Name: 
 

Chapter #1 Intro to Biz StudyGuide


Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
 

 1. 
In the U.S., you can own anything you want and decide what you want to do with it, as long as it does not violate the law. This describes the principle of
a.
competition.
b.
scarcity.
c.
the right of private property.
d.
the command economy.
 

 2. 
Which of the following is an economic need?
a.
concert tickets
b.
a new television
c.
a loaded SUV
d.
water
 

 3. 
Goods
a.
must be provided to you at the time you want to consume them.
b.
are things you can see and touch.
c.
are things you purchase only after your basic needs are met.
d.
have no physical characteristics.
 

 4. 
In every nation on Earth,
a.
economic resources are owned and controlled by the government.
b.
workers have the ability to produce the same goods and services.
c.
individuals have the same wants and needs.
d.
people must deal with the problem of scarcity.
 

 5. 
The largest producer of goods and services in the world is
a.
Russia.
b.
the United States.
c.
Japan.
d.
China.
 

 6. 
Generally, as the price of a product increases,
a.
demand will increase.
b.
consumers will be willing to purchase larger quantities of the product.
c.
the supply curve will slope downward.
d.
businesses will be willing to supply larger quantities of the product.
 

 7. 
Who owns the economic resources in a market economy?
a.
business people and entrepreneurs but not consumers
b.
the tribal elders
c.
the government
d.
the people of the country
 

 8. 
Jonah had $25 to spend. He decided to buy a new shirt instead of going to the amusement park with his friends. Jonah has
a.
made a poor economic decision.
b.
made an economic tradeoff.
c.
purchased a service.
d.
ignored the concept of scarcity.
 

 9. 
Which of the following is probably a competitor to Mary’s CD Shop?
a.
Donna’s Donut Hut
b.
Al’s Garage
c.
B Flat Records and Tapes
d.
Food Clown grocery store
 

 10. 
Which of the following is NOT an especially important principle of the U.S. economic system?
a.
freedom of choice
b.
profit
c.
private property
d.
tradition
 

 11. 
Which type of economy is usually centered mainly on meeting people’s basic needs?
a.
mixed economy
b.
market economy
c.
traditional economy
d.
command economy
 

 12. 
What is the final step of the decision-making process?
a.
make a decision
b.
define the problem
c.
review your decision
d.
act on your choice
 

 13. 
If everybody had an unlimited supply of economic resources, which of the following would not exist?
a.
capitalism
b.
scarcity
c.
needs
d.
wants
 

 14. 
What is the first step in the decision-making process?
a.
define the problem
b.
identify the choices
c.
evaluate the choices
d.
act on your choice
 

 15. 
Another name for the economic system in the United States is
a.
free enterprise.
b.
capitalism.
c.
private enterprise.
d.
all of the above
 

 16. 
People producing goods and services are called
a.
capital resources.
b.
limited resources.
c.
natural resources.
d.
human resources.
 

 17. 
Which of the following scenarios will probably cause prices to drop?
a.
A big snowstorm is approaching, and the only hardware store in town has just a few snow shovels left in stock.
b.
Many companies begin producing a product in relatively high demand.
c.
Half of the world’s diamond mines shut down production.
d.
A new snack food is very popular, and only one company produces it.
 

 18. 
The government of Erewhon owns and controls all economic resources and decides how those resources will be used. The government even assigns people specific jobs and careers. Erewhon uses which type of economic system?
a.
command economy
b.
market economy
c.
laissez-faire economy
d.
traditional economy
 

 19. 
All nations must decide
a.
which goods and services to produce.
b.
which wants and needs are most critical.
c.
what combination of resources will best suit its circumstances.
d.
all of the above
 

 20. 
The rivalry among businesses to sell their goods and services is known as
a.
capitalism.
b.
competition.
c.
entrepreneurship.
d.
cornering the market.
 

Matching
Match the vocabulary terms to their respective definition.
 
 
a.
services
e.
mixed
b.
competitors
f.
supply
c.
entrepreneurs
g.
profit
d.
scarcity
h.
demand
 

 21. 

 The quantity of a good or service that consumers are willing and able to buy.
 

 22. 

 Means not having enough resources to satisfy every need. 
 

 23. 

 A risk taker who uses resources in a new way to create a new product or service.
 

 24. 

 Intangible things that you purchase.
 

 25. 

 An economy that combines elements of the command and market economy.
 

 26. 

 This curve illustrates the relationship between the price of a product and the quantity businesses will produce. 
 

 27. 

 Businesses offering very similar products to the same customers.
 

 28. 

 The money left over from sales after all the costs of operating a businesses have been paid.
 

True/False
Indicate whether the sentence or statement is true or false.
 

 29. 
Things that are required in order to live are known as wants.
 

 30. 
Goods and services are purchased by businesses as well as by individuals.
 

 31. 
Generally, a lack of competition will result in lower prices for goods and services.
 

 32. 
The basic economic problem results from not having enough resources to satisfy every need.
 

 33. 
A person who buys and uses goods and services is called a consumer.
 

 34. 
Communism refers to the private ownership of resources by individuals, rather than by the government.
 

 35. 
Buildings, equipment, and supplies are examples of natural resources.
 

 36. 
The final step in the decision-making process is to select the best choice from among the alternatives.
 

 37. 
Although all nations differ in the type and amount of economic resources they have, they all have the same economic needs.
 

 38. 
All economic resources have a limited supply.
 



 
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