Economic Systems
Which of these statements describes a disadvantage of a traditional economy?
New ways of doing things are discouraged.
Which would an economist consider a likely substitute for coffee?
Tea
In an attempt to increase the production of oil and gasoline, Congress and the President have given the okay to drill in the Alaskan Arctic Preserve. What happens to the market for gasoline?
Supply for gasoline will decrease
Which of the following descriptions best explains the meaning of opportunity cost?
the cost of choosing one alternative over another
Which is the opposite of a surplus?
shortage
In which of these systems is the government most likely to provide people with goods and services they could not otherwise afford?
a socialist economy
On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of ___
a change in price
According to the Law of Supply, which of these would happen to an item as its price rose?
Producers would make more of it.
The most comprehensive measure of a nation’s wealth is provided by its
gross domestic product.
The efficient use of scarce resources leads to an increase in
productivity
The economic system of the United States is considered a
free market capitalist economy
What is the income effect?
a change in quantity demanded caused by a change in consumer income
Which of these do producers of an item hope to achieve when adopting new technologies?
a shift of the supply curve for that item to the right
The study of economics involves
explaining how people deal with scarcity.
Equilibrium is reached when what occurs?
quantity supplied equals quantity demanded
One of the characteristics of a capitalist free enterprise economy is
voluntary exchange
What are the characteristics of demand?
the desire, ability, and willingness to buy a product
Costs of producing gasoline has increased due to rising energy costs. What happens to the market for gasoline?
Supply for gasoline will decrease
The four factors of production are land, labor, capital, and
entrepreneurs
Which term best describes rent control?
price ceiling
Which of the following is largely responsible for the growth of a free enterprise system
profit motive
The law of demand states that if the price of burgers rise, consumers will
Buy fewer burgers
What does the acronym #STEPTGC mean?
#StepthroughGiantCactus
Paradox of value refers to the
high value of a nonessential item and the low value of an essential item.
Under perfect competition, what sets the equilibrium price in the market?
Supply and Demand