Economics Ch. 1-3 C Question Preview (ID: 35241)
Economics Ch. 1-3.
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At many different levels, the existence of _____ forces people to make choices.
a) scarcity
b) natural resources
c) money
d) skills
To improve its standard of living, a nation’s economy must
a) remain stable.
b) grow through innovation.
c) reach economic equity.
d) allow the central government to make economic decisions.
Why do public goods demonstrate the limitations of a free market economy?
a) They allow consumers to make all of the economic decisions.
b) They allow government to make some economic decisions.
c) They allow governments to control most economic decisions.
d) They prevent consumers from making economic decisions.
A news magazine carries an article about the U.S. economy. It describes how the economy grew for several years. Then it describes a long period of contraction. What is the main subject of this article?
a) poverty
b) microeconomics
c) the business cycle
d) voluntary exchange
What was the trade-off of the Soviet Union’s focus on heavy industry?
a) Everyone became poor.
b) It was a better investment.
c) It created fewer jobs.
d) Fewer consumer goods were produced.
You bought two new CDs with the last $30 in your checking account, and your next payday is on Monday. What is the opportunity cost of these CDs?
a) the difference between the cost to produce the CDs and the price you paid for them
b) the $30 check that you wrote for the CDs
c) the night out with your friends that you miss because you can’t afford it now
d) the satisfaction of knowing you are the first of your friends to have these CDs
What does the expression “the customer is king” mean in a free market economy?
a) In a service economy, the customer is always right.
b) Customers have the power to decide what gets produced.
c) People with the most money are treated like royalty.
d) Producers of goods are also customers.
A town wants to repair a school in one of its poorest neighborhoods. To pay for it, citizens vote to raise taxes on households and businesses. What social goal best explains this economic decision?
a) freedom
b) security
c) growth
d) equity
Why does the government protect inventors and authors by offering them patents and copyrights?
a) to encourage free trade
b) to promote innovation
c) to regulate the business cycle
d) to strengthen American culture
Why does every decision involve trade-offs?
a) Everyone has to make decisions.
b) Incomes are not equal.
c) Resources are limited.
d) Decisions are all different.
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