VA CE.11 Economics Mock Test

The idea that we're unable to satisfy all out wants and needs because resources are limited is known as

• supply

• demand

• scarcity

What are the 3 basic questions of economics?

• What will be produced?

• How will it be produced?

• When will it get produced?

• For whom will it be produced?

The economies of most countries today include which of the following characteristics?

• Government determines prices & controls all property (Command)

• Individuals & businesses make decisions in the PRIVATE sector; government for the PUBLIC sector (Mixed)

• No government involvement in business, and the other factor in production is consumer demand (Free Market)

• Encouragement of monopolies by the government.

TRUE/FALSE: Traditional economies are based on custom & historical precedent.

• True

• False

Competition usually results in all of the following EXCEPT

• lower prices

• better quality

• greater consumer choice

• reduced supply

Answer explanation

Supply increases because there's multiple producers of the SAME good/service!

What are the 3 characteristics of the US economy?

• Prices are determiend by supply/demand.

• Competition is encouraged within the marketplace.

• Governments primarily choose what products are made.

• Markets are generally allowed to operate without interference from the government.

TRUE/FALSE: Prices is usually determined by the interaction of SUPPLY & DEMAND

• True

• False

When consumers are willing to purchase more goods/services than what is being produced what happens?

• prices increase

• prices go down

• consumers gain money

• businesses go out of businsess

Businesses most frequently participate in the circular flow by

• consuming products

• providing investment to expand

• providing public goods and services by using taxes

• buying resources and making products to sell

When demand is high, what happens to prices?

• Price increases

• Price decreases