Economics
The_________of production include land, labor, capital and entrepreneurs.
Factors
Factors of Production
land, labor, capital, entrepreneurship
What group of people ultimately determines the products that a free enterprise economy produces?
Consumers
Define Sunk Cost.
What is a cost that has already been incurred?
Which of the following is an example of capital resources?
A) Market prices for goods
B) Consumer preferences for products
C) Government regulations
D) Factory equipment and machinery
What is D) Factory equipment and machinery?
What is Scarcity?
The limited nature of society's resources
The purpose of government in a command economy is to....
make major economic decisions
What are the three primary economic systems?
Traditional, Market, Command
A nation has the technology and labor to produce 100 units of capital goods or 200 units of consumer goods. Currently, it is producing 60 units of capital goods and 80 units of consumer goods. Which term describes this production situation?
A) inefficiency
B) Allocative efficiency
C) Economic growth
D) Opportunity Cost
What is A) inefficiency?
One disadvantage of a ________economy is the high degree of uncertainty that businesses and workers face as the result of change
Market
An example of a market economy is
United States
Market-based economic system with limited government involvement
Mixed Economy
In a Product Market, who is the seller?
What is a firm?
Manufactured goods needed to produce other goods and services are called
Capital goods
T or F: Voluntary exchange is a characteristic of command economies
False
The prices are not flexible in a
What is a Command Economy?
What is the efficiency of an economy?
the essential resources or factors of production (land, labor, capital, and entrepreneurship) are exchanged for money.
A rise in the general level of prices is called____________
What is inflation
What are the four basic economic questions?
What to produce, How to produce, For whom to produce, and How much to produce
A bakery offers free donuts to the first 50 customers. A customer waits in line for 30 minutes to receive a donut. The value of the customer's time represents:
A) production cost of the donut
B) opportunity cost of the donut
C) the explicit price of the donut
D) the marginal utility of the donut
What is B) opportunity cost of the donut?
A common outcome of the tragedy of the commons is resource depletion due to self interest
True or False
TRUE
In a market economy, what signal does a shortage of specific good send to resource allocators?
A) Price falls, incentivizing consumers to purchase less of that specific good
B) Price falls, incentivizing producers to allocate fewer resources to that good
C) Price rises, incentivizing producers to allocate more resources to that good
D) Price rises, incentivizing consumers to purchase more of that specific good
What is C) Price rises, incentivizing producers to allocate more resources to that good?
A worker can paint a room in 4 hours or repair a fence in 2 hours. What is the opportunity cost of painting one room?
A) 2.0 fences, calculated by dividing paint time by fence time
B) 0.5 fences, calculated by dividing fence time by paint time
C) 4.0 fences, calculated by assuming a one-to-one hourly rate
D) 8.0 fences, calculated by multiplying the time requirements
What is A) 2.0 fences, calculated by dividing paint time by fence time?
Economic growth occurs when a nation's total output of goods and services increases over time
True