Econ unit 1

A consumer's opportunity cost differs from a business's opportunity cost in that it is associatedwith _________________________. A)an item not purchased B)an output not produced C)one factor of production only D)the use of a decision-making grid

A) an item not purchased

When a business owner hires someone to run the cash register, that person and the businessowner are participating in the _________________________. A)factor market B)capital market C)product market D)financial market

A) factor market

An economy in which sellers and buyers decide WHAT to produce, HOW to produce, andFOR WHOM to produce is called a _____. A)market economy B)socialist economy C)collective economy D)decentralized economy

A) market economy

In the U.S. form of free enterprise capitalism, the federal government places some regulations on businesses to ______. A)protect consumers against harm B)set prices for products C)determine the goods to produce D)decrease the gap between the rich and poor

A) protect consumers against harm

As a mixed socialism nation, China has features of several systems, including a traditionaleconomy, which is found in ______. A)rural areas B)urban areas C)suburban areas D)industrial areas

A) rural areas

What does the gross domestic product measure? A)durable goods B)intangible wealth C)value D)a country's total output

a country's total output

What term describes an economic system in which private citizens own and use the factors ofproduction for economic gain? A)socialism B)capitalism C)collectivism D)mercantilism

capitalism

Why did China switch to a mixed economy from a command economy after Mao Zedong'sdeath in 1976? A)China's economic growth was poor. B)The Communist Party was failing. C)China wanted to adopt a system like Japan's. D)Its leaders wanted to sell the factors of production.

A)China's economic growth was poor.

Who was Karl Marx? A)president of Venezuela B)co-founder of communism C)father of modern capitalism D)early leader of the Soviet Union

co-founder of communism

The two broad groups of people whose choices drive the economy are_________________________. A)consumers and laborers B)producers and consumers C)laborers and entrepreneurs D)entrepreneurs and producers

producers and consumers

A production possibilities curve diagrams all possible combinations of goods and services aneconomy can produce when _________________________. A)consumer rights are protected B)consumers have money to spend C)productive resources are fully employed D)government allows its people to make choices

productive resources are fully employed

Economics is the study of how people try to satisfy their wants and needs through the careful use of _________________________. A)financial budgets B)scarce resources C)nondurable goods D)division of labor practices

scarce resources

In free enterprise capitalism, what happens when similar businesses combine? Select ALL that apply. A)Competition decreases. B)Economic growth becomes uneven. C)The gap between the rich and poor widens. D)Consumers have fewer suppliers from which to choose.

A)Competition decreases. D)Consumers have fewer suppliers from which to choose.

Why is economics considered a dynamic science? Select ALL that apply. A)The economy is always changing. B)Its methods are always changing. C)Human behavior is always changing. D)Its basic principles are always changing

A)The economy is always changing. C)Human behavior is always changing

What three basic economic questions must all societies answer? Select ALL that apply. A)What to produce? B)How to produce? C)When to produce? D)For whom to produce?

A)What to produce? B)How to produce? D)For whom to produce?

Examples of idle resources include _________________________. Select ALL that apply. A)a labor strike B)an empty factory C)a farmer selecting seeds D)an engineer reviewing plans

A)a labor strike B)an empty factory

The term consumer sovereignty suggests that the people who rule the marketplace are the _____________. A)buyers B)sellers C)marketers D)producers

A)buyers

How does a mixed economy cover the costs of social benefits such as free education andmedical care? Select ALL that apply. A)by increasing taxes B)by increasing international trade C)by reducing benefits to authorities D)by shifting resources from other projects

A)by increasing taxes D)by shifting resources from other projects

Government intervention is typically needed to meet the shared goal(s) of ______. Select ALL that apply. A)economic equity B)economic security C)economic freedom D)economic efficiency

A)economic equity B)economic security

Nations with communist and socialist economic systems transition to capitalism to_____. Select ALL that apply. A)generate wealth B)relinquish power C)control scarce resources D)improve the standard of living

A)generate wealth D)improve the standard of living

What might be an opportunity cost of raising the minimum wage? Select ALL that apply. A)higher unemployment B)higher consumer costs C)improved price stability D)greater economic growth

A)higher unemployment B)higher consumer costs

Economists measure economic growth by examining _________________________. A)total output of goods and services over time B)the needs and wants of the population over time C)the risks and sacrifices assumed by businesses over time D)population growth compared with available resources over time

total output of goods and services over time

What two characteristics must an item possess to have monetary value? A)scarcity and capital B)capital and transferability C)transferability and utility D)utility and scarcity

utility and scarcity

Who was Adam Smith?

wrote the wealth of nations

What was the purpose of the consumerism movement that started in the 1960s? Select ALLthat apply. A)to expect higher quality products B)to demand safer products C)to educate buyers about purchases D)to protect businesses from lawsuits

A)to expect higher quality products B)to demand safer products C)to educate buyers about purchases

One of the disadvantages of a command economy is minimal reward for individual initiative asexemplified by _______. A)uniform wages B)state-controlled media C)restrictions on where to live D)production of low-quality goods

A)uniform wages

Changes made to the economic system to resolve conflicting goals tend to reflect the will of American ______. A)voters B)workers C)politicians D)entrepreneurs

A)voters

Which example illustrates the ability of a market economy to adapt to change? A)An increase in the price of oil encourages consumers to purchase the same amount. B)An increase in the price of oil motivates firms to produce alternative energy. C)An increase in the price of oil forces the government to regulate prices. D)An increase in the price of oil allows oil producers to restrict supply.

