wages and working conditions for workers

• Reduce competition among businesses

• Lower the minimum wage

What role do banks play in the economy?

• Only store money without lending it

• Provide loans and investment opportunities

• Control government spending

• Eliminate competition among businesses

How does an increase in demand affect price?

• Prices remain constant

• Prices increase

• Prices decrease

• Prices become unpredictable

What is the equilibrium price in a market?

• The price set by the government

• The price where quantity supplied equals quantity demanded

• The highest possible price

• The price that maximizes producer profit

A price ceiling is:

• A government-imposed limit on how high a price can be

• The lowest legal price for a good

• The natural balance between supply and demand

• A price set by businesses