Economics Principles and Practice
Name: ______Date: ______Period: ______
Economics – Principles and practice
Unit 1 Test
Matching: Match the descriptions with the correct term.
a. Traditional Economyd. inflation
b. United Statese. Command Economy
c. Capitalism
_____ 1. A rise in the general level of prices.
_____ 2. A system in which the factors of production are owned by private citizens.
_____ 3. An economic system in which a central authority makes economic decision
_____ 4. An economic system in which ritual, habit and custom dictate must economic and social behavior
_____ 5. An example of a market economy is ______.
Multiple Choice: Choose the letter of the correct answer.
_____ 6. Economic products designed to satisfy people’s wants and needs are called
a. Capitalgooodsc. Trade goods
b. Consumer goodsd. Surplus
_____ 7. Haircuts, repairs to home appliances, and entertainment are examples of
a. Goodsc. Services
b. Currencyd. Capital
_____ 8. ______arises because society does not have enough resources to produce all the things people would like to have.
a. Opportunity Cost
b. Scarcity
c. Economics
d. Consumerism
_____ 9. ______is the sum of the skills, abilities, health and motivation to people
a. Gross Domestic Product
b. Cost – benefit analysis
c. Financial capital
d. Human capital.
_____ 10. Land, capital, labor and entrepreneurs are considered ______.
a. Circular flow of economics
b. Factors of production
c. Productions Possibility Frontier
d. Goods
Multiple Choice: Choose the letter of the correct answer.
_____ 11. People who use goods and services to satisfy their wants and needs are called__.
a. producersc. labor
b. scarcityd. consumers
_____ 12. The dollar value of all final goods and services and the most comprehensive measure of a country’s total production output is ______.
a. gross domestic product
b. stand of living
c. cost benefit analysis
d. financial capital
_____ 13. A popular model used to illustrate the concept of opportunity cost is the
a. practice of valuec. production possibilities frontier
b. entrepreneurshipd. factors of production
_____ 14. An economy at its production possibility frontier is operating
a. without division of laborc. as a free enterprise system
b. at full potential.d. with slow economic growth
_____ 15. A country that can produce the most of a product has a(n)
a. absolute advantage
b. protective tariff
c. revenue tariff
d. dumping
Multiple Choice: Choose the letter of the correct answer.
_____ 16. A country that can produce the same product as another country, but relatively more efficiently has a
a. absolute advantage
b. protective tariff
c. comparative advantage
d. revenue tariff
_____ 17. A ______protects less – efficient domestic industries.
a. protective tariff.
b. revenue tariff.
c. import.
d. export
_____ 18. ______are goods and services that one country buys from other countries
a. protective tariffc. revenue tariff
b. importd. export
_____ 19. ______are goods and services that on country produces and then sells to other nations
a. protective tariffc. revenue tariff
b. importd. export
_____ 20. An advantage of socialism would be
- a marketplace governed by supply and demand
- flexibility in day to day changes
- equitable distributions of benefits
- low taxes
_____ 21. In 1917, the existing government of Russia was overthrown by ______
a. Vladimir Leninc. Joseph Stalin
b. KarlMarxxd. Michael Gorbachevex
______22. Which of the following is characteristic of a traditional economy?
a. Communities tend to be fast-growing.
b. They are usually based on light industrial production.
c. They have a high standard of living.
d. Children tend to have the same jobs as their parents did.
______23.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.
______24. 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.
______25. An efficient economy is one that
a.has very few people who do not work for a living.
b. makes the best use of all its goods and services.
c.uses its resources to make the most goods and services.
d.makes the least costly use of its resources.
______26. 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.
______27. What is the struggle among various producers for the consumer’s business called?
a. socialism c. incentive
b. competition d. self-regulation
______28. Any resources that are made by humans and used to create other goods and services are called
a.servicesc.capital.
b.productiond.labor.
______29. 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
______30. How could the Chinese economy be characterized?
a. free market c. mixed, but on the side of centrally planned
b. centrally planned d. mixed, but on the side of free market
______31. How would the economy of Canada be likely to be characterized?
a. free market c. mixed, but on the side of centrally planned
b. centrally planned d. mixed, but on the side of free market