1. Which of these terms is the BEST synonym for the word "entrepreneur"?

A) / "business owner"
B) / "home owner"
C) / "employee"
D) / "student"

2. As one of the factors of production/productive resources,capitalcan be defined as

A) / the goods and services a business produces.
B) / the supply of labor needed to produce goods.
C) / the people that purchase goods and services.
D) / the equipment and factories needed to produce goods.

3. Land, labor, capital, and entrepreneurship are the

A) / basis of employment.
B) / results of production.
C) / factors of production.
D) / results of supply and demand.

4. Which type of cost occurs when an individual pays for a piano lesson instead of going to a movie?

A) / fixed cost
B) / marginal cost
C) / residual cost
D) / opportunity cost

5. Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr. Stevens decides to open his sporting goods store, what is the opportunity cost of this decision?

A) / the opportunity to rent it to another tenant
B) / the property tax he would pay on the building
C) / the opportunity he has to run his own business
D) / the profits he would make from his sporting goods store

6. The basic economic condition that exists when unlimited wants exceed limited productive resources is called

A) / capital.
B) / scarcity.
C) / hyper inflation.
D) / opportunity cost.

7.


The graph is a production possibilities chart. Which of these might cause the line to move to the right?

A) / higher labor costs
B) / an increase in prices
C) / shortage of required resources
D) / improved technology in whoopee cushion production

8.


The purpose of this production possibilities graph is to show

A) / how supply and demand determine price.
B) / whether the supply of goods is elastic or not.
C) / the number of workers required for a specific task.
D) / how limited resources can be used to produce a combination of items.

9.


The graph shows how many basketballs and how many whoopee cushions can be produced given a limited supply of resources. Such a graph is called a

A) / price graph.
B) / demand curve.
C) / supply curve.
D) / production possibilities graph.

10.

Marginal benefit:a gain from an increase or loss from a decrease in the consumption of a good or service.

"Marginal benefit" is MOST related to what economic concept?

A) / opportunity cost
B) / supply elasticity
C) / demand elasticity
D) / equilibrium price

11. A small company is trying to determine the best use of its resources in producing two different goods. What resource should they develop to investigate these options?

A) / marginal cost curve
B) / competitive norm curve
C) / supply and demand curve
D) / production possibilities curve

12.

Number of Workers / Total Costs / Marginal Costs / Total Revenue / Marginal Revenue / Total Profit
0 / $50.00 / --- / --- / --- / $ (50.00)
1 / $140.00 / $12.86 / $105.00 / $15.00 / $ (35.00)
2 / $230.00 / $6.92 / $300.00 / $15.00 / $70.00
3 / $320.00 / $5.00 / $570.00 / $15.00 / $250.00
4 / $410.00 / $3.75 / $930.00 / $15.00 / $520.00
5 / $500.00 / $3.21 / $1,3500.00 / $15.00 / $850.00
6 / $590.00 / $4.50 / $1,650.00 / $15.00 / $1,060.00
7 / $680.00 / $4.74 / $1,935.00 / $15.00 / $1,210.00
8 / $770.00 / $10.00 / $2,070.00 / $15.00 / $1,300.00
9 / $860.00 / $15.00 / $2,160.00 / $15.00 / $1,300.00
10 / $950.00 / $22.50 / $2,220.00 / $15.00 / $1,270.00
11 / $1,040.00 / --- / $2175.00 / $15.00 / $1,135.00


A company is trying to decide how many workers to hire. They want to maximize profits. What is the maximum number of workers the company can hire to maximize profits while not having marginal costs exceed marginal revenue?

A) / 8
B) / 9
C) / 10
D) / 11

13. Workers on an assembly line are an example of

A) / allocation.
B) / entrepreneurs.
C) / homogenization.
D) / specialization.

14. When an individual specializes to produce one good, and then acquires additional desired goods from other specialists,

A) / both parties gain as a result of voluntary exchange.
B) / both parties gain as a result of fraudulent exchange.
C) / neither party gains as specialization decreases efficiency.
D) / neither party gains as specialization decreases productivity.
15. The Gains from Trade
Output Before Specialization and Trade
U.S. / Japan / Total
Product A / 20,000 / 30,000 / 50,000
Product B / 500,000 / 30,000 / 530,000
Output After Specialization and Trade
U.S. / Japan / Total / Net Gain
Product A / 0 / 60,000 / 60,000 / 10,000
Product B / 800,000 / 0 / 800,000 / 270,000


What is the MOST LIKELY result of specialization in producing Products A and B?

A) / Japan stops producing and using Product B.
B) / The U.S. stops producing and using Product A.
C) / The increased output means the U.S. and Japan can trade excess units of Products A and B.
D) / Specialization means the U.S. will trade 800,000 units of Product B for 60,000 units of Product A.

16. In a command economy, how are the prices of goods and services determined?

A) / business owners
B) / the central government
C) / market forces of supply and demand
D) / independent agencies and independent regulators

17. In a market economy, prices are established by

A) / consumers and labor unions.
B) / decree of government agencies.
C) / the interaction of supply and demand.
D) / businesses which buy and sell the products.

18. Communism and socialism are usually found in what type of economic system?

A) / command
B) / traditional
C) / pure market
D) / mixed market

19. In this type of economic system, the production of goods and services is controlled solely by the concept of supply and demand, businesses are operated for profit, and the government is not involved.

A) / command
B) / communism
C) / market
D) / mixed

20. Why is the consumer considered "king" in a capitalist economy?

A) / consumers own the productive resources
B) / consumers contribute to the factor market
C) / consumers vote for elected government officals
D) / consumers determine what products will be produced

21. A government that operates a market economy MIGHT become involved in the economy

A) / to increase the profits of a specific company.
B) / to eliminate income inequality among its citizens.
C) / to make sure all products are produced the same way.
D) / to provide public goods and services to its citizens.

22. Which of these is MOST LIKELY a result of a high unemployment rate in the United States?

A) / increased revenues
B) / increased demand for consumer goods
C) / increased production of capital goods
D) / greater government expenditures for transfer payments

23. Investment in education, training, and skill development has been linked to

A) / declining job satisfaction.
B) / growing financial instability.
C) / increasing earnings for workers.
D) / decreasing political participation.

24. Increased education and training within a nation will most likely result in

A) / a decrease in entrepreneurship.
B) / a decrease in Gross Domestic Product (GDP).
C) / an increase in Gross Domestic Product (GDP).
D) / an increase in the presence of natural resources.

25. Bob would like to increase his earnings. The option MOST LIKELY to increase his earnings potential in the long-term is to

A) / spend money to renew current training.
B) / take a similar position with a different company.
C) / spend money for additional training and education.
D) / laterally transfer to a different job within his company.