SEMESTER ECONOMICS

Competency PreTest

NAME ______

EPF 4 - The student will demonstrate knowledge that many factors affect income

  1. Match the following terms with their definitions. Use “?” if you don’t know

_____ Revenue

_____ Cost

_____ Profit

_____ Expenses

  1. The amount of money used to run or operate the company
  2. The amount of money used to buy products for resale or to construct products to sell
  3. The amount of money the company owners get to keep for themselves
  4. The amount of money a company brings in from the sale of its products and services
  1. Briefly describe the connection between the profit motive and the laws of supply

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  1. _____ Where “C” equals product cost, “E” equals company expenses, “R” equals revenue or income, and “P” equals net profit, which is the proper formula for calculating profit

  1. P = C + E - R
  2. P = C - E + R
  3. P = R - (C + E)
  4. None of the above
  5. Don’t Know

  1. Match the terms with their definitions. Use “?” if you don’t know.

_____ Standard of Living

_____ Productivity

_____ Costs of Production

_____ Human Capital

_____ Physical Capital

_____ Market Value

_____ Investment

_____ Economic Growth

  1. the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, a(n)______is a monetary asset purchased with the idea that the asset will provide income in the future or will be sold at a higher price for a profit
  2. A measure of worker efficiency such as one hundred units per hour. In economics, the term involves the creation of goods and services to produce wealth
  3. In economics, ______is determined by the sum of the value of the resources that went into making a product. The ______can include any of the factors ofproduction(including labor, capital, or land) and taxation.
  4. a factor of production (or input into the process of production), consisting of machinery, buildings, computers, and the like.
  5. the price at which an asset would trade in a competitive auction setting.
  6. the degree of wealth and material comfort available to a person or community.
  7. an increase in the amount of goods and services produced per person of the population over time.
  8. the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.
  1. _____ & _____ Which two items listed below have a direct impact on our standard of living

  1. Productivity
  2. Equilibrium
  3. Costs of Production
  4. Company Revenue
  5. Business Expenses
  6. Physical & Human Capital
  7. Don’t Know

  1. _____ A company’s investment in improved technology, physical capital, and human capital (employee training) combine to help grow the company’s . . . .

  1. Productivity
  2. Standard of Living
  3. Law of Supply
  4. Equilibrium
  5. Don’t Know

  1. _____ Lowering the cost to produce a product can improve a company’s ability to compete in the market place by giving it a competitive edge in the area of ______

  1. Product Placement
  2. Promotion
  3. Price
  4. Product design
  5. Don’t Know

  1. _____ Which of the items below will most improve a person’s income potential in the market place?

  1. Human Capital
  2. Physical Capital
  3. Personal Wealth
  4. Investment
  5. Don’t Know

  1. _____ Which of the items below determines the wage rate for specific occupations

  1. Productivity
  2. Human capital
  3. Standard of Living
  4. Supply & Demand
  5. Don’t Know

  1. Rank the occupations listed below in terms of their usual income potential from highest to lowest

  1. __
  2. __
  3. __
  4. __
  5. __

  1. Restaurant Waiter
  2. Aerospace engineer
  3. Professional Athlete
  4. Supreme Court Justice
  5. Nurse

(Continued on Next Page)

  1. What criteria did you use to determine your rankings in the question above? For example, education has to be one of the considerations, but what are three others?

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