Understanding Basic Economic Concepts

How do producers decide what they are going to make?

• By guessing what people might like

• By looking at what consumers want and need

• By making whatever costs the most money

• By choosing items they prefer

What is inflation?

• A general increase in prices over time

• A decrease in the cost of goods

• A savings account fee

• The process of taking out a loan

Which type of economy depends on farming and hunting to supply needs?

• Traditional economy

• Command economy

• Market economy

• Mixed economy

What type of economy does the government have little control over?

• Command economy

• Market economy

• Traditional economy

• Mixed economy

Which type of economy does not have competition between businesses?

• Market economy

• Command economy

• Traditional economy

• Mixed economy

Which type of economy allows past customs and family tradition to determine what to produce, how to produce it, and who gets it?

• Command Economy

• Market Economy

• Traditional Economy

• Mixed Market Economy

What is interest?

• A fee paid for borrowing money or earned for saving money

• The cost of buying a product

• A type of savings account

• The price of a good or service

What is the economy?

• A system of producing, selling, and buying goods and services

• The money saved in a country’s bank

• The way people use credit cards

• A type of government

What is competition in economics?

• Rivalry among businesses to sell goods or services

• The way businesses collaborate

• The cost of goods and services

• A fight between companies

If the class lowers the supply of doughnuts to 10 doughnuts a day, what do you think they could do with the price?

• Raise it

• Leave it the same

• Lower it