Economics Final Review2017Mr. Belding

1. What is the difference between a need and a want?

2. What is a capital good?

3. The study of how people try to satisfy seemingly unlimited wants with limited resources is called…

4. When individuals in an economy focus on doing what they’re good at, it increases the efficiency of the economy because fewer resources will be wasted. This is referred to as ______.

5. What is the role of the entrepreneur?

6. The fundamental problem facing all societies is that of ______.

7. If a business is producing 20 cell phones and 15 televisions, and they begin producing 5 televisions and 40 cell phones, what is the opportunity cost?

8. Describe the area below the Production Possibilities Curve

9. Describe a point on the Production Possibilities Curve

10. What are the three basic questions?

  1. A company has decided to produce radios and is planning on selling them to high school seniors. Their decision on marketing them to high school seniors answers which of the three basic questions?
  1. Wal-Mart sells two different brands of blue jeans. One costs $15 and is very good quality, while the other is $20 and is of a lesser quality. The people who make the $20 pair of jeans want to sell more of their product and be more successful. What is the condition called that results in the best product at the lowest price?
  1. Markets eliminate the need for individuals to be ______because they can trade goods, services or other payments for what they need.

Economics Final Review2017Mr. Belding

  1. If you live in a society where work is divided among gender lines and you will therefore do what either you mother or father did before you, what type of economy do you most likely live in?

Economics Final Review2017Mr. Belding

  1. One of the advantages of a free market is ______because with a variety of tastes, consumers get to vote with their feet and buy what they want, which results in suppliers producing different goods.
  1. If Maria’s parents promise to buy her concert tickets if she improves her grades, what incentive does this create?

Economics Final Review2017Mr. Belding

  1. In the past ______years, more people have been lifted out of poverty than in the past 2,000 years in part because of the work of Adam Smith and free market economics.

Economics Final Review2017Mr. Belding

Economics Final Review2017Mr. Belding

18. Adam Smith and his ideas heavily influenced which countries from their very beginning?

19. What are the factors of production?

Economics Final Review2017Mr. Belding

20. How is equity achieved in communist societies?

Economics Final Review2017Mr. Belding

21. Which economic system is a command style economy that does not require a violent revolution but can be implemented using a democratic form of government?

22. Which economic system requires a violent revolution to seize the factors of production so that they can be run by a collective instead of individual?

23. Why was the economic goal of equity most important to Karl Marx?

  1. What is the motivating force in a market economy?
  1. What is the regulatory force in a market economy?
  2. What does TINSTAAFL demonstrate about an economy?
  1. Why is private property essential to a Free Enterprise Economy?
  2. How does the consumer determine which businesses fail and which ones thrive?
  1. Who benefits the most from a centrally planned economy in theory?
  1. Who benefits the most from a centrally planned economy in practice?
  1. What are the Five Pillars of Capitalism?
  1. Does democracy as a system of government means the absence of coercion.
  1. When government punished the Christian bakers in Oregon for not baking a wedding cake for the lesbian couple, which principle of the free market was violated?
  1. In what way does the free market give people what they want instead of what a particular group of people thinks everyone should want?
  1. Why is there a wider diversity of ideas in capitalist societies than communist societies?
  1. Dalton Trumbo was blacklisted due to his political beliefs in the United States during the Red Scare. Because economic and political powers are kept separate, what was the result?

Price System

  1. ______are a tool in a free market system for distributing goods and resources throughout the economy.
  2. What does a higher price for a good tell a producer?
  3. Why do economists say that the price system is “free”?
  4. How does a black market undermine the economic system of rationing?
  5. How is the distribution of income linked to the value of the resources that one owns?

Demand

  1. Demand is more than the desire to buy something. What else does it require?
  2. According to the law of demand, what would you expect to happen to the truck market if the price of a truck goes up?

Shift in Demand

  1. What effect does a rise in income have on demand?
  1. When ceteris paribus is applied to demand, whatis the only factor that affects demand?
  1. What effect would a population moving out of an area have on demand?

Supply

  1. Define the law of supply.
  2. What effect would an increase in taxes have on the supply curve?
  3. If the cost of electricity to keep a business going increases, what effect would that have on the supply curve?
  4. What is the name of the point where supply and demand have the same quantities and the same prices?