Economics Final Exam Study Guide

What does scarcity refer to in economics?

• Unlimited resources

• Limited resources

• Equal distribution of wealth

• Government control of resources

Which of the following best defines production?

• The consumption of goods

• The creation of goods and services

• The distribution of wealth

• The sale of goods

Marginal productivity refers to:

• The increase in output from one additional unit of input

• The total output over time

• The cost of production

• The market demand for goods

A choice in economics is best defined as:

• A decision between two or more alternatives

• An unavoidable outcome

• A government mandate

• A fixed outcome

A trade-off occurs when:

• One choice is made over another

• The economy grows

• Resources are abundant

• There is no opportunity cost

The production possibilities frontier (PPF) illustrates:

• The maximum efficient output combinations of two goods

• The total demand for goods

• The rate of inflation

• The equilibrium price

Absolute advantage refers to:

• The ability to produce more of a good than another producer

• The ability to produce a good at a lower opportunity cost

• The balance of trade

• The demand for a good

Comparative advantage is defined as:

• The ability to produce goods with fewer resources

• The ability to produce a good at a lower opportunity cost

• The total output of a country

• The trade deficit

Which of the following is NOT an economic system?

• Traditional

• Command

• Market

• Circular

Positive economics deals with:

• What ought to be

• What is

• Future predictions

• Government policies