Economics Test 1 Review

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20 Questions

What is the study of how people allocate scarce resources for production, distribution, and consumption both individually and collectively?

Which principle of economics states that all resources are limited?

What is the careful management of available resources in terms of the production and consumption of goods and services?

Which term refers to what you spend when you make a choice (time, resources, money)?

Which principle of economics emphasizes that trade makes people better off?

What concept captures the scarcity and opportunity cost of choices when faced with the possibility of producing two goods or services?

In which type of economy does the government have little or no interference?

According to Adam Smith, what motivates people in a free market economy?

What is the main advantage of a free market economy?

How does trade contribute to economic efficiency?

What is the main focus of microeconomics?

Which principle of economics emphasizes the concept that people have to give up something in order to get something else?

What do economists mean when they talk about 'Thinking at the Margin'?

What is the main difference between microeconomics and macroeconomics?

What concept captures the idea that every choice requires tradeoffs?

What is the opportunity cost of switching from making one set of things to making another set of things efficiently?

Which term describes the specialization of the labor force in which large jobs are broken down into many specialized jobs?

What does the PPF model capture?

In terms of economics, what does the term 'allocative efficiency' refer to?

What is the main reason why trade can be helpful according to the text?

Description

Prepare for your economics test with this review, covering key terms and concepts such as the study of resource allocation, microeconomics, and macroeconomics. Understand the principles of how individuals and societies make choices to satisfy unlimited wants with limited resources.

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