unit 1 test

Question 1

Any resources that are made by humans to create other goods and services are called?

Answer 1

capital

Question 2

An example of a shortage is limited amounts of

Answer 2

food available because the trucks carrying it are on strike

Question 3

What does a production possibilities frontier show?

Answer 3

the maximum amount

Question 4

A country’s production possibilities increase because the available workers become more skilled at using?

Answer 4

Technology

Question 5

What is the struggle among various producers for the consumers business called?

Answer 5

competition

Question 6

What can cause a production possibilities to move to the right?

Answer 6

A new invention lowers the cost

Question 7

Why does even a free market economy some kind of government intervention?

Answer 7

to provide for things that the marketplace does not address

Question 8

Which of the following is not a key economic question?

Answer 8

How should it be ensured that goods and services are paid for?

Question 9

In what kind economy does the government make all the decisions?

Answer 9

Centrally Planned

Question 10

Suppose there is a family in which all the boys expected to become farmers when they are adults just as their fathers and grandfathers did. In which kind of economy do they participate?

Answer 10

Traditional economy

Question 11

You are an entrepreneur with an innovative idea for a new business. In which kind of economy would you have the most opportunity to try to achieve success?

Answer 11

Market Economy

Question 12

Why do markets exist?

Answer 12

Markets allow people to buy what they need to consume and sell the specialized goods

Question 13

Improved technology helps create a higher standard of living for future generations by

Answer 13

providing additional goods and services

Question 14

By the end of the summer, Jason had saved enough money for college, opportunity cost

Answer 14

digital camera

Question 15

Factory building

Answer 15

physical capital

Question 16

which of the following is the kind of decision that can be made at the margin?

Answer 16

whether or not to hire new workers

Question 17

The government of a country must make a decision between spending money on a hospital or border security

Answer 17

guns or butter

Question 18

How would you describe an economy that uses its resources to make the greatest possible number of goods

Answer 18

efficient

Question 19

what does a production possibilities frontier show

Answer 19

the maximum amount that an economy can provide

Question 20

what does the process of specialization do for an economy

Answer 20

it makes it more efficient

Question 21

What is one of the most important advantages of a free market

Answer 21

it encourages growth

Question 22

What incentive motivates a manufacturer to sell a product

Answer 22

making profits on sales

Question 23

who is a free market philosopher

Answer 23

adam smith

Question 24

Which of the following is characteristic of a traditional?

Answer 24

children tend to have the same jobs as parents

Question 25

What is the product market?

Answer 25

The market in which households purchase the goods and services that firms produce

Question 26

The purpose of a production possibilities graph is to?

Answer 26

show alternative ways to use an economies resources

Question 27

The government of a country must make a decision between increasing military spending and subsidizing wheat farms

Answer 27

guns or butter

Question 28

Production possibilities frontiers curve when they are charged on a graph because they show

Answer 28

the increasing costs resulting in increasingly less output

Question 29

Why are all goods and services scarce

Answer 29

all resources are scarce

Question 30

Opportunity cost of a decision

Answer 30

the most desirable alternative given up for the decision

Question 31

what is an important advantage of a free market

Answer 31

it offers a wide variety of goods and services

Question 32

Why does the government use its powers to make sure that businesses disclose so much info to the public?

Answer 32

To make buyers more knowledgeable and safer

Question 33

A person who consumes a good or service but does not pay for it

Answer 33

a free rider

Question 34

What is the term for the total value of all goods and services produced in a particular economy

Answer 34

gross domestic product

Question 35

why are all goods and services scarce?

Answer 35

there’s always a limit on resources

Question 36

what are the trade-offs?

Answer 36

all the possible alternatives that are rejected when a choice is made