Question

class _______
economics – semester exam review

1. the four factors of production are _____, ___, ___ and _____.
2. the three basic economic questions are:

_______
_______
_______

1. consumer goods are what households use and _______ goods are what businesses use to produce other goods.
2. the former soviet union is an example of a _______ economy.
3. an advantage of a market economy is that it can _______ to change over time.
4. define consumer sovereignty.
5. an entrepreneur would have the best chance of being successful in a _______ economy.
6. the three main types of economic systems are _____, ___, and _____.
7. in a modified private enterprise economy there is (no, some) _______ government intervention.
8. the main difference between a for - profit business and a nonprofit organization is that the nonprofit organization (does or does not) _______ seek economic profit.
9. a corporation has _______ liability.
10. when corporations combine that do the same thing, it is a _____ merger, but when they combine and each does various steps of production it is a _____ merger.
11. what is an advantage of a merger?
12. the study of economics is important because it _______.
13. on a production possibilities curve, a country would be (not at its potential, at its potential) _____ if it is operating on the curve and _____ if it is operating inside the curve.
14. define conspicuous consumption.
15. the american economic system is described as a _______ economy.
16. _____ makes the economic decisions in a market economy and _____ make these decisions in a command economy.

Explanation:

These questions are about basic economic concepts like factors of production, economic systems, and business organizations. The subfield of Business (Economics) is the most relevant as these topics fall under the study of economics within business disciplines. For each question, we recall key economic definitions and concepts:

1. The four factors of production are land, labor, capital, and entrepreneurship.
2. The three basic economic questions are what to produce, how to produce, and for whom to produce.
3. Consumer goods are for households; capital goods are for businesses to produce other goods.
4. The former Soviet Union was a command economy.
5. A market economy can adapt to change over time.
6. Consumer sovereignty is the idea that consumers' preferences determine what is produced.
7. An entrepreneur thrives in a market economy.
8. The three main economic systems are traditional, command, and market.
9. A modified private enterprise economy has some government intervention.
10. A nonprofit organization does not seek economic profit.
11. A corporation has limited liability.
12. Horizontal merger (same business), vertical merger (different production steps).
13. Advantages of a merger include economies of scale, increased market share, etc.
14. Economics helps understand how societies allocate resources.
15. On the production possibilities curve, on the curve means at potential; inside means not at potential.
16. Conspicuous consumption is buying goods to show wealth/status.
17. The American economy is a mixed (modified private enterprise) economy.
18. Consumers/businesses make decisions in a market economy; the government makes them in a command economy.

Answer:

1. land, labor, capital, entrepreneurship
2. what to produce, how to produce, for whom to produce
3. capital
4. command
5. adapt
6. Consumer sovereignty is the concept that consumers’ preferences and demands determine which goods and services are produced.
7. market
8. traditional, command, market
9. some
10. does not
11. limited
12. horizontal, vertical
13. An advantage of a merger is achieving economies of scale (or increased market power, reduced competition, etc.).
14. helps people understand how societies allocate scarce resources to satisfy unlimited wants.
15. at its potential, not at its potential
16. Conspicuous consumption is the spending of money on luxury goods and services to publicly display one’s wealth or social status.
17. mixed (or modified private enterprise)
18. Consumers and businesses, the government