Economics Unit Review

You vacuum the house, your sister cleans the bathroom, and your father folds the laundry. This is an example of:

• productive capacity

• division of labor

• scarcity

• opportunity cost

The grocery store normally gets 500 pounds of apples. This week it gets 1,000 pounds of apples. What is likely to happen next?

• people will buy fewer apples

• the price of apples will go up

• the price of apples will go down

How much sales tax does a poor person pay on a piece of candy compared to a rich person?

• the rich person pays more tax

• they both pay the same amount

• neither one pays anything

Many people in the United States

• pay for college out of savings

• live beyond their means

• save enough to stop working

People usually borrow money from banks to buy (check 2)

• a home

• furniture

• clothes

• a car

Saving money in the bank earns interest for your account. Why does the bank pay interest?

• because you cannot use your money for a long time

• because it is hard to get your money out of the bank

• because it is using your money when you do not

Companies in the U.S. and Canada often buy and sell things to one another. This is an example of

• voluntary trade

• supply and demand

• entrepreneurism

McDonalds sells hamburgers, while Nike sells shoes. This is an example of:

• specialization

• supply and demand

• opportunity cost

When prices are high, demand goes down. When prices are low, demand goes up. If there is a shortage of basketballs on the market, the price of basketballs

• should stay the same

• should go up

• should go down

The store has decided to raise the price of televisions. What do you think will happen next?

• more people will buy televisions at this store

• fewer people will sell televisions at this store

• fewer people will buy televisions from this store