DECA Economics Cluster Exam| 70 QUESTIONS WITH COMPLETE SOLUTIONS

Economics Correct Answer: The social science that examines how societies use scarce resources to meet people's needs and wants Free Enterprise System/Capitalist System Correct Answer: People are free to own and control businesses; U.S. is a free enterprise economy Market Economy Correct Answer: Decisions about what to produce, how, and for whom are decided by individuals acting in their own self-interest; individuals own and control the society's resources; Capitalist system with free markets Command Economy Correct Answer: Decisions about what, how and for whom are decided by a central government; controlled economy; government owns resources; consumers have no say about the economic decisions Traditional Economy Correct Answer: Decisions about what, how and for whom are based on long-standing customs and beliefs of the society; people are self-sufficient; limited technological advancement Mixed Economy Correct Answer: Combination of command and market; free market with some government control; most countries today are mixed with varying degrees of command and market Scarcity Correct Answer: Unlimited needs and wants; limited resources; this is the problem that causes economic systems to develop Needs Correct Answer: Goods and services that are necessary for people to survive Wants Correct Answer: Goods and services people desire that are not necessary Goods Correct Answer: Physical objects (tangible) that are produced for consumers Services Correct Answer: Actions that are performed for consumers (intangible) Resources Correct Answer: Anything that is useful in the process of achieving goals or solving problems; Individual resources (money, time, skills, personal energy, tools, community agencies) Societies resources (natural resources, power, communication and transportation systems, factories and equipment, productive workers) Opportunity Cost Correct Answer: The value of the best alternative given up; every time you buy a good or service, you are giving up something else