Economics Course Review

What is the fundamental economic problem that leads to the concept of scarcity?

• Unlimited resources and limited wants

• Limited resources and unlimited wants

• Equal resources and wants

• Abundance of resources and wants

In a market economy, who makes the majority of economic decisions?

• Government officials

• Central planners

• Consumers and producers

• International organizations

If you choose to spend $50 on a textbook instead of concert tickets, what is your opportunity cost?

• The $50 spent

• The textbook

• The concert tickets

• Future earning potential

Which economic system features heavy government control over resource allocation?

• Free market economy

• Command economy

• Traditional economy

• Laissez-faire economy

According to the Law of Demand, what happens when the price of a good increases?

• Quantity demanded increases

• Supply increases

• Quantity demanded decreases

• Supply and demand remain constant

What is the primary tool of monetary policy?

• Government spending

• Interest rates

• Tax rates

• Trade policies

What type of unemployment occurs when workers are between jobs?

• Structural unemployment

• Cyclical unemployment

• Seasonal unemployment

• Frictional unemployment

What economic indicator measures the total value of all final goods and services produced within a country's borders?

• Consumer Price Index

• Gross Domestic Product

• Trade Balance

• National Income

In a mixed economy, which of the following is typically true?

• Only private businesses operate

• Only government controls resources

• Elements of both market and command systems exist

• Traditional methods dominate

What causes cost-push inflation?

• Increased consumer spending

• Rising production costs

• Government surplus

• Decreased demand