Financial Literacy Test 1A 2023

Which term means the study of how people make decisions about how to handle limited resources?

• economics

• scarcity

• cost-benefit analysis

What does the idiom "there's no such thing as a free lunch" mean?

• scarce resources have other uses and opportunity costs

• consumers are irrational

• the marginal benefit is greater than the marginal cost

Which is an example of capital input?

• the hammer used by a carpenter

• the steel used in a car

• the risk taken by a business person

• the work done by a plumber

Which is true of a free market?

• The government interferes.

• The government plans production.

• The prices adjust to reconcile scarcity and desires.

Which means the quantity of a product that a producer wants to make at each possible price?

• supply

• demand

Which do NOT directly affect the demand curve?

(CHOOSE TWO!)

• cost of production

• number of producers

• consumer incomes

• consumer wants

If the price increase of good A increases the quantity demanded of good B, then good B is...

• a substitute good

• a complementary good

• an inferior good

What does real GDP measure?

• income adjusted for inflation

• income including non-market activities

• income including tax evasion

Which would increase aggregate demand? Which shows a shift curve out to the right?

• an increase in business confidence

• an increase in interest rates

• an increase in taxes

Which impacts aggregate supply?

• a change in the cost of a widely used factor of production

• a change in consumer confidence

• a change in net exports