2025 EPF Exam Review

Adam Smiths concept of the Invisible Hand regulates a free market economy

• incentives and efficiency

• competition and self-interest

• specialization

• trade and wealth

Limited resources for unlimited wants/needs creates what?

• scarcity

• opportunity cost

• consequences

• surplus

Adam Smith is often called the "Father of Capitalism". What is another term to describe this type of economic system?

• mercantilism

• colonization

• laissez-faire

• socialism

Which of the following is NOT a factor of production?

• capital

• labor

• land

• time

Any good or service that has a price, and is thus being rationed, is known as what?

• feels good

• unlimited good

• economic good

• factor good

Which of the following is a scarce resource?

• Labor used to produce television sets

• TVs

• TV transmitted into the atmosphere

• enjoyment from TV

The basic reason people operate businesses in the United States is their desire to…

• pay taxes

• serve their customers

• earn a profit

• sell their products

Making choices in a world of scarcity means that you must…

• spend your money carefully to get what you want

• work hard

• pass up alternatives

• save your income

How did the Soviet Union become an economic power?

• foreign investment

• economic transition to free market

• implementing laissez faire policies

• focusing on heavy industry

How did the Soviet Union become an economic power?

• foreign investment

• free market

• laissez faire polices

• heavy industry