Economics Pre-Quiz

The opportunity cost of a new city park is the

• cost of staff and maintenance for the park.

• increased congestion from traffic around the park.

• best alternative use of resources given up for the park.

• lack of personal incentive for people to take care of a public park.

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EPF.E.1

Which do economists consider to be a productive resource (factor of production)?

• Labor.

• Profit.

• Money.

• Interest.

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EPF.E.2

In every economic system, people must choose how to

• satisfy all of the wants of society.

• make the best use of scarce resources.

• create an equal distribution of income.

• save money to reduce the national debt.

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EPF.E.1

A small business would like to hire more workers. Each additional worker hired costs the business $100 a day. The additional revenue the business receives from having more workers is $150 per day for the first worker, $130 per day for the second worker, $110 per day for the third worker, and $90 for the fourth worker. How many workers in total should the business hire to maximize its profits?

• One worker.

• Two workers.

• Three workers.

• Four workers.

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EPF.E.1

EPF.E.2

The essential difference between a command economy and a market economy is that in a market economy

• shortages occur more often than surpluses.

• buyers and sellers determine resource allocation.

• central planning creates an effective incentive system for consumers and producers. 

• the prices of products and resources are largely determined by government regulation of business.

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EPF.E.1

EPF.E.2

Which is a basic economic question that must be answered by all economic systems?

• How will corporations be organized?

• How can markets be kept competitive?

• Which goods and services will be produced?

• Which form of central planning will the government use?

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EPF.E.1

EPF.E.2

Profits are equal to total

• revenue minus total cost.

• assets minus total liabilities.

• sales minus wages and salaries.

• sales minus taxes and depreciation.

If the government decides to increase the payroll taxes on the wages and salaries of workers, then there will most likely be:

• an increase in saving.

• an increase in investment.

• a decrease in unemployment.

• a decrease in consumption.

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EPF.E.1

A high school student buys a dinner at a restaurant. The restaurant offers a special price that takes 20 percent off the regular price of the dinner. In this exchange,

• the student and the restaurant benefit.

• the student benefits, but the restaurant does not.

• the restaurant benefits, but the student does not.

• neither the student nor the restaurant benefits.

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EPF.E.1

Some members of Congress want to increase the general level of tariffs. If this increase occurs, then we should expect

• a decrease in U.S. inflation.

• a decrease in U.S. import quotas.

• a decrease in imports into the U.S.

• an increase in U.S. exports to other nations.

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EPF.E.1