Economics TEST Review Exam Practice
with Verified Solutions
1. Economics - ANS ✔study of wealth and scarcity (science of decision
making)
2. Explain the difference between a WANT and a NEED (provide examples of
each - ANS ✔Want=Non-Essential luxury; something you don't really need
(video games, cell phones, cars)
Need= something essential for survival (food, water, warmth, rest)
3. Law of Scarcity - ANS ✔People have unlimited wants but all resources are
limited (can't have everything we want)
4. What is a budget? - ANS ✔Estimate, often itemized, of expected income
and expense for a given period in the future.
5. Law of Demand - ANS ✔As long as everything else stays the same, as the
price of a good or service goes higher, people will demand less.
, 6. Law of Supply - ANS ✔As long as everything else stays the same, the higher
the price of a good or service is, people will want to produce more.
7. When supply goes up, price goes - ANS ✔Down
8. When supply goes down, price goes - ANS ✔Up
9. Demand goes down, price goes - ANS ✔down
10.Demand goes up, price goes - ANS ✔up
11.Money - ANS ✔Anything widely accepted in exchange for goods and
services
12.Inflation - ANS ✔A general, sustained upward movement of prices for
goods and services in the economy. Economists say inflation occurs when
"too much money is chasing too few good"
13.Where are traditional economies located? - ANS ✔Parts of Asia, Africa,
South America, Northern Canada
with Verified Solutions
1. Economics - ANS ✔study of wealth and scarcity (science of decision
making)
2. Explain the difference between a WANT and a NEED (provide examples of
each - ANS ✔Want=Non-Essential luxury; something you don't really need
(video games, cell phones, cars)
Need= something essential for survival (food, water, warmth, rest)
3. Law of Scarcity - ANS ✔People have unlimited wants but all resources are
limited (can't have everything we want)
4. What is a budget? - ANS ✔Estimate, often itemized, of expected income
and expense for a given period in the future.
5. Law of Demand - ANS ✔As long as everything else stays the same, as the
price of a good or service goes higher, people will demand less.
, 6. Law of Supply - ANS ✔As long as everything else stays the same, the higher
the price of a good or service is, people will want to produce more.
7. When supply goes up, price goes - ANS ✔Down
8. When supply goes down, price goes - ANS ✔Up
9. Demand goes down, price goes - ANS ✔down
10.Demand goes up, price goes - ANS ✔up
11.Money - ANS ✔Anything widely accepted in exchange for goods and
services
12.Inflation - ANS ✔A general, sustained upward movement of prices for
goods and services in the economy. Economists say inflation occurs when
"too much money is chasing too few good"
13.Where are traditional economies located? - ANS ✔Parts of Asia, Africa,
South America, Northern Canada
