KSU Econ 1000 Final questions and
answers 100% correct
Opportunity Cost - correct answer ✔✔value of the next valuable cost. Every choice has a cost.
Sunk Cost - correct answer ✔✔A cost that has already been incurred and thus cannot be
recovered (sleeping in and skipping a class... win lose).
incentives - correct answer ✔✔a thing that motivates or encourages one to do something.
economic system - correct answer ✔✔system of production, resource allocation, exchange, and
distribution of goods and services in a society or a given geographic area.
Command - correct answer ✔✔group making decisions; bureaucratic; group of bureaucrats
making decisions; economic system in which the means of production are publicly owned and
economic activity is controlled by a central authority that assigns quantitative production goals
and allots raw materials to productive enterprises. (North Korea)
laissez-faire - correct answer ✔✔an economic system in which transactions between private
parties are free from government interference such as regulations, privileges, tariffs, and
subsidies
market - correct answer ✔✔economy in which decisions regarding investment, production, and
distribution are based on market determined supply and demand, and prices of goods and
services are determined in a free price system; prices and trade control allocation. (Singapore)
mixed - correct answer ✔✔An economy that combines elements of capitalism and socialism,
mixing some individual ownership and regulation. (USA)
, economic freedom of the world index - correct answer ✔✔an annual compilation of data
representing factors which make a country economically free; compendium of 42 government
policies affecting economic freedom based on objective data or independent surveys.
economic freedom - correct answer ✔✔individuals have economic freedom when property
they acquire without the use of force, fraud, or theft is protected from physical invasions by
others and they are free to use, exchange, or give their property as long as their actions do not
violate the identical rights of others. An index of economic freedom should measure the extent
to which rightly acquired property is protected and individuals are engaged in voluntary
transactions.
black market - correct answer ✔✔non-legal market
inferior good - correct answer ✔✔type of good whose demand declines when income rises. In
other words, demand of inferior goods is inversely related to the income of the consumer.
Description: For example, there are two commodities in the economy -- wheat flour and jowar
flour -- and consumers are consuming both.
normal good - correct answer ✔✔good for which an increase in income causes an increase in
demand, or a rightward shift in the demand curve. If demand increases as income increases, it is
a normal good or a good with a positive income elasticity of demand.
input - correct answer ✔✔resources or factors of production used in the production of a firm's
output
wealth increases and demand decreases - demand curve to the left (shift in demand) change in
quantity supply
specialization of labor - correct answer ✔✔think assembly line
production possibilities frontier - correct answer ✔✔total amount of output of a society
answers 100% correct
Opportunity Cost - correct answer ✔✔value of the next valuable cost. Every choice has a cost.
Sunk Cost - correct answer ✔✔A cost that has already been incurred and thus cannot be
recovered (sleeping in and skipping a class... win lose).
incentives - correct answer ✔✔a thing that motivates or encourages one to do something.
economic system - correct answer ✔✔system of production, resource allocation, exchange, and
distribution of goods and services in a society or a given geographic area.
Command - correct answer ✔✔group making decisions; bureaucratic; group of bureaucrats
making decisions; economic system in which the means of production are publicly owned and
economic activity is controlled by a central authority that assigns quantitative production goals
and allots raw materials to productive enterprises. (North Korea)
laissez-faire - correct answer ✔✔an economic system in which transactions between private
parties are free from government interference such as regulations, privileges, tariffs, and
subsidies
market - correct answer ✔✔economy in which decisions regarding investment, production, and
distribution are based on market determined supply and demand, and prices of goods and
services are determined in a free price system; prices and trade control allocation. (Singapore)
mixed - correct answer ✔✔An economy that combines elements of capitalism and socialism,
mixing some individual ownership and regulation. (USA)
, economic freedom of the world index - correct answer ✔✔an annual compilation of data
representing factors which make a country economically free; compendium of 42 government
policies affecting economic freedom based on objective data or independent surveys.
economic freedom - correct answer ✔✔individuals have economic freedom when property
they acquire without the use of force, fraud, or theft is protected from physical invasions by
others and they are free to use, exchange, or give their property as long as their actions do not
violate the identical rights of others. An index of economic freedom should measure the extent
to which rightly acquired property is protected and individuals are engaged in voluntary
transactions.
black market - correct answer ✔✔non-legal market
inferior good - correct answer ✔✔type of good whose demand declines when income rises. In
other words, demand of inferior goods is inversely related to the income of the consumer.
Description: For example, there are two commodities in the economy -- wheat flour and jowar
flour -- and consumers are consuming both.
normal good - correct answer ✔✔good for which an increase in income causes an increase in
demand, or a rightward shift in the demand curve. If demand increases as income increases, it is
a normal good or a good with a positive income elasticity of demand.
input - correct answer ✔✔resources or factors of production used in the production of a firm's
output
wealth increases and demand decreases - demand curve to the left (shift in demand) change in
quantity supply
specialization of labor - correct answer ✔✔think assembly line
production possibilities frontier - correct answer ✔✔total amount of output of a society
