Introduction to Economics Quiz

The factors of production are land, labor, capital, and entrepreneurship. They are crucial as they are the resources needed to produce goods and services.

The basic economic problem is scarcity, which arises because resources are limited while human wants are unlimited. This necessitates making choices about resource allocation.

Entrepreneurs coordinate the production and sale of goods and services, take risks, and invest time and money in their businesses. They are essential for innovation and economic growth.

<p>Opportunity cost is the value of the next best alternative that must be forgone when making a choice. It highlights the trade-offs involved in resource allocation.</p> Signup and view all the answers

<p>Microeconomics focuses on individual economic agents and markets, while macroeconomics studies the overall economy and aggregate phenomena like inflation and unemployment.</p> Signup and view all the answers

<p>Economic models simplify complex realities to help analyze and predict economic behavior and interactions. They are essential for forming theories and guiding policy.</p> Signup and view all the answers

<p>Markets are platforms where buyers and sellers interact to trade goods and services, determining prices through supply and demand. They facilitate efficient allocation of resources.</p> Signup and view all the answers

<p>Labor encompasses the physical and mental human effort used in the production of goods and services. It is vital as it directly contributes to the creation of products.</p> Signup and view all the answers

<p>A firm may change its production technique to employ more machines and fewer workers.</p> Signup and view all the answers

<p>A mixed economy includes both private enterprise and government intervention, while a free market economy relies solely on private individuals and firms.</p> Signup and view all the answers

<p>A centrally-planned (command) economy is characterized by government ownership of most businesses.</p> Signup and view all the answers

<p>In a free market economy, individuals and firms determine what to produce based on market demand.</p> Signup and view all the answers

<p>The Soviet Union and North Korea are two examples of countries with a centrally-planned economy.</p> Signup and view all the answers

<p>The question 'for whom to produce' addresses the distribution of goods and services among different income groups.</p> Signup and view all the answers

<p>Public goods are services and facilities provided by the government to benefit all citizens.</p> Signup and view all the answers

<p>Market forces of demand and supply coordinate economic activities and determine prices.</p> Signup and view all the answers

<p>A mixed economy combines elements of both market and planned economies, where individual enterprises operate alongside government involvement in decision-making.</p> Signup and view all the answers

<p>Market economies promote productive efficiency through competition, which drives producers to minimize costs while maximizing output.</p> Signup and view all the answers

<p>Allocative efficiency occurs when goods and services are produced according to consumer preferences, leading to a situation where marginal benefit equals marginal cost.</p> Signup and view all the answers

<p>Market economies may not achieve fully efficient outcomes due to factors like immediate inefficiencies in actions, government intervention, and externalities like pollution.</p> Signup and view all the answers

<p>The trade-off involves balancing the pursuit of efficient economic outcomes with the aim of achieving fair distribution of wealth and resources.</p> Signup and view all the answers

<p>Voluntary exchange leads to mutually beneficial transactions, where both buyers and sellers gain from the trade until no further improvements are possible.</p> Signup and view all the answers

<p>Market economies can lead to significant inequality as resource allocation often favors those already in advantageous positions, disregarding the needs of marginalized individuals.</p> Signup and view all the answers

<p>Government intervention is significant in addressing issues like inequality, consumer protection, and labor rights, which markets alone may fail to adequately resolve.</p> Signup and view all the answers

<p>Microeconomics focuses on how households and firms make choices and interact in markets, along with the government's role in influencing these choices.</p> Signup and view all the answers

<p>Key topics in macroeconomics include inflation, unemployment, and economic growth.</p> Signup and view all the answers

<p>An example of a microeconomic issue is how consumers react to changes in product prices.</p> Signup and view all the answers

<p>A macroeconomic issue might investigate why economies experience periods of recession and increasing unemployment.</p> Signup and view all the answers

<p>Government policies can influence microeconomic outcomes by affecting consumer choices and firm pricing strategies.</p> Signup and view all the answers

<p>In economics, 'capital' refers to manufactured goods used to produce other goods and services.</p> Signup and view all the answers

<p>Being rational means that people use all available information to weigh the benefits and costs of actions to make the best possible decision.</p> Signup and view all the answers

<p>In economics, 'technology' refers to the processes used by a firm to produce goods and services.</p> Signup and view all the answers

<p>Economic incentives influence people's actions, leading them to change their decisions when incentives are altered.</p> Signup and view all the answers

<p>Macroeconomics might explore what determines the long-term growth rates of different economies.</p> Signup and view all the answers

<p>Making decisions at the margin involves comparing the marginal costs and marginal benefits of a little more or a little less of an action.</p> Signup and view all the answers

<p>Opportunity cost is the highest-valued alternative that is forgone when a choice is made due to scarce resources.</p> Signup and view all the answers

<p>Societies must decide what goods and services will be produced, considering the trade-offs involved.</p> Signup and view all the answers

<p>A firm can choose between various production methods, such as hiring skilled labor or using technology to achieve acceptable quality.</p> Signup and view all the answers

<p>The submission of DNA samples reduced repeat convictions among serious violent offenders by 17%.</p> Signup and view all the answers

<p>Weighing benefits and costs indicates a systematic approach to decision-making that aims for the most profitable or beneficial outcome.</p> Signup and view all the answers