UNIT 2: INTRODUCTION TO ECONOMICS TEST REVIEW

1. Which of the following is NOT a factor of production? a. Land b. Labor c. Capital d. Resources

2. Which of the following is NOT an economic question? a. What goods and services should be produced? b. When should goods and services be produced? c. How should goods and services be produced? d. For whom should goods & services be produced?

3. Which of the following is NOT a variable cost? a. Electricity b. Rent c. Gasoline d. Groceries

4. The symbol that represents “profit” in the study of business and economics is: a. € b. £ c. π d. ∞

5. When a business is profitable it is said to be operating: a. “In the red” b. “In the black” c. “In the green” d. “In the blue”

6. The economic system that is indicative of Capitalism is known as a: a. Command Economy b. Free Enterprise c. Mixed Economy d. Fascism

7. The economic system that is found in a Communistic political system is a: a. Command Economy b. Free Enterprise c. Mixed Economy d. Fascism

8. The economic system that is found in a Socialistic political system is a: a. Command Economy b. Free Enterprise c. Mixed Economy d. Fascism

9. Karl Marx is the author of: a. The Wealth of Nations b. Atlas Shrugged c. The Communist Manifesto d. None of the above

10. Adam Smith is the author of: a. The Wealth of Nations b. Atlas Shrugged c. The Communist Manifesto d. None of the above

11. Which of the following does NOT characterize a command economy? a. The presence of competition b. The economic question are answered by the government c. Very little economic choice d. No private ownership

12. Which of the following does NOT characterize a free enterprise? a. The presence of competition b. The ability to earn a profit c. Very little economic choice d. Private ownership

13. Who is considered to be “The Father of Communism”? a. Adam Smith b. John Maynard Keynes c. Karl Marx d. Jerry Seinfeld

14. Adam Smith was a proponent of the idea that if left alone, a free market economy will “self-regulate”. This idea he referred to as: a. The Capitalist Way b. The Private Sector c. The Transparent Government d. The Invisible Hand

15. When a government practices a “hands off” strategy to let the market place determine production it is said to have adopted a _________________ approach. a. Laissez-faire b. C’est La Vie c. Das Kapital d. Communist Manifesto

16. Which of the following best describes the American economic system? a. Free Market b. Free Enterprise c. Market Economy d. All of the above

17. The element of a free enterprise system which leads to excellence in production is: a. Profit b. Competition c. Risk d. Consumer Sovereignty

18. The element of a free enterprise system which suggests that the consumer controls production is: a. Profit b. Competition c. Risk d. Consumer Sovereignty

19. Employment in manufacturing for which a wage is earned, is most commonly referred to as a ____________ job. a. White Collar b. Blue Collar c. Red Collar d. Black Collar

20. Careers in industries that require a higher education and for which individuals receive salaries are most commonly referred to as a. White Collar b. Blue Collar c. Red Collar d. Black Collar

21. Typically, when supply increases, price ____________________________. a. increases b. decreases c. stays the same d. it varies substantially

22. Typically, when demand increases, price ____________________________. a. increases b. decreases c. stays the same d. it varies substantially

23. When an agreement can’t be reached between labor unions which represent workers and management a(n) ________________ may occur. a. stock marketing crash b. strike c. score d. uprising

24. Earning a specified amount of money per hour as income is commonly referred to as a _________________. a. Salary b. Bonus c. Wage d. Benefit

25. When representatives of a union and a company negotiate a contract for the workers it is referred to as: a. teamwork b. collective bargaining c. forming a league d. none of the above

The study of how individuals and societies make decisions about ways to use scarce resources to fulfill wants and needs. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The study of the “big picture”: ie. growth, employment, etc. and the study of decisions made by large groups (like countries). Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The study of how individuals make decisions. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The value of the next best choice when making a decision. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

Work that is performed for others. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

Resources including tools, machinery, factories, and money. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

People who buy goods and services. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The total amount of money it takes to produce an good/service. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The total amount of money a company or the government takes in. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

Expenses that a business/individual MUST pay each month or year. (Ex. Rent) Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

Expenses a business/individual pays that changes over time (Ex. utilities and labor). Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The difference between total costs and revenues. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

A famous proponent of Capitalism who suggested the theory of “The Invisible Hand”. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

A supporter of Communism who wrote “The Communist Manifesto” and “ Das Kapital”. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

A famous supporter of Socialism who had a branch of economics named after him. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

Organizes the (other) factors of production to provide goods & services. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The cost of producing one more unit. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

When the “labor’s” demands are not met during collective bargaining, a ______________ may occur. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

Weighing the Marginal Costs vs. the Marginal Benefits of producing an item or making any economic decision. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The extra goods and services that result from supply exceeding demand. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

The result in inadequate goods and services when demand exceeds supply. Adam Smith Capital Consumer Cost Cost Benefit Analysis Economics Entrepreneurship Fixed Costs Goods John Maynard Keynes Karl Marx Macroeconomics Marginal Costs Microeconomics Opportunity Cost Profit Revenue Services Shortage Strike Surplus Variable Costs

Give one example of Capital:

List one advantage of Capitalism:

List one disadvantage of Capitalism:

List one advantage of a command economy (Communism):

List one disadvantage of a command economy (Communism):

Give one example of a natural resource (Land):

With regard to supply and demand, choose the appropriate term from inside the parenthesis that will make the statement true. (1) Increased demand creates a situation where supply of the product is not sufficient to satisfy all consumers who want to buy it. As a result, producers may ________________________ (increase/decrease) their prices.

With regard to supply and demand, choose the appropriate term from inside the parenthesis that will make the statement true. (2) Increased profits prompt current producers to make more of the product and attract other producers to start providing the product, thus, supply ________________________ (increases/decreases)

With regard to supply and demand, choose the appropriate term from inside the parenthesis that will make the statement true. (3) Supply then exceeds demand, and consumers can pick and choose. In order to entice consumers to buy their product instead of their competitors’, producers ________________________ (increase/reduce) their prices.

With regard to supply and demand, choose the appropriate term from inside the parenthesis that will make the statement true. (4) Reducing prices, in turn, ________________________ (raises/lowers) profits and producers begin to produce less.

With regard to supply and demand, choose the appropriate term from inside the parenthesis that will make the statement true. (5) Eventually, the product reaches the ________________________ (equilibrium/highest)price which is the price at which the quantity supplied equals the quantity demanded of the product. At this price, there is enough of the product available for all consumers who want to buy it.

Describe something you learned in this unit that you find interesting and/or personally useful.