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