Name: ____________________________________ Pd ___ Date ___ / ___ / ___ Mr. Henry Economics Unit 1 Test –Economics – 45 Points Chapters 1-3 (Pages 2-79) Part I, II, and III. Vocabulary Review (Word Bank) – 16 points 3 Sections (Chapters 1, 2, and 3) Chapter 1 scarcity economics factors of production gross domestic product consumer good paradox of value human capital specialization economic interdependence trade-off opportunity cost economic model cost-benefit analysis free enterprise economy capitalism mixed economy socialism communism minimum wage fixed income Social Security inflation voluntary exchange profit motive consumer sovereignty interest double taxation merger income statement net income depreciation cash flow horizontal merger vertical merger conglomerate multinational nonprofit organization public utility Chapter 2 traditional economy command economy market economy market Chapter 3 (We did not have a Vocab Quiz on these words) sole proprietorship unlimited liability inventory limited life partnership general partnership limited partnership corporation charter stock stockholders dividend common stock preferred stock bond principal Part IV. Critical Thinking (Completion) – 6 points Review Scarcity, Production Possibilities Frontier, Sole Proprietor, Types of Economies Part V. Matching – 7 points Part VI. Subjective – 6 points Look over your study guide notes for the subjective questions. You will have these on your test! Part VII. Essay: You will have two of these essays – 10 points List & describe each of the 4 factors of production What is TINSTAAFL, where did TINSTAAFL originate, and cite two examples of TINSTAAFL Describe what Adam Smith meant by the Paradox of Value and cite examples Describe 3 advantages and 2 disadvantages to the sole proprietorship Describe each of the 5 reasons for a merger Define scarcity in your own words and how society determines how to use a scarce resource