Economic Systems
What economic system follows customs and traditions?
Traditional Economy
What market structure has only one seller?
Monopoly
What is demand?
The amount of a product consumers are willing and able to buy at different prices.
What type of economics studies individuals, households, and businesses?
Microeconomics
What is opportunity cost?
The value of the next best alternative you give up when making a decision.
In a village, people grow their own crops and raise livestock just as their ancestors have done. They trade goods through bartering. What economic system does this represent?
Traditional Economy
What market structure is controlled by a few large companies?
Oligopoly
What is supply?
The amount of a product businesses are willing and able to sell at different prices.
What type of economics studies the economy as a whole?
Macroeconomics
Explain opportunity cost and provide a real-life example.
Opportunity cost is what you give up when choosing something else. For example, buying a concert ticket instead of a book means giving up the enjoyment of reading the book.
The state decides what is made, how much is produced, and who gets it. Citizens are provided necessities by the state. What economic system does this represent?
Command Economy
A few large companies control the entire smartphone industry. These companies compete fiercely, and new businesses struggle to enter the market. What market structure does this represent?
Oligopoly
There are 5,000 copies of a new limited-edition video game. However, 20,000 people signed up to preorder it. What will the company most likely do to the price?
Increase the price.
What is the difference between microeconomics and macroeconomics?
Microeconomics focuses on individuals and businesses, while macroeconomics focuses on the overall economy.
You choose to study for a test instead of going to the movies. What is your opportunity cost?
The enjoyment of going to the movies.
In which economic system do buyers and sellers primarily make economic decisions?
Market Economy
In a small town, one company controls the entire community's cable access. There are no permitted competitors, and the company determines its own prices. What market structure does this represent?
Monopoly
Ben sells lemonade for $2 per cup. He starts with 50 cups but has 35 left at the end of the day. What might he do to the price tomorrow?
Decrease the price.
A business decides to raise the price of its products. Is this an example of microeconomics or macroeconomics?
Microeconomics
Why does every economic decision involve opportunity cost?
Because choosing one option means giving up another option.
Which economic system combines private businesses with government involvement?
Mixed Economy
What market structure involves many businesses selling similar but slightly different products?
Monopolistic Competition
What generally happens to prices when demand is high but supply is limited?
Prices increase.
The government studies the nation's unemployment and inflation rates. Is this microeconomics or macroeconomics?
Macroeconomics
During the Great Depression, unemployment reached its highest rate in the United States. What was that rate?
24.9%