1.Which type of economy allows the individuals to answers the three basic economic questions and own the factors of production.

Traditional Economy

Free Market Economy

Democratic Economy

Command Economy

2.When societies are using all available resources and technology most efficiently they are

operating outside of the production possibilities curve.

operating on the production possibilities curve.

not meeting the supply demands of their citizens.

paying their employees a fair wage.

3.In a _______________ market, businesses exchange money payments with households for their productive resources.

product

resourced

mixed

command

4.The profit motive encourages entrepreneurs to start businesses, expand existing one, create new products or improve existing ones, and/or improve production processes to use resources efficiently.

True

False

5.Microeconomics studies the decision making of individuals about the allocation of resources.

True

False

6.When voluntary exchange occurs in the economy it creates wealth.

True

False

7.The study of how people, firms, and governments make decisions about how to allocate scare resources to meet unlimited wants is known as

opportunity cost

scarcity

economics

capital

8.The government's role in a market economy is limited.

True

False

9.In a command economy the government answers the three basic economic questions and owns the factors of production.

True

False

10.James Madison is considered the "Father of Capitalism".

True

False

11.Economics believe that the best decisions are made at the _________________.

margin

alternative

opportunity

12.The four factors of production are land, labor, capital, and time.

True

False

13.The Production Possibilities Curve is used to explain the concepts of scarcity and

opportunity cost

substitutes

microeconomics

opportunity benefit

14.In the ______________ market, households exchange money payments for finished goods and services with firms.

resourced

mixed

command

product

15.A desire that can be satisfied by consuming an economic good or service is an economic need.

True

False

tradeoff

12.