1. According to the "guns and butter" example, if a country decides to spend more on military goods, which of the following will happen?
The country will have less money to devote to consumer goods.
The country will have an equal amount of money to devote to consumer goods.
The country will be forced to make trade-offs in military purchasing.
The country will have more resources to devote to consumer goods.
2. By the end of the summer, Jason had saved enough money for college from his job as a waiter. He even had some money left over. Although he wanted both, he decided to buy a DVD player rather than a digital camera. Which of the following is the opportunity cost in this scenario?
the DVD player
the digital camera
college
the job
3. How does a society answer the three economic questions about the production and consumption of goods and services?
Its answer is based on the importance it attches to various economic goals and societal values.
Its answer is based on the importance it attaches to the stock market.
Its answer is based on recent technological advances.
Its answer is based solely on current environmental regulation.
4. Centrally planned economies can work effectively toward explicity stated goals, but which of the following is one disadvantage of such a system?
Its performance almost always falls short of its ideals.
These economies can never produce an increase in output.
The workers control all the production factors.
It gives too many rewards for innovation.
5. The purpose of the free enterprise system is to
give consumers goods and services free of charge.
eliminate economic choices.
create political campaign slogans.
give consumers freedom to make economic choices.
