Economics Final Exam Review Questions with All
Verified Solutions
Economics - Answer the study of how people seek to satisfy their needs and wants by making choices
Horizontal Merger - Answer the combination of two or more firms competing in the same market with
the same good or service
Vertical Merger - Answer the combination of two or more firms involved in different stages of producing
the same good or service
Shortage - Answer a situation in which a good or service is unavailable
Scarcity - Answer limited quantities of resources to meet unlimited wants
Factors of Production - Answer land, labor, and capital; the three groups of resources that are used to
make all goods and services
Entrepreneur - Answer ambitious leader who combines land, labor, and capital to create and market
new goods or services
Trade-Off - Answer the alternative we sacrifice when we make a decision
Opportunity Cost - Answer the most desirable alternative given up as the result of a decision
Human Capital - Answer the skills and knowledge gained by a worker through education and experience
Physical Capital - Answer all human-made goods that are used to produce other goods and services;
tools and buildings
Thinking at the Margin - Answer deciding whether to do or use one additional unit of some resource
, Production Possibility Graph - Answer a graph that shows alternative ways to use an economy's
resources
Production Possibility Frontier - Answer the line on a production possibilities graph that shows the
maximum possible output for a specific economy
Adam Smith - Answer classic economist that believed the market could regulate itself
Classical Economics - Answer the idea that free markets can regulate themselves
Free Market - Answer individuals and privately owned businesses own the factors of production and
therefore, make what they want and buy what they want
Command Economy - Answer economic system in which the central government makes all of the
decisions on the production and consumption of goods and services
Mixed Economy - Answer economic system that combines tradition and free market with limited
government involvement
Natural Monopoly - Answer a market that runs most efficiently when one large firm supplies all of the
output
Perfect Competition - Answer a market structure in which a large number of firms all produce the same
product
Monopolistic Competition - Answer a market structure in which many companies sell products that are
similar but not identical
Non-price Competition - Answer a way to attract customers through style, service, or location, but not a
lower price
Verified Solutions
Economics - Answer the study of how people seek to satisfy their needs and wants by making choices
Horizontal Merger - Answer the combination of two or more firms competing in the same market with
the same good or service
Vertical Merger - Answer the combination of two or more firms involved in different stages of producing
the same good or service
Shortage - Answer a situation in which a good or service is unavailable
Scarcity - Answer limited quantities of resources to meet unlimited wants
Factors of Production - Answer land, labor, and capital; the three groups of resources that are used to
make all goods and services
Entrepreneur - Answer ambitious leader who combines land, labor, and capital to create and market
new goods or services
Trade-Off - Answer the alternative we sacrifice when we make a decision
Opportunity Cost - Answer the most desirable alternative given up as the result of a decision
Human Capital - Answer the skills and knowledge gained by a worker through education and experience
Physical Capital - Answer all human-made goods that are used to produce other goods and services;
tools and buildings
Thinking at the Margin - Answer deciding whether to do or use one additional unit of some resource
, Production Possibility Graph - Answer a graph that shows alternative ways to use an economy's
resources
Production Possibility Frontier - Answer the line on a production possibilities graph that shows the
maximum possible output for a specific economy
Adam Smith - Answer classic economist that believed the market could regulate itself
Classical Economics - Answer the idea that free markets can regulate themselves
Free Market - Answer individuals and privately owned businesses own the factors of production and
therefore, make what they want and buy what they want
Command Economy - Answer economic system in which the central government makes all of the
decisions on the production and consumption of goods and services
Mixed Economy - Answer economic system that combines tradition and free market with limited
government involvement
Natural Monopoly - Answer a market that runs most efficiently when one large firm supplies all of the
output
Perfect Competition - Answer a market structure in which a large number of firms all produce the same
product
Monopolistic Competition - Answer a market structure in which many companies sell products that are
similar but not identical
Non-price Competition - Answer a way to attract customers through style, service, or location, but not a
lower price
