Economics Final Exam Review Guide
questions answered correctly.
What is economics? ANS - The study of how individuals and societies satisfy their unlimited wants with
limited resources.
Scarcity ANS - Situation that exists when there are not enough resources to meet human needs
What is the land resource? ANS - All the natural resources on or under the ground that are used to
produce goods and services.
What is the labor resource? ANS - All the human time, effort, and talent used to produce goods and
services.
What is the capital resource? ANS - All the resources people make and use to produce and distribute
goods and services.
What is the entrepreneurship resource? ANS - The combination of vision, skill, ingenuity, and
willingness to take risks that is needed to create and run new businesses.
What is the circular flow model? ANS - Visualizes how interactions occur in a market economy.
What are product markets?
Who is the supplier? ANS - The market for goods and services
Businesses, offer goods and services
What are factor markets?
, Who are the suppliers? ANS - The market for the factors of production, land labor capital
entrepreneurship
Businesses are the customers and the individual serves them.
What is the US economic system? ANS - Capitalist
What is capitalism? ANS - Economic system based on private ownership of factors of production.
What happens in a free enterprise system? ANS - Producers can produce whatever the consumers
want. Anyone is free to start a business or enterprise.
What is the definition of opportunity cost? ANS - The value of something that is given up by choosing
one alternative over another. What you lose when you choose.
What is the definition of Ceteribus Paribus? ANS - All things being equal or held constant.
What are the three economic questions? ANS - What will be produced?
How will it be produced?
For whom will it be produced?
What is a production possibilities curve? ANS - Graph used to illustrate the impact of scarcity on an
economy by showing the maximum number of goods or services that can be produced using limited
resources.
What are the four assumptions of the PPC model? ANS - 1. Resources are fixed
2. All resources are fully employed
3. Only two things can be produced.
4. Technology is fixed.
What does increasing opportunity costs on a PPC curve look like?
questions answered correctly.
What is economics? ANS - The study of how individuals and societies satisfy their unlimited wants with
limited resources.
Scarcity ANS - Situation that exists when there are not enough resources to meet human needs
What is the land resource? ANS - All the natural resources on or under the ground that are used to
produce goods and services.
What is the labor resource? ANS - All the human time, effort, and talent used to produce goods and
services.
What is the capital resource? ANS - All the resources people make and use to produce and distribute
goods and services.
What is the entrepreneurship resource? ANS - The combination of vision, skill, ingenuity, and
willingness to take risks that is needed to create and run new businesses.
What is the circular flow model? ANS - Visualizes how interactions occur in a market economy.
What are product markets?
Who is the supplier? ANS - The market for goods and services
Businesses, offer goods and services
What are factor markets?
, Who are the suppliers? ANS - The market for the factors of production, land labor capital
entrepreneurship
Businesses are the customers and the individual serves them.
What is the US economic system? ANS - Capitalist
What is capitalism? ANS - Economic system based on private ownership of factors of production.
What happens in a free enterprise system? ANS - Producers can produce whatever the consumers
want. Anyone is free to start a business or enterprise.
What is the definition of opportunity cost? ANS - The value of something that is given up by choosing
one alternative over another. What you lose when you choose.
What is the definition of Ceteribus Paribus? ANS - All things being equal or held constant.
What are the three economic questions? ANS - What will be produced?
How will it be produced?
For whom will it be produced?
What is a production possibilities curve? ANS - Graph used to illustrate the impact of scarcity on an
economy by showing the maximum number of goods or services that can be produced using limited
resources.
What are the four assumptions of the PPC model? ANS - 1. Resources are fixed
2. All resources are fully employed
3. Only two things can be produced.
4. Technology is fixed.
What does increasing opportunity costs on a PPC curve look like?
