Terms
Q: What is Economics?
A: The study of how people use limited resources to fulfill their needs and wants.
Q: Give an example of a monopoly.
A: Local water company or cable provider.
Q: Why do consumers enjoy competition?
A: It provides better quality products and keeps prices low.
Q: Shortage is the same as scarcity.
A: False
Q: What is Scarcity?
A: A basic economic problem that happens because people have unlimited wants, but resources are limited.
Q: What is an example of land when making a cheeseburger
A: lettuce; tomato; onion; cows; wheat; etc.
Q: What is microeconomics?
A: The study of economic behavior and decision-making of small units, like individuals and small businesses.
Q: Collusion is illegal.
A: True
Q: Define Opportunity Cost.
A: The next best alternative given up for a decision
Q: Give an example of an incentive in real life
A: BW3 BOGO night; Kids eat free at Homegrown; etc.
Q: According to rational economic decision-making, when should we accept an option?
A: When the benefits outweigh or equal the costs.
Q: Free Market economies have little to no government involvement.
A: True
Q: What is Marginal Analysis?
A: Comparing the additional benefits and additional costs of a decision.
Q: Name an example of a Horizontal Merger
A: Sprint and T-Mobile.
Q: What is an oligopoly?
A: A market dominated by a few firms that may collude or compete, e.g., cell phone companies.
Q: Command economies have each workplace set their own goals.
A: False
Q: What is a sunk cost?
A: Money already spent that cannot be recovered and should not affect future decisions.
Q: Give an example of product differentiation.
Apple – markets sleek design, ecosystem integration, privacy features
Samsung Electronics – emphasizes camera quality, customization, screen size
Both sell smartphones but highlight different features to stand out.
Q: How is the United States a mixed economy? Provide examples.
A: It combines free market and government involvement. Private: Netflix, restaurants; Public: Public schools, post office.
Q: A rational decision maker only makes a choice when marginal cost exceeds marginal benefit.
A: False