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REVIEWEconomics EOC Review
Unit 1 Review Questions
Question 1What are the three
key economic questions?
Question 1 What are the three key
economic questions? What should be produced?
For whom should we produce it ?
How should we produce it?
Question 2What are the factors
of production?
Question 2What are the factors of
production? Land Labor
Capital
Question 3 Any product that is man-made and is used to make
other goods/services is considered _____ when
discussing the factors of production
Question 3Any product that is
man-made is considered _capital_ when discussing the factors of production
Question 4Economics is the study of
____
Question 4 Economics is the study of
____
How a society uses its resources to satisfy its
wants and needs
Question 5All resources are
___
Question 5All resources are
___Scarce
Question 6 What is the function of an economic system?
A. to make sure all people have equal access to goods
B. to produce and distribute goods and services
C. to give all producers the same access to consumers
D. to make sure people are paid for their labor
Question 6 What is the function of an economic system?
A. to make sure all people have equal access to goods
B. to produce and distribute goods and services
C. to give all producers the same access to consumers
D. to make sure people are paid for their labor
Question 7 What is the struggle among various
producers for the consumer’s business called?
A. socialism B. incentive C. competition D. self-regulation
Question 7 What is the struggle among various
producers for the consumer’s business called?
A. socialism B. incentive C. competition D. self-regulation
Question 8 Which of the following is NOT characteristic
of a centrally planned economy? A. The central government owns all land
and capital. B. The central government makes all
economic decisions. C. Each collective or factory sets its own
goals. D. Each person is assigned a job.
Question 8 Which of the following is NOT characteristic
of a centrally planned economy? A. The central government owns all land
and capital. B. The central government makes all
economic decisions. C. Each collective or factory sets its own
goals. D. Each person is assigned a job.
Question 9 Which of the following was a free
market philosopher?
A. Karl Marx B. Vladimir Lenin C. Adam Smith D. Friedrich Engels
Question 9 Which of the following was a free
market philosopher?
A. Karl Marx B. Vladimir Lenin C. Adam Smith D. Friedrich Engels
Question 10 What is the motivating force behind the
free market?
A. competition B. self-interest C. the invisible hand D. specialization
Question 10 What is the motivating force behind the
free market?
A. competition B. self-interest C. the invisible hand D. specialization
Question 11 A person who believed in the doctrine of
laissez faire would disapprove of
A. the invisible hand of the marketplace. B. consumer sovereignty. C. self-interest as the motivating force
in the free market. D. government funding of education.
Question 11 A person who believed in the doctrine of
laissez faire would disapprove of
A. the invisible hand of the marketplace. B. consumer sovereignty. C. self-interest as the motivating force
in the free market. D. government funding of education.
Question 12 Suppose there is a family in which all the
boys are expected to become farmers when they are adults, just as their fathers and grandfathers did. In which kind of economy do they participate?
A. false economy B. traditional economy C. command economy D. centrally planned economy
Question 12 Suppose there is a family in which all the
boys are expected to become farmers when they are adults, just as their fathers and grandfathers did. In which kind of economy do they participate?
A. false economy B. traditional economy C. command economy D. centrally planned economy
Question 13 Households pay firms for goods and
services. Firms supply households with goods and services. The purchase and supply of goods and services takes place in the
A. product market. B. after market. C. factor market. D. traditional market.
Question 13 Households pay firms for goods and
services. Firms supply households with goods and services. The purchase and supply of goods and services takes place in the
A. product market. B. after market. C. factor market. D. traditional market.
Question 14 A person believes that real equality can only
exist when political equality is coupled with economic equality. This person believes that democratic means should be used to distribute wealth evenly throughout society. This person is a
A. socialist. B. capitalist. C. communist. D. authoritarian.
Question 14 A person believes that real equality can only
exist when political equality is coupled with economic equality. This person believes that democratic means should be used to distribute wealth evenly throughout society. This person is a
A. socialist. B. capitalist. C. communist. D. authoritarian.
Question 15 What does the process of specialization
do for an economy?
A. It eliminates unemployment. B. It fosters competition. C. It makes it more efficient. D. It makes it easier to control.
Question 15 What does the process of specialization
do for an economy?
A. It eliminates unemployment. B. It fosters competition. C. It makes it more efficient. D. It makes it easier to control.
Question 16 What is an important advantage of a free
market?
A. It does not change unless the government directs it.
B. It offers a wide variety of goods and services.
C. It is easy to regulate. D. It protects the less fortunate.
Question 16 What is an important advantage of a free
market?
A. It does not change unless the government directs it.
B. It offers a wide variety of goods and services.
C. It is easy to regulate. D. It protects the less fortunate.
Question 17 Government intervention in a modern
economy is useful because A. the needs and wants of modern society are
always met by the marketplace.B. the marketplace has many incentives to create
public goods such as parks and libraries.C. governments are able to provide some goods
and services that the marketplace has no incentive to produce.
D. the marketplace provides all of its own laws.
Question 17 Government intervention in a modern
economy is useful because A. the needs and wants of modern society are
always met by the marketplace.B. the marketplace has many incentives to create
public goods such as parks and libraries.C. governments are able to provide some goods
and services that the marketplace has no incentive to produce.
D. the marketplace provides all of its own laws.
Question 18 Why do markets exist?
