Personal Finance Spring Final Review

What does scarcity mean in economics?

• Having more resources than needed

• Not enough resources to meet all wants

• Unlimited money and limited needs

• Getting everything you want

What is opportunity cost?

• The money you save

• The next best option you give up when making a decision

• A special discount on purchases

• A fee paid for using credit

Which point on a production possibilities curve shows efficient use of resources?

• Inside the curve

• On the curve

• Outside the curve

• Below the curve

What does a movement along the PPC represent?

• More income earned

• Opportunity cost of shifting production

• A change in population

• Decrease in spending

What could cause the PPC to shift outward?

• Decreased worker skills

• Higher taxes

• Improved technology

• Less demand for goods

In a command economy, who makes economic decisions?

• Consumers only

• Private companies

• The government

• Global corporations

What is a key feature of a mixed economy?

• Only government control

• Only individual freedom

• Both government and individual involvement

• No regulations at all

In the circular flow model, households provide what to firms?

• Finished products

• Taxes

• Resources like labor

• Regulations

What do firms give households in return?

• Credit cards

• Goods and services and wages

• Insurance and taxes

• Bonds and savings accounts

What role does the government play in the circular flow model?

• It only collects money

• It regulates the flow of goods and services

• It removes competition

• It buys and sells foreign stocks