Economics Final Exam questions with
answers 100% correct.
Economics ANS - the study of how people seek to satisfy their needs and wants by making choices
Horizontal Merger ANS - the combination of two or more firms competing in the same market with the
same good or service
Vertical Merger ANS - the combination of two or more firms involved in different stages of producing the
same good or service
Shortage ANS - a situation in which a good or service is unavailable
Scarcity ANS - limited quantities of resources to meet unlimited wants
Factors of Production ANS - land, labor, and capital; the three groups of resources that are used to make
all goods and services
Entrepreneur ANS - ambitious leader who combines land, labor, and capital to create and market new
goods or services
Trade-Off ANS - the alternative we sacrifice when we make a decision
Opportunity Cost ANS - the most desirable alternative given up as the result of a decision
Human Capital ANS - the skills and knowledge gained by a worker through education and experience
, Physical Capital ANS - all human-made goods that are used to produce other goods and services; tools
and buildings
Thinking at the Margin ANS - deciding whether to do or use one additional unit of some resource
Production Possibility Graph ANS - a graph that shows alternative ways to use an economy's resources
Production Possibility Frontier ANS - the line on a production possibilities graph that shows the
maximum possible output for a specific economy
Adam Smith ANS - classic economist that believed the market could regulate itself
Classical Economics ANS - the idea that free markets can regulate themselves
Free Market ANS - individuals and privately owned businesses own the factors of production and
therefore, make what they want and buy what they want
Command Economy ANS - economic system in which the central government makes all of the decisions
on the production and consumption of goods and services
Mixed Economy ANS - economic system that combines tradition and free market with limited
government involvement
Natural Monopoly ANS - a market that runs most efficiently when one large firm supplies all of the
output
Perfect Competition ANS - a market structure in which a large number of firms all produce the same
product
Monopolistic Competition ANS - a market structure in which many companies sell products that are
similar but not identical
answers 100% correct.
Economics ANS - the study of how people seek to satisfy their needs and wants by making choices
Horizontal Merger ANS - the combination of two or more firms competing in the same market with the
same good or service
Vertical Merger ANS - the combination of two or more firms involved in different stages of producing the
same good or service
Shortage ANS - a situation in which a good or service is unavailable
Scarcity ANS - limited quantities of resources to meet unlimited wants
Factors of Production ANS - land, labor, and capital; the three groups of resources that are used to make
all goods and services
Entrepreneur ANS - ambitious leader who combines land, labor, and capital to create and market new
goods or services
Trade-Off ANS - the alternative we sacrifice when we make a decision
Opportunity Cost ANS - the most desirable alternative given up as the result of a decision
Human Capital ANS - the skills and knowledge gained by a worker through education and experience
, Physical Capital ANS - all human-made goods that are used to produce other goods and services; tools
and buildings
Thinking at the Margin ANS - deciding whether to do or use one additional unit of some resource
Production Possibility Graph ANS - a graph that shows alternative ways to use an economy's resources
Production Possibility Frontier ANS - the line on a production possibilities graph that shows the
maximum possible output for a specific economy
Adam Smith ANS - classic economist that believed the market could regulate itself
Classical Economics ANS - the idea that free markets can regulate themselves
Free Market ANS - individuals and privately owned businesses own the factors of production and
therefore, make what they want and buy what they want
Command Economy ANS - economic system in which the central government makes all of the decisions
on the production and consumption of goods and services
Mixed Economy ANS - economic system that combines tradition and free market with limited
government involvement
Natural Monopoly ANS - a market that runs most efficiently when one large firm supplies all of the
output
Perfect Competition ANS - a market structure in which a large number of firms all produce the same
product
Monopolistic Competition ANS - a market structure in which many companies sell products that are
similar but not identical