A. Markets ensure that government does not intervene in the production of goods and services.
B. Markets provide self-sufficient people with public places for the exchange of ideas.
C. Markets ensure economic equity for all people. D. Markets allow people to buy what they need to
consume and sell the specialized goods and services they produce.
Question 18 Why do markets exist?
A. Markets ensure that government does not intervene in the production of goods and services.
B. Markets provide self-sufficient people with public places for the exchange of ideas.
C. Markets ensure economic equity for all people. D. Markets allow people to buy what they need to
consume and sell the specialized goods and services they produce.
Question 19 Who was the writer that introduced
communism and central planning to the former Soviet Union?
A. Karl Marx B. Vladimir Lenin C. Joseph Stalin D. Friedrich Engels
Question 19 Who was the writer that introduced
communism and central planning to the former Soviet Union?
A. Karl Marx B. Vladimir Lenin C. Joseph Stalin D. Friedrich Engels
Question 20 What factors create the phenomenon
of the “invisible hand”?
A. incentives and efficiency.B. specialization and efficiency.C. competition between firms.D. competition and self interest.
Question 20 What factors create the phenomenon
of the “invisible hand”?
A. incentives and efficiency.B. specialization and efficiency.C. competition between firms.D. competition and self interest.
What does the upper half of Figure 2.1, marked “1,” represent?
According to Figure 2.1, what does the lower line of monetary flow, marked “2,” show?
Question 23 The purpose of a production possibilities
graph is to A. enable a country to mobilize to win a war. B. keep an economy from having
nonproductive workers. C. show alternative ways to use an
economy’s resources. D. make it possible to increase an
economy’s output.
Question 23 The purpose of a production possibilities
graph is to A. enable a country to mobilize to win a war. B. keep an economy from having
nonproductive workers. C. show alternative ways to use an
economy’s resources. D. make it possible to increase an
economy’s output.
Question 24 Production possibilities frontiers curve when
they are charted on a graph because they show
A. the underutilization of resources. B. the maximum output of goods and services. C. the increasing costs resulting in increasingly
less output. D. the technological level of the economy’s
productivity.
Question 24 Production possibilities frontiers curve when
they are charted on a graph because they show
A. the underutilization of resources. B. the maximum output of goods and services. C. the increasing costs resulting in increasingly
less output. D. the technological level of the economy’s
productivity.
Question 25 What is the opportunity cost of a decision?
A. the series of alternative decisions that could have been made
B. the best possible way the question could have been decided
C. the different ways that a different person might have made the decision
D. the most desirable alternative given up for the decision
Question 25 What is the opportunity cost of a decision?
A. the series of alternative decisions that could have been made
B. the best possible way the question could have been decided
C. the different ways that a different person might have made the decision
D. the most desirable alternative given up for the decision
Question 26 Which of the following lists would an
economist consider to be land? A. factories, office buildings, assembly
lines, workers B. farm fields, tractors, pesticides,
fertilizers C. dams, bridges, rock quarries, oil wells D. iron ore, natural gas, fertile soil, water
Question 26 Which of the following lists would an
economist consider to be land? A. factories, office buildings, assembly
lines, workers B. farm fields, tractors, pesticides,
fertilizers C. dams, bridges, rock quarries, oil wells D. iron ore, natural gas, fertile soil, water
Question 27 Which of the following would qualify
as labor?A. working for Habitat for Humanity to help
build a house for someone.B. sweeping the floors as part of your
household chores.C. taking orders at McDonald's for
minimum wage.D. studying for your tests and doing your
homework.
Question 27 Which of the following would qualify
as labor?A. working for Habitat for Humanity to help
build a house for someone.B. sweeping the floors as part of your
household chores.C. taking orders at McDonald's for
minimum wage.D. studying for your tests and doing your
homework.
Question 28 Louisville Slugger, a company that makes
baseball bats, is underutilizing its resources. What does this mean?A. Louisville Slugger is running efficiently.B. Louisville Slugger is running more efficiently
than its competitors.C. Louisville Slugger should be making baseball
gloves rather than baseball bats.D. Louisville Slugger is producing fewer bats
than it could be.
Question 28 Louisville Slugger, a company that makes
baseball bats, is underutilizing its resources. What does this mean?A. Louisville Slugger is running efficiently.B. Louisville Slugger is running more efficiently
than its competitors.C. Louisville Slugger should be making baseball
gloves rather than baseball bats.D. Louisville Slugger is producing fewer bats
than it could be.
Question 29 The government of a country must
make a decision between increasing military spending and subsidizing farmers. This kind of decision is a matter ofA. guns or butter.B. deciding on the opportunity cost.C. a trade-off.D. a basic economic decision.
Question 29 The government of a country must
make a decision between increasing military spending and subsidizing farmers. This kind of decision is a matter ofA. guns or butter.B. deciding on the opportunity cost.C. a trade-off.D. a basic economic decision.
Question 30 What is the difference between a shortage
and scarcity?A. A shortage can be temporary or long-term,
but scarcity always exists.B. A shortage results from rising prices; scarcity
results from falling prices.C. A shortage is a lack of all goods and services;
scarcity concerns a single item.D. There is no difference between a shortage
and scarcity.
Question 30 What is the difference between a shortage
and scarcity?A. A shortage can be temporary or long-term,
but scarcity always exists.B. A shortage results from rising prices; scarcity
results from falling prices.C. A shortage is a lack of all goods and services;
scarcity concerns a single item.D. There is no difference between a shortage
and scarcity.