ECONOMICS UNIT 1 Test Review Game

1. What is a basic requirement for survival? need 2. What term best describes the condition of too few resources to satisfy society's desires? scarcity 3. What term describes an economy that uses its resources to make the greatest possible number of goods and services? efficient 4. What term describes concentrating your productive efforts on a limited number of things? SPECIALIZATION 5. WHAT DOES THE PROCESS OF SPECIALIZATION DO FOR AN ECONOMY? It makes it more efficient 6. What is the highest valued alternative that is sacrificed in making a choice? opportunity cost 7. Scarcity requires that people must make _____. choices 8. What is the philosophy that government should not interfere in the marketplace? laissez faire 9. What are 2 types of GOODS we studied about in Chapter 3? public & private 10. What is another name for a person who buys a product? consumers 11. What is the most effective way for consumers to make their desires known to businesses? By the purchases they make

12. What terms describes a situation in which both parties to a transaction feel they benefit? voluntary exchange 13. The function of a(n) _____ is to produce and distribute goods and services. economic system 14. List 4 types of economic systems. Market Command Traditional Mixed 15. When is an economic system successful? (What is its goal?) When it satisfies the needs of its people 16. A father teaching his son how to clear land for crops would most likely be in which economic system? traditional 17. In which economic system would an entrepreneur most likely have the best chance for success? market 18. What illustrates the trade-offs facing an economy that produces only two goods? production possibilities frontier Use the graph on the left to answer #19 & 20 19. Which point or points represent efficiency? 20. Which point or points would indicate that there is no way to produce more of one good without producing less of the other? 21. What is a shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers? public good

22. What incentive do manufacturers have to sell their products? To make profits on sales 23. What are the three key economic questions? What to produce? How to produce? Who to produce for? 24. What shows the relationship between businesses & households in a market economy? the circular flow 25. Who are the two players in the circular flow model? households & businesses (firms)