econ test 1

Who is most often associated with the ideas and phrases in the box below?

Adam Smith

Create a statement that explains why market economies are used extensively throughout the world?

Market economies are used extensively throughout the world because individuals do not like to feel controlled by the government

In economics why can't society provide all people with all the goods and services they desire?

Scarcity, limited resources, people do not and cannot have enough income, time or other resources to satisfy their every desire

Write a statement that is true of a pure market economy?

There is no central planning agency that determines prices.

production possibilities curve

a graph that shows alternative ways to use an economy's productive resources

The market economy model of production and distribution is based on which of following in the box below?

all of the above

government intervenes in the economy to keep order and promote general welfare

both/us

Business A decides to increase production of cars by buying new robots for the assembly line. This would be considered an investment in what type of resource?

capital

Elon Musk, CEO of SpaceX, would be considered which of the factors of production?

capital

The information below most likely describes an economy that operates as which type of economy: Country A, gov owns most of land, production decisions are made according to need, prices are set by regulatory agencies

command

2 kinds of ppc

constant opportunity cost, increasing opportunity cost

what does scarcity affect

everyone, governments, societies, families, businesses, you

When an economic choice is made, an economist would most likely define the OPPORTUNITY COST as the cost of doing what?

forgoing the benefit of the next best alternative

when something is unattainable what 2 things must you do in order to meet that goal

get more resources or improve technology

In economics, the idea of making a "trade-off" is described as

giving up one thing in exchange for something else

In a command economy, decisions about what to produce are made by who?

government

The concept of economic scarcity refers mainly to decisions about

how resources are allocated

Managers, technical trainers, and accountants are examples of a company's resources.

human resources

If a company uses all its resources to produce only pet food and pet toys, write a true statement about this company?

if more pet toys are produced, less pet food can be produced

point inside graph

inefficient

Based on the information above, if Vanessa decided to work at the convenience store, the opportunity cost of her decision is:

job at the music store

Iron ore, trees, and water are examples of

land

A priest in Tokyo was arrested for giving homeless people rice imported from the United States. Trade restrictions make rice in Japan and South Korea very expensive to consumers.

market

Chrysler Corporation developed the Jeep Grand Cherokee to compete with Ford Motor Company's Explorer.

market

Officials at PepsiCo, knowing that cola is not inherently dark, think that some consumers would like to purchase a clear cola drink

market

point on line

maximum possibility

How is the United States economy is best described?

mixed economy with market and government elements

An Asian dictator, in return for political support, gave the nation's rubber plantations to his friends

nonmarket

Government leaders in Moscow invested public money heavily in large steel mills in the 1930s because they thought that this would help the nation to industrialize

nonmarket

almost all imports are banned; no production of foreign companies allowed

north korea

economy almost totally dominated by government

north korea

government owns all property and all economic output

north korea

government provides social services for all

north korea

What is a CAPITAL GOOD used in the production of bakery products?

oven

What is an event MOST LIKELY to occur in a command economy?

public ownership, government experts set prices for agricultural goods sold to the public

A city decides to build a hospital in one of its vacant lots instead of a sports center or a shopping mall. The opportunity cost of building the hospital is

the sports center or the shopping mall

What is an event MOST LIKELY to occur in a market economy?

the store keeper and the customer will determine the price of goods- stores will offer a wide range of products for sale

The term OPPORTUNITY COST is best described as something that

the value of the next best alternative that was given up to do the action that was chosen

TNSTAAFL a pillar of free enterprise. What does this mean?

there is no such thing as free lunch. Everything has a cost - nothing is free

The ideas below most likely describe aspects of which type of economy? all community members are fishers or farmers, all children grow up to do the same work as their parents, all family members work for the benefit of the community

traditional

point outside

unattainable

founded on free enterprise

united states

free trade encouraged

united states

private property protected by law

united states

An economist would probably agree that to make effective financial decisions, consumers should do what before making purchases?

weigh the costs and benefits of individual choices

What are the three basic concepts all economic systems must address?

who will receive goods/services, what will be produced, how it will be produced