Economics Final Exam Review

Societies are faced with three basic questions about the production of goods?

• what, how, and why

• what, where, and when

• what, how, and for whom

• when, where, and for whom

Which of the following descriptions best explains the meaning of opportunity cost?

• The initial cost of starting a new business.

• The cost of business failure.

• The cost of choosing one alternative over another.

• The risk associated with producing a new item.

Which of the factors of production involves taking risks and combining resources to produce a good or service?

• Land

• Labor

• Capital

• Entrepreneurs

Which of the following statements best describes the purpose of a production possibilities frontier?

• It predicts the future production of a nation.

• It identifies trends in production.

• It shows which products are most profitable.

• It identifies all possible combinations of goods and services an economy can produce.

Which of these economic systems have the least in common?

• Market economy and capitalism

• Command economy and socialism

• Command economy and capitalism

• Free-enterprise economy and market economy.

Which type of economy is the most prevalent in the world today?

• Mixed

• Market

• Command

• Traditional

The dollar value of all final goods, services, and structures produced in a country in a year is known as ?

• Gross Domestic Product
• Gross National Product

• Franchise

• Profit motive

The struggle among sellers to attract customers by offering the best products at the lowest prices is known as ?

• Voluntary exchange

• Profit motive

• Property rights

• Competition

Private property rights give people the incentive to work, save, and .

• Purchase

• Invest

• Compete

• Produce

A general rise in the level of prices over time is known as .

• Inflation
• Deflation

• Stagflation

• Hyperinflation