Final Review: Economics

Which of the following best describes scarcity?

• Limited resources and unlimited wants

• Unlimited resources and limited wants

• Limited wants and limited resources

• Unlimited resources and unlimited wants

What is Opportunity Cost?

• The most desirable alternative given up as a result of a decision

• The total amount of money spent on a project

• The profit earned from an investment

• The resources used to produce goods

Which of the following is NOT a factor of production?

• Labor

• Land

• Capital

• Money

Which of the following is a capital good?

• A pizza

• A delivery truck

• A worker

• A farm

A production possibilities curve shows:

• The maximum output of two goods using available resources

• The minimum cost of producing goods

• The actual production of goods in an economy

• The distribution of income among individuals

In a traditional economy, economic roles are determined by:

• Customs and beliefs

• Government regulations

• Market competition

• Technological innovation

In a command economy, who makes the basic economic decisions?

• The government

• Private individuals

• Corporations

• Market forces

What best describes a mixed economy?

• A combination of free market and some government involvement

• An economy with no government intervention at all

• A system where only the government controls resources

• A market where only private businesses operate

Which country is closest to a market economy?

• North Korea

• Cuba

• United States

• Soviet Union

Why do markets exist?

• To allow people to exchange goods and services

• To prevent people from trading

• To increase the price of all goods

• To eliminate competition