RC 4 Economic Principles and Decisions Review Questions

What leads to the production of higher quality goods at a lower price?

• Scarcity

• Incentives

• Competition

• Production

Consumers determine, through their purchases, the goods and services that are produced. This idea is known as—

• consumer sovereignty

• entrepreneurship

• profit motive

• production

Who are the decision makers for the private sector in the United States economy?

• The government

• Businesses and the government

• Individuals and the government

• Individuals and businesses

What is the inability to satisfy all wants at the same time?

• Choice

• Scarcity

• Opportunity cost

• Incentives

Combining human, natural, capital, and entrepreneurial resources to make goods and services is called—

• consumption

• resources

• production

• distribution

All of the following are true about entrepreneurs EXCEPT—

• They take a risk to produce and sell goods and services in search of a profit.

• They can only set up a proprietorship or corporation.

• They often foster technological progress and economic growth.

Technological innovations impact the global economy by—

• raising the cost of production

• producing goods and services at a higher opportunity cost

• decreasing the flow of capital

• contributing to the flow of goods and services

Which of the following uses tax revenue from individuals and businesses to provide public goods and services?

• Individuals

• Businesses

• Governments

• Households

Which of the following lists correctly names and describes the four types of resources?

• Human, Capital, Entrepreneurial, and Natural

• Land, Water, Air, Fire

• Money, Stocks, Bonds, Real Estate

The factors of production used to build the house are lumber, carpenter, and machinery are known as--

• prices

• resources

• competition