Econ- Chapter 1 And 2 Question Preview (ID: 59872)


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The value of the next best alternative that has to be given up for the action that is chosen is the:
a) Factors of production
b) Trade-off
c) Opportunity Cost
d) Productivity

A production possibilities curve helps determine:
a) Factors of production
b) Cost of production
c) All the opportunity costs and trade-offs that a business will face during a year
d) The maximum combinations of goods and services that can be produced in a given time

It is easier to start your own business in a:
a) Command Economy
b) Traditional Economy
c) Controlled Economy
d) Free enterprise system

A major characteristic of a pure market economy is:
a) Unrestricted competition
b) Oversupply of labor
c) strong government planning
d) Regulated Prices

Pure socialism is characterized by:
a) A complete absence of government
b) Decision making based on traditions and customs
c) Centralized economic planning and state ownership of the factors of production
d) Individual ownership of the factors of production and economic freedom

Another term for a market economy is a:
a) Command Economy
b) Free enterprise system
c) Mixed Economy
d) Democratic system

A free-enterprise system is one in which:
a) Government controls the factors of production
b) There are no government restrictions
c) Government interference in the economy is minimal
d) Government purchases goods and services from consumers

A disadvantage of a pure market economy is:
a) The amount of government control
b) Concern for those unable to work and pay for goods and services
c) The lack of choices among consumer goods
d) The lack of incentive to work hard

Using resources wisely so that people are better off economically is referred to as:
a) Economic growth
b) Opportunity cost
c) Economic efficiency
d) Standard of Living

As an economic term, land refers to:
a) Work people do
b) Machinery
c) Natural Resources
d) Knowledge

The amount of military goods given up in a year is the opportunity cost for producing:
a) More weapons
b) A balanced budget
c) More civilian goods
d) A production possibilities curve

All economic systems:
a) Produce the same goods
b) Must answer the same three basic questions
c) Have the same resources
d) Distribute products through majority rule

Almost all economic systems today are:
a) Traditional Economies
b) Command Economies
c) Market Economies
d) Mixed Economies

In a command economy, the factors of production are decided by:
a) Government Leaders
b) Individuals
c) Economists
d) Communities

One advantage of a traditional economy is:
a) The incentive to work hard
b) Consumer choices
c) You know what is expected of you
d) The opportunities for wealth

Which of the following describes a free-enterprise system?
a) Individuals are free to own and control the factors of production
b) Government owns and controls the factors of production
c) Businesses cannot make a profit
d) There are no legal restrictions on freedom of enterprise

Who owns the factors of production and makes economic decisions in a market economy?
a) Individuals
b) Mixed economies
c) Command economies
d) Traditional economies

The goal of economic stability is to reduce extreme ups and down in the:
a) Minimum wage
b) Standard of Living
c) Factors of Production
d) Nation's economy

Which of the following is a characteristic of capitalism?
a) Centralized planning
b) Little incentive for business risk
c) Marketplace efficiency
d) State owns the major factors of production

Which of the following is a characteristic of pure socialism?
a) Most prices are set by the state
b) Most prices are determined by supply and demand
c) Those who take business risks may make high profits
d) Private property rights are enforced by the government

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