Unit 1 Economics Test Questions – Flashcards
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From economics, we learn that people have to make ________ when they are faced with limited _________.
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Choices Resources
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All people have ________, which are things that may improve their lives.
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Needs
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Most people have ________, which are things that may improve their lives.
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Wants
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Physical things that people produce are_________.
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Goods
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Actions performed for a fee _____.
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Services
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Limited resources are the cause of ______.
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Scarcity
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A temporary low supply of an item is called a ______.
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Shortage
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An ____________ brings together the factors of production to make new or improved goods or services.
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Entrepreneur
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The factors of production are ________, ________, and _________.
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Land Capital Labor
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Natural resources such as oil and forests are included in the factor called _____.
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Land
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The work people to do is called _______.
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Labor
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Buildings and tools are _________ capital.
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Physical
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A worker's skills are called _______ capital.
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Human
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Giving up one thing for another is called a _________.
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Trade-Off
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The term "guns or butter" refers to a trade-off between military goods and __________ goods.
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Consumer
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The cost of the next best choice in a trade-off is called the _________.
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Opportunity Cost
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When you decide how much more or less to do, you are thinking at the _____.
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Marginal
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To do a cost/benefit analysis, you must weigh the marginal ______ against the marginal ______.
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Cost Benefit
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A graph that shows alternative ways to use resources is called a ______ ______ curve.
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Production Possibilities
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______ means that an economy is using its resources in a way that produces the most goods and services.
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Efficiency
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When resources are available but are not being used, an economy experiences ______.
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Underutilization
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The law of increasing costs say that opportunity costs increase when ______ switches from one item to another.
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Production
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The answer to the question "What should be _____?" tells where resources will be used.
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Produced
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The question "______ should things pre produced?" shows how people will use capital
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How
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The third question a society must answer is "Who should ______ what is produced?"
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Consume
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When the ______ of living is improving, the country's economy is ______.
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Standard Growing
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Economic ______ means a society does not waste its resources.
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Efficiency
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Americans have economic ______, and so can choose their jobs.
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Freedom
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When a country tries to even out what its workers earn, it creates ______, or fairness.
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Equity
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A ______ economic system is based on what the society has done in the past.
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Traditional
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______ happens very slowly.
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Changes
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Buyers and sellers have the freedom to make a ______ exchange, or willing transfer.
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Voluntary
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______, or the contest between firms, gives consumers ______ to spend because of the lower price.
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Competition Incentive
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Advantages of a free market economy include: changing what is ______ when conditions change, ______ freedom, and ______ leading to economic growth.
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Produced Economic Competition
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The ______ decides the answers to the three basic economic questions.
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Government
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Command economies are found in two political economic systems known as ____ and ______.
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Communism Socialism
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Because there is little ______, there is little economic growth.
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Innovation
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Both ______ and the ______ make economic decisions.
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Market Individual
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People who believe in laissez faire do not want the ______ to make economic decisions.
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Government
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The U.S. has a ______ enterprise system, with most investment decisions made by ______.
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Free Individuals
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Four principles of free enterprise are the ______ motive, ______ equality, private ______, and voluntary ______.
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Profit Legal Property Exchange
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Consumers send ______ to businesses by buying or not buying a good or service.
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Signals
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The Constitution protects the right to ______ ______ and to make ______. It also spells out rules about ______.
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Own Private-Property Contracts Taxation
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The government keeps consumers _____. It also protects the ______ ______ by regulating some ______ activities.
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Informed Public Interest Business
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______ is the study of the overall economy.
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Marcoencomic
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______ is the study of the economy that focuses on small units.
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Microeconomic
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Up and down patterns in the ______ are called the business cycle.
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GDP
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The government has three goals to promote economic strength: high ______ , ______ , and ______.
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Growth Employment Stability
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Improved ______ increases productivity. The government promotes new ideas by granting _____ and ______.
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Technology Patents Copyrights
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Public goods are those that would be hard to make people pay for ______ and ______ free riders from using.
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Individuals Exclusion
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Everyone pays for public goods through ______.
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Taxes
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Public goods are examples of market failure because the ______ _____ cannot distribute the ______.
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Free Market Efficiency Side Effects
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______ is government aid for those in need.
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Welfare
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The government's four main ______ transfer programs are ______ Assistance for Needy Families (TANF), ______ Security, ______ insurance, and workers' ______.
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Cash Temporary Social Un-Employment Compensation
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Tax law encourages donations to private ______, and government gives ____ to groups that provide social services.
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Charities Grants
