unit 1.
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Questions and Answers

What are goods?

  • Methods used to encourage people to take certain actions
  • Work that one person performs for another for payment
  • The alternative you give up when you make an economic choice
  • Physical objects that can be purchased (correct)

    • What is cost-benefit analysis?

  • Methods used to encourage people to take certain actions
  • The value of something that is given up to get something else that is wanted
  • The alternative you give up when you make an economic choice
  • An approach that weighs the benefits of an action against its costs (correct)

    • What is opportunity cost?

  • The alternative you give up when you make an economic choice
  • Methods used to encourage people to take certain actions
  • An approach that weighs the benefits of an action against its costs
  • The value of something that is given up to get something else that is wanted (correct)

    • What is trade off?

    <p>The alternative you give up when you make an economic choice</p> Signup and view all the answers

    Which economic system involves the government owning some of the factors of production?

    <p>Command</p> Signup and view all the answers

    Which economic system involves individuals owning the factors of production?

    <p>Market</p> Signup and view all the answers

    Which economic system answers the basic economic questions according to tradition?

    <p>Pure traditional</p> Signup and view all the answers

    What do economic goals provide?

    <p>The operational framework for managing and distributing scarce resources</p> Signup and view all the answers

    True or false: Scarcity refers to a situation where there are more resources than human wants.

    <p>False</p> Signup and view all the answers

    True or false: In a pure command economic system, the individual has significant influence over how the economic questions are answered.

    <p>False</p> Signup and view all the answers

    True or false: In a mixed economic system, elements of both the market and command systems are present.

    <p>True</p> Signup and view all the answers

    What are goods?

    <p>Physical objects that can be purchased</p> Signup and view all the answers

    What is trade off?

    <p>The alternative you give up when you make an economic choice</p> Signup and view all the answers

    Which economic system involves the government owning some of the factors of production?

    <p>Command</p> Signup and view all the answers

    Which economic system answers the basic economic questions according to tradition?

    <p>Pure traditional</p> Signup and view all the answers

    Which economic system involves individuals owning the factors of production?

    <p>Market</p> Signup and view all the answers

    What do economic goals provide?

    <p>The operational framework for managing and distributing scarce resources</p> Signup and view all the answers

    Which economist is known as the father of economics?

    <p>Adam Smith</p> Signup and view all the answers

    Which of the following is NOT one of the three types of economic systems mentioned in the text?

    <p>Mixed economies</p> Signup and view all the answers

    In a traditional economy, how are goods and services produced and distributed?

    <p>According to customs handed down from generation to generation</p> Signup and view all the answers

    Which economic system is characterized by individual choice and voluntary exchange directing economic decisions?

    <p>Market economy</p> Signup and view all the answers

    Which of the following is an advantage of a market economy?

    <p>It allows individuals to make their own economic choices</p> Signup and view all the answers

    What is a disadvantage of a pure market economy?

    <p>It cannot provide public goods and services</p> Signup and view all the answers

    What type of economic system does the United States have?

    <p>Mixed economy</p> Signup and view all the answers

    What does the term 'global economy' refer to?

    <p>The economic interactions that cross international boundaries</p> Signup and view all the answers

    What is a centrally planned economy?

    <p>An economic system in which central government officials make all economic decisions.</p> Signup and view all the answers

    What role does the government play in a command economy?

    <p>The government makes all economic decisions.</p> Signup and view all the answers

    What are the disadvantages of a command economy?

    <p>All of the above.</p> Signup and view all the answers

    Which of the following best defines economics?

    <p>The study of how people choose to use scarce resources to satisfy their unlimited wants</p> Signup and view all the answers

    What is the definition of scarcity?

    <p>The situation that exists when there are not enough resources to meet human wants</p> Signup and view all the answers

    What are wants?

    <p>Desires that can be satisfied by consuming a good or service</p> Signup and view all the answers

    According to the text, what are the three basic economic questions that every society must address?

    <p>What will be produced, How will it be produced, From whom will it be produced</p> Signup and view all the answers

    According to the text, how do countries and individuals determine 'what will be produced'?

    <p>By relying on natural resources</p> Signup and view all the answers

    According to the text, what are the four factors of production and their definitions?

    <p>Land, Labor, Capital, Entrepreneurship</p> Signup and view all the answers

    Which of the following best defines marginal cost?

    <p>The additional cost of using one or more units of a product</p> Signup and view all the answers

    Which of the following best defines marginal benefit?

    <p>The additional satisfaction from using one more unit of a product</p> Signup and view all the answers

    What does the production possibilities curve (PPC) illustrate?

    <p>The maximum number of goods and services that can be produced using limited resources</p> Signup and view all the answers

    What does the law of increasing opportunity costs state?

    <p>As production switches from one product to another, increasing amounts of resources are needed to increase the production of the second product</p> Signup and view all the answers

    Study Notes

    Basic Economic Concepts

    • Goods are products or services that satisfy human wants
    • Cost-benefit analysis is a method of comparing the advantages (benefits) and disadvantages (costs) of a decision
    • Opportunity cost is the value of the next best alternative given up when choosing one option over another
    • Trade-off is the sacrifice of one thing in order to obtain another

    Economic Systems

    • Command economy: the government owns some of the factors of production
    • Market economy: individuals own the factors of production
    • Traditional economy: answers the basic economic questions according to tradition
    • Mixed economy: combines elements of both market and command systems

    Economic Goals and Scarcity

    • Economic goals provide a framework for making decisions about how to allocate resources
    • Scarcity refers to a situation where there are limited resources and unlimited human wants
    • Wants are unlimited desires for goods and services

    Traditional Economy

    • Goods and services are produced and distributed based on tradition and custom

    Market Economy

    • Characterized by individual choice and voluntary exchange directing economic decisions
    • Advantage: promotes efficiency and innovation
    • Disadvantage: can lead to income inequality

    Command Economy

    • Government plays a central role in allocating resources and making decisions
    • Disadvantages: lack of incentives, innovation, and individual freedom

    Global Economy and Economics

    • Global economy refers to the economic system that encompasses all countries and their economic activities
    • Economics is the study of how individuals, businesses, governments, and societies allocate resources to meet their unlimited wants and needs
    • The three basic economic questions that every society must address are: what to produce, how to produce, and for whom to produce

    Production Possibilities Curve (PPC)

    • Illustrates the various combinations of two goods that can be produced given the available resources and technology
    • Law of increasing opportunity costs states that as the production of one good increases, the opportunity cost of producing that good also increases

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    Related Documents

    Unit 1 Review PDF
    Chapter 2 Economics Presentation PDF
    Chapter 1 Economics PDF

    Description

    Test your knowledge on scarcity and the factors of production with this exam review quiz. Explore the concept of scarcity and how it relates to the limited availability of resources to fulfill human wants. Learn about the factors of production, including land, labor, capital, and entrepreneurship, and their roles in the production of goods and services. Challenge yourself with this quiz and enhance your understanding of these important economic concepts.

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