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1. The word "economy" is derived from the Greek language with these root words: A. oikos, house; namos, rule B. oikos, house; logos, word C. oikas, house,- kai, and D. oikas, house; omega, end 2. The characteristics of a command based economic system include: A. the lack of heart, but efficiency in coordinating buyers and sellers, using a medium of exchange. the ability of leadership to move an economy forward, even if its participants are uncertain. stability and the reluctance to embrace change including technology. None of the above POP\" 3. If an economy uses outdated production methods, but no longer produces products such as VHS tapes, landline telephones and carbon paper, it is: A. achieving productive efficiency, but not allocative efficiency. B. not achieving productive efficiency, but it is achieving allocative efficiency. C. achieving both productive and allocative efficiency. D. engaged in roundabout production. 4. The expression "there's no such thing as a free lunch\" A. is generally untrue. B. is irrelevant to the subject of economics. C. recognizes that an economic system's capacity to produce goods and services is limited because economic resources are scarce and human wants are unlimited. D. is applicable solely to the inefficient use of resources. 5. Which of the following would an economist classify as capital? A. a 550 Federal Reserve note given to a friend for a birthday. B. a savings bond purchased by grandparents for a grandchild's birthday. C. an employee of one of the local hospitals. D. the instruments used by musicians at a concert. 6. Robert Heilbroner in the book, The Making of Economic Society, defines the mobilization of economic resources as A. assuring a viable use of economic resources to produce the goods and services most desired by the economic system. B. assuring that the goods and services produced are shared equitably among those who produced the goods and services and others in the economic system. C. finding a way to use up all the resources on the planet before alien invaders come to take them. D. identifying and ultimately, putting economic resources to work in productive ways. Bl. When Hurricane Andrew passed through the southern state of Louisiana in the summer of 1992, approximately a quarter (1/4) of the sugar cane crop was destroyed. Ceteris paribus (all other things held constant), A. the supply of sugar decreased, and the price of sugar increased. B. the supply of sugar decreased, and the price of sugar decreased. C. the demand for sugar increased and the price of sugar increased. D. the demand for sugar decreased and the price of sugar decreased. Choose your answer and show your work/analysis (it must include a graph). BZ. Ice cream and cake are complements. A decrease in the price of ice cream (the complement) would cause which of the following in the market for cake (the other good)? A. The equilibrium price and quantity of cake would 'I'. B. The equilibrium price and quantity of cake would 4,. C. The equilibrium price of cake would 'I' and the equilibrium quantity would '1'. D. The equilibrium price of cake would 4, and the equilibrium quantity would 'I'. Choose your answer and show your work/analysis (it must include a graph). SECTION C. C1. For a mixed economic system, such as the United States, discuss the opportunity costs of the decision to produce consumer goods versus capital goods. Include a production possibilities curve in your response. C2. Consider the U.S. version of command economy. Make a short list of 5 examples, historical and/or current, that illustrate command decisions