3Rd Nine Weeks Economics Exam

3rd Nine Weeks Economics Exam

1.  Any resources that are made by humans and used to create other goods and services are called

a. services c. capital

b. production d. labor

2.  The resources used to make all goods and services are the

a. production possibilities c. production trade-offs

b. factors of production d. opportunity costs

3.  The government of a country must make a decision between increasing military spending and subsidizing wheat farmers. This kind of decision is a

a.  guns or butter issue c. global trade-off

b.  decision at the margin d. basic economic decision

4.  Why are all goods and services scarce?

a.  some goods cost more than others

b.  all resources are scarce

c.  some things are needs and others are wants

d.  some people want to have more goods than others

5.  What is a factory building an example of?

a. human capital c. an economic trade-off

b. physical capital d. technology

6.  Which of the following is NOT characteristic of a centrally planned economy?

a.  The central government owns all land and capital

b.  The central government makes all economic decisions.

c.  Each collective or factory sets its own goals.

d.  Each person is assigned a job

7.  Which of the following is NOT a key economic question?

a.  What goods and services should be produced?

b.  How should these goods and services be produced?

c.  Who consumes these goods and services?

d.  How should it be ensured that goods and services are paid for?

8.  What is one of the most important advantages of a free market?

a. It can change rapidly. c. It is easy to regulate

b. It protects the less fortunate d. It encourages growth

9.  What incentive motivates a manufacturer to sell a product?

a.  Making profits on sales c. pleasing the consumer

b.  Putting others out of business d. popularity of the product

10.  In what kind of an economy does the government make all the decisions?

a.  Socialist c. Centrally planned

b.  Laissez-faire d. Free enterprise

11.  What is the function of an economic system?

a.  to make sure all people have equal access to goods

b.  to product and distribute goods and services

c.  to give all producers the same access to consumers

d.  to make sure people are paid for their labor

12.  When a consumer is able and willing to buy a good and service, he or she creates which of the following?

a. consumption c. elasticity

b. demand d. allocation

13.  What kind of system is the United States economy based on?

a. cause and effect c. market

b. centralized d. production

14.  What is a basic principle of the law of demand?

a.  The higher the price, the more people will want the good.

b.  Everyone has a limited income that they will spend.

c.  When a good’s price is lower, people will buy more of it.

d.  Services are of interest in the same way that goods are.

15.  Which of the following is a good that might not be bought when prices rise?

a. complement c. inferior good

b. substitute d. luxury

16.  What is a company’s total revenue?

a.  the price of a company’s goods

b.  the amount a company receives for selling its goods

c.  the amount of goods a company can expect to sell

d.  the amount of profit a company can expect to make

17.  When prices rise, which of the following happens to income?

a. It goes down c. It rises to meet prices.

b. It buys less. d. It is used to buy different things

18.  Which of the following goods would be likely to be bought in the same quantity even if it doubled in price?

a. shoes c. pencils

b. telephones d. computers

19. Which of the following is the best example of the law of supply?

a. A sandwich shop increases the number of sandwiches they supply every day

when the price is increased.

b. A food producer increases the number of acres of wheat he grows to supply a

milling company.

c. A catering company buys a new dishwasher to make their work easier.

d. A milling company builds a new factory to process flour to export.

20. When the selling price of a good goes up, what is the relationship to the quantity

supplied?

1. The cost of production goes down.
2. The profit made on each item goes down.
3. It becomes practical to produce more goods.
4. There is no relationship between the two.

21. Which of the following is a fixed cost for a store?

a. short-term workers c. advertising

b. rent d. inventory

22. When buyers will purchase exactly as much as sellers are willing to sell, what is the

condition that has been reached?

a. supply and demand c. equilibrium

b. excess demand d. price floor

23. Why did the U.S. government use rationing for some foods and consumer goods

during World War II?

a.  to guarantee each civilian a minimum standard of living in wartime

b.  to keep sellers from raising prices on necessary goods

c.  because the English government had also decided on rationing

d.  to earn more money to support the military

24. What is the name of the smallest amount that can legally be paid to most workers for

an hour of work?

a. equilibrium price c. price floor

b. supply cost d. minimum wage

25. Which of the following is an advantage of a sole proprietorship?

a. No one is responsible if it fails.

b. It is the least-regulated form of business organization.

c. It is an easy way to make a lot of money

d. It is easy to get financing to start one.

26. A joining of two or more businesses that are involved in different stages of

producing the same good or service is called which of the following?

a. vertical merger c. cooperative

b. horizontal merger d. conglomeration

27. Which of the following is a disadvantage of a sole proprietorship?

a. lack of permanence c. legal constraints

b. high taxes d. difficult to start up

28. What are the money and other valuables that belong to a corporation or partnership called?

a. liabilities c. ownership

b. assets d. liens

- 1 -