BMS Economics and Trade Flashcard 2

Front

Which statement best explains why scarcity is a problem for all societies?

Back

People have unlimited wants, but resources are limited.

Front

If a student chooses to spend an hour playing video games instead of studying for a test, what is the opportunity cost?

Back

The grade they could have improved by studying

Front

Which of the following choices is an example of scarcity affecting a government decision? A family decides to buy a used car instead of a new one. A student chooses between playing soccer and basketball. A city must choose between building a new school or improving roads. A company hires more workers to increase production.

Back

A city must choose between building a new school or improving roads.

Front

In which type of economy do businesses and individuals decide what to produce and sell?

Back

Free market economy

Front

How does a mixed economy differ from a command economy?

Back

A mixed economy blends private business with government control.

Front

Which type of economy relies most on tradition and customs?

Back

Traditional economy

Front

What role does the government play in a free market economy?

Back

The government has limited involvement in the economy.

Front

What is most likely to happen if the price of a popular product suddenly rises?

Back

Demand for the product will decrease.

Front

A drought reduces the amount of wheat that farmers can grow. What is the most likely economic effect?

Back

The supply of wheat will decrease, leading to higher prices.

Front

Which statement best describes the law of demand? Options: As prices decrease, people will buy more. As prices increase, businesses will produce less. As wages increase, people work less. As supply increases, demand decreases.

Back

As prices decrease, people will buy more.