Economics Unit 1 quiz: Feb 2025

Question 1

Economics

Answer 1

study of how society manages its scarce resources

Question 2

scarcity

Answer 2

are not enough goods to meet peoples wants

Question 3

Trade-offs

Answer 3

A “trade-off” means when you choose one thing, but in doing so, you have to give up something else

Question 4

Opportunity cost

Answer 4

what you have to give up to buy what you want in terms of other goods or services.

Question 5

Four factors of production:

Answer 5

Land, Labor, Physical Capital, Human capital

Question 6

Entrepreneurship

Answer 6

the process of starting and managing a business to create value or make a profit

Question 7

Utility =

Answer 7

satifaction

Question 8

Marginal =

Answer 8

additional

Question 9

Allocate

Answer 9

distribute

Question 10

MICROeconomics

Answer 10

the study of choices made by SMALL economic units (such as businesses, individuals and industries

Question 11

MACROeconomics

Answer 11

study of the LARGE economy as whole

Question 12

Economic system

Answer 12

an organized way of providing the wants and needs of a society

Question 13

Traditional economy

Answer 13

raditional economies are those in which customs and traditions are more important than money
- all economic decisions are made on how they were decided in the past.

Question 14

command economy

Answer 14

all the decisions are made by the central authority - usually the government

Question 15

mixed economy

Answer 15

A “mixed economy” is an economic system that combines elements of both a free market (capitalism) and a planned economy.
- A mixed economy can be explained as an economic system that combines both market and society

Question 16

Market economy

Answer 16

an economic system in which the production of goods and services is determined by supply and demand

Question 17

Purpose of PPC (PPF)

Answer 17

it’s a way for people and countries to decide what combination of goods to produce w/the limited resources they have

Question 18

efficiency

Answer 18

not wasting time, money or resources

Question 19

4 key assumptions

Answer 19

1. only two goods can be produced at once
2. we can produce at 100% efficiency
3. Fixed (set #) resources - new resources are coming into the economy
4. Fixed technology –> no changes in technology

Question 20

allocative efficiency

Answer 20

products being produced are the ones most desired by society

Question 20

productive efficiency

Answer 20

products are being produced in the least costly way

Question 21

what are the three shifter

Answer 21

1. Change in resource quantity or quality
2. Change in trade
3. Change in technology

Question 22

Why/what do countries trade?

Answer 22

they trade fir what they want but can’t produce themselves –> more choices and higher standard of living

Question 23

specialization

Answer 23

focusing on producing products that one can make most efficiency

Question 24

absolute advantage

Answer 24

they have (Absolute advantage) if they can produce a great amount of goods/services or more efficiently.

Question 25

comparative advantage

Answer 25

they have (comparative advantage) if they can produce w/the lowest opportunity cost

Question 26

limitations of trade

Answer 26

- world price - tariff - quota

Question 27

protectionism

Answer 27

an economic policy that limits imports from other countries to protect domestic industries and jobs