An increase in the price of oil motivates firms to produce alternative energy.

How is spending money in the marketplace similar to voting for political candidates? A)Purchases are typically made in secret. B)The product receiving the most dollars wins. C)Familiar names are most popular with consumers. D)Purchases are often made without conducting research.

B) The product receiving the most dollars wins.

The world's last leading example of a command economy is ________. A)Cuba B)North Korea C)Venezuela D)Vietnam

B)North Korea

What questions should you answer to determine whether a nation has a mixed economy?Select ALL that apply. A)What is the nation's official name? B)Who owns the factors of production? C)How many political parties operate within the nation? D)Who decides what to produce, how to produce, and for whom to produce?

B)Who owns the factors of production? C)How many political parties operate within the nation? D)Who decides what to produce, how to produce, and for whom to produce?

The purpose of an economic model is to _________________________. Select ALLthat apply. A)direct economic activity B)analyze economic activity C)predict economic activity D)describe economic activity

B)analyze economic activity C)predict economic activity D)describe economic activity

What are the primary disadvantages of a traditional economy? Select ALL that apply. A)clarity of expectations B)economic stagnation C)lower standard of living D)minimal uncertainty

B)economic stagnation C)lower standard of living

What are the effects of specialization? Select ALL that apply. A)self-sufficiency B)increased efficiency C)economic interdependence D)weaker international cooperation

B)increased efficiency C)economic interdependence

Private property rights give people the incentive to do what? Select ALL that apply. A)relocate B)save C)work D)invest

B)save C)work D)invest

What is the government's primary purpose in its role as a regulator? A)to protect consumers from harm B)to preserve competition in the marketplace C)to provide goods and services for its citizens D)to protect the private property of citizens

B)to preserve competition in the marketplace

Sweden offers its citizens a mix of high-tech capitalism and ________. A)keiretsu structures B)centralized planning C)liberal welfare benefits D)pharmaceutical research

C) liberal welfare benefits

What adjustment might workers at a government-owned factory have to make as their countrytransitions to capitalism? A)pay back loans B)pay bills on times C)perform quality work D)make purchasing decisions

C) perform quality work

What term describes the difference in value between the best option and the next bestalternative that was not chosen? A)risk B)trade-off C)opportunity cost D)production possibilities frontier

C)opportunity cost

Chile's successful transition to capitalism can be attributed to ______. Select ALL that apply. A)isolationism and socialism B)nationalization and collectivization C)privatization of airlines and utilities D)use of pension funds to support entrepreneurs

C)privatization of airlines and utilities D)use of pension funds to support entrepreneurs

In free enterprise capitalism, competition ensures that producers work to provide ______. A)a functional product at the lowest price B)the best product at an average price C)the best product at the lowest price D)a functional product at an average price

C)the best product at the lowest price

What best explains the move of the United States from a predominantly capitalistic marketeconomy to a mixed economy in the 1930s? A)the prevailing one-party political system B)the overall diversity of economic activities C)the economic upheaval of the Great Depression D)contact with other cultures and new technology

C)the economic upheaval of the Great Depression

A decision to block the import of blue jeans might meet the goal of full employment for domestic garment workers but limit consumers' ______. A)economic equity B)economic growth C)economic security D)economic freedom

D) economic freedom

What distinguishes capitalism in Japan from capitalism in the United States? A)Solidarity B)perestroika C)membership in the European Union D)government involvement in private sector

D) government involvement in private sector

People living in a traditional economy make decisions about the use of scarce resourcesby _______. A)trading B)bartering C)drawing lots D)relying on custom, ritual, and habit

D) relying on custom, ritual, and habit

In a command economy, who makes decisions about WHAT to produce, HOW to produce,and FOR WHOM to produce? A)socialists B)producers C)consumers D)a central authority

D)a central authority

Given the role that government plays in economic affairs, what term best describes the current U.S. economy? A)free enterprise capitalism B)command market economy C)consumer sovereignty economy D)modified free enterprise economy

D)modified free enterprise economy

In the United States, consumer spending influences what type of economic decision? A)goods to produce B)production methods to follow C)government services to provide D)automation techniques to employ

goods to produce