Download Review Questions for SOL CE 9 - Economic Decisions and the

Review Questions for SOL CE 11 - Economic Decisions and the Marketplace
1. Does the principle of scarcity mean that there are always enough resources for everyone to have everything
they want, or does it mean that resources are always limited? Resources are always limited.
2. As a result of the economic principle of scarcity, people, businesses, and governments must make
_____________ about what they want or value most. (Answer choices: guesses, choices, bets.)
3. In economics, the principle that says that there is never enough to satisfy the total of what everyone wants is
the principle of ________________. (Answer choices: consumer sovereignty, scarcity, opportunity cost.)
4. Economics teaches that when making any choice, it is always important to consider the alternatives you
could pick. When you have made your best choice, you are giving up the second choice, the next-best pick.
What is the term economists use for that second choice that you give up? opportunity cost
5. Jill decides to go to California this summer to visit her grandmother, who offered to pay for all her
expenses. Her only other plan was a job offer from a local water park, which she will not be able to accept if
she goes away. What is the opportunity cost of Jill's decision to visit her grandmother? The job offer
Use this picture to help you answer the next four questions.
6. The crew in the picture is drilling for oil. Is oil a natural resource or a capital good?
7. As a resource, what is the drilling equipment and machinery called? capital
8. As a resource, what is the skill and labor of the crew of the oil rig called? human
9. As a resource, what is the ability to start a new kind of oil exploration business called?
entrepreneurship
10. Production can be defined simply as the combining of _____________ to make
goods and services. (Answer choices: skills, resources, prices, money.)
11. Consumption is the act of ____________ goods and services (Answer choices:
using, making, designing.)
12. What gets purchased for consumption in our economy is determined mainly by consumer preferences and
by _____________. (Answer choices: government action, voting, price.)
Use this picture to help you answer the next two questions.
13. In economics, what is the term for the bonus promised by the boss
in the picture? (Answer choices: incentive, demand, price.)
14. What effect will the promise made by the boss in the picture
probably have on the behavior of the sales people as they go about their
jobs the rest of the year? Sales people will sell more.
15. The price the tomatoes in the picture will sell at is determined by
A. the sellers of the tomatoes only.
B. the buyers of the tomatoes only.
C. the interaction of supply and demand for tomatoes.
D. the government.
16. In economics, the amount of a good or service that sellers are willing to sell is called the
__________________. (Answer choices: price, supply, demand, profit.)
17. In economics, the amount of a good or service that buyers are willing to buy is called the
_________________. (Answer choices: price, supply, demand, profit.)
18. If a grocery store gets twice as many baskets of tomatoes in a delivery as it normally gets, what will the
manager probably decide to do to make sure they all sell? (Answer choices: throw out the extra baskets, raise
the price, lower the price, leave the price the same.)
19. A society in which almost all economic decisions are based on custom has a _______ economy. (Answer
choices: command, mixed, traditional.)
20. In which economic system does the government have the smallest role, with almost all economic decisions
left to individuals and businesses? (Answer choices: free market economic system, mixed economy,
command economy.)
21. In which economic system does the government have the largest role, making most of the economic
decisions in society? (Answer choices: free market economic system, mixed economy, command economy.)
22. What is the term for economies in which there is a sharing of economic decisions between the government,
individuals, and business? (Answer choices: free market economic system, mixed economy, command
economy.)
23. What is the best and most accurate description of the American economy? (Answer choices: free market
economic system, mixed economy, command economy.)
24. What is the term for the economic principle featured in the poster? (Answer
choices: profit motive, competition, consumer sovereignty.)
25. Competition in our economic system normally results in better products at
____________ prices for everyone. (Answer choices: higher, lower, the same.)
26. When people are allowed to own and control their own property, we say that
system recognizes the principle of __________________. (Answer choices:
competition, consumer sovereignty, private property.)
27. Businesses in America normally make decisions based on what will create the largest profit. Give a simple
formula that shows how profit is calculated. Earnings minus Expenses = Profit
28. If Jane's Health Food Shop sells $12,000 worth of groceries this month, and has total costs of $10,000 the
same month, how much profit did Jane's company earn? (Answer choices: $12,000; $10,000; $2,000.)
29. In what economic system are prices and production decisions made through central planning by the
government, allowing very little choice to consumers? (Answer choices: free market system, mixed economy,
command economy.)
30. What is the most common economic system in the world today? (Answer choices: free market system,
mixed economy, command economy.)