SS7E1-3 Core Economic Concepts Test

In Nigeria, people can open their own businesses, choose their careers and job paths, and can purchase a wide array of consumer goods. However, the national government institutes tariffs on imported goods, has a significant share in the oil industry, and regulates much of the country's industry. Based on this description, Nigeria could BEST be categorized as a ___ economy.

• Command

• Market

• Traditional

• Mixed

Which question is MOST LIKELY a fundamental economic question?

• Who will pay the taxes?

• Who will educate the workers?

• Who will get the goods and services produced?

• Who will do the work to produce the goods and services?

In a command economy, how is it determined what goods and services will be produced?

• Businesses decide what to produce on the basis of market conditions.

• Consumers decide through their behavior in the marketplace.

• Central government planning decides what will be produced.

• Supply and demand control production and price.

Which statement BEST reflects the difference between tariffs and quotas?

• Tariffs set limits on imports, while quotas raise prices on exports.

• Tariffs set limits on exports, while quotas raise prices on imports.

• Tariffs raise prices on exports, while quotas set limits on exports.

• Tariffs raise prices on imports, while quotas set limits on imports.

Which of these is TRUE about specialization in an economy?

• One nation will sell its specialty to others ONLY if they don't compete.

• Nations stop using products from other nations to support their own economies.

• Nations agree to work together as a team to make it easier for them to manufacture expensive items.

• One nation will focus resources on its specialty, forcing it to buy other products from other nations.

An import quota is a

• tax on import quantities above the legal limit.

• way to increase tariff revenues for the exporting country.

• legal limit on the amount of a good that can be imported into a country.

• legal incentive for members of WTO to increase their exports of a good or service.

Which example might cause trade to be limited between countries?

• the lifting of an embargo

• tariff reduction on imports

• a quota on imports and exports

• decreasing safety standards on exports

In 1987, the United Nations General Assembly passed a resolution that prohibited countries from buying oil from South Africa in an effort to persuade the nation to end the racist policies of apartheid. This is an example of a(n)

• blockade.

• embargo.

• quota.

• tariff.

Entrepreneurs develop new goods and services to start a business. Why is entrepreneurship often difficult?

• There is a risk that the new business may fail.

• There are laws that restrict most new businesses.

• Motivation for profit may not be the best incentive.

• Healthy competition encourages higher quality products.

What do these factors MOST LIKELY represent?

• skills of citizens
• health of citizens
• education of citizens
• values of citizens

• human capital

• capital

• natural resources

• entrepreneurs