ECONOMICS FINAL EXAM QUESTIONS AND GRADED
ANSWERS, 100% GUARANTEE
Economics - the study of how people seek to satisfy their needs and wants by making
choices
Horizontal Merger - the combination of two or more firms competing in the same market
with the same good or service
Vertical Merger - the combination of two or more firms involved in different stages of
producing the same good or service
Shortage - a situation in which a good or service is unavailable
Scarcity - limited quantities of resources to meet unlimited wants
Factors of Production - land, labor, and capital; the three groups of resources that are used
to make all goods and services
Entrepreneur - ambitious leader who combines land, labor, and capital to create and
market new goods or services
Trade-Off - the alternative we sacrifice when we make a decision
Opportunity Cost - the most desirable alternative given up as the result of a decision
Human Capital - the skills and knowledge gained by a worker through education and
experience
, Physical Capital - all human-made goods that are used to produce other goods and
services; tools and buildings
Thinking at the Margin - deciding whether to do or use one additional unit of some
resource
Production Possibility Graph - a graph that shows alternative ways to use an economy's
resources
Production Possibility Frontier - the line on a production possibilities graph that shows the
maximum possible output for a specific economy
Adam Smith - classic economist that believed the market could regulate itself
Classical Economics - the idea that free markets can regulate themselves
Free Market - individuals and privately owned businesses own the factors of production
and therefore, make what they want and buy what they want
Command Economy - economic system in which the central government makes all of the
decisions on the production and consumption of goods and services
Mixed Economy - economic system that combines tradition and free market with limited
government involvement
Natural Monopoly - a market that runs most efficiently when one large firm supplies all of
the output
Perfect Competition - a market structure in which a large number of firms all produce the
same product
ANSWERS, 100% GUARANTEE
Economics - the study of how people seek to satisfy their needs and wants by making
choices
Horizontal Merger - the combination of two or more firms competing in the same market
with the same good or service
Vertical Merger - the combination of two or more firms involved in different stages of
producing the same good or service
Shortage - a situation in which a good or service is unavailable
Scarcity - limited quantities of resources to meet unlimited wants
Factors of Production - land, labor, and capital; the three groups of resources that are used
to make all goods and services
Entrepreneur - ambitious leader who combines land, labor, and capital to create and
market new goods or services
Trade-Off - the alternative we sacrifice when we make a decision
Opportunity Cost - the most desirable alternative given up as the result of a decision
Human Capital - the skills and knowledge gained by a worker through education and
experience
, Physical Capital - all human-made goods that are used to produce other goods and
services; tools and buildings
Thinking at the Margin - deciding whether to do or use one additional unit of some
resource
Production Possibility Graph - a graph that shows alternative ways to use an economy's
resources
Production Possibility Frontier - the line on a production possibilities graph that shows the
maximum possible output for a specific economy
Adam Smith - classic economist that believed the market could regulate itself
Classical Economics - the idea that free markets can regulate themselves
Free Market - individuals and privately owned businesses own the factors of production
and therefore, make what they want and buy what they want
Command Economy - economic system in which the central government makes all of the
decisions on the production and consumption of goods and services
Mixed Economy - economic system that combines tradition and free market with limited
government involvement
Natural Monopoly - a market that runs most efficiently when one large firm supplies all of
the output
Perfect Competition - a market structure in which a large number of firms all produce the
same product
