1.Which economic system is described as the result of buyers and sellers making decisions on how much to consume and produce?

tradition system

command system

nonprofit system

market system

2.Utility maximization says that the individual

is selfish

tries to make the most money possible

is moved by an invisible hand

tries to do what provides them with the most satisfaction

3.Which of the following represents greater productive efficiency?

A society that encourages the use of authentic traditions and crafts

The production of a new improved product that customers love

An investment in a better tool that increases how much a firm can produce

The movement away from using market equilibrium prices

4.Taking for granted the things you have a lot of, is expressed in economics as

increasing marginal utility

increasing total utility

decreasing total utility

decreasing marginal utility

5.Adam Smith believed specialization was important because

it increased separation of people by class and incomes earned

it decreased separation of people by class and incomes earned

it decreased production, wealth, and standard of living

it increased production, wealth, and standard of living

6.According to the production possibilities model and your readings about growth, what makes production possible?

political influence

wealth

resources

income

7.What forces us to make choices according to economists?

utility maximization

choices at the margin

scarcity

government

8.When an individual consumes something it is because

the opportunity cost was the highest

the marginal utlity is greater than the marginal cost

the consumer surplus was negative

the price of the good was a low price

9.Which of the following is an opportunity cost?

the price of tuition and books for going to college

the profit of a firm

money spent on car repairs keeps you from the opportunity of going back to school

an investment and its future returns

10.One of the main ways a society has to increase production is through

utility maximization

government control of resources

limiting wants and rationing

specialization and trade