MI Open-Book 4th Social Studies - Ch.2 Test

Which term refers to technology/machines doing the jobs that people once did, leading to unemployment?

• Research
• Development
• Automation
• Aviation

How does specialization and division of labor increase productivity?

• Products that consumers love are special, so they will work hard, or labor, to get them.
• When workers specialize in one job their overall productivity increases and one person isn’t responsible for everything, raising productivity.
• Dividing up the workload makes it harder for workers to do their jobs and get anything done.
• None of these are correct.

How does a market economy work?

• The government owns and controls all business, and so consumers can only buy what their government makes or allows.
• Supply and demand determine prices, and competition makes businesses use different strategies to outperform their rivals.
• There is a circular flow of money between consumers/employees and businesses as each sector of the economy feeds into another.
• Only B and C are correct.

How do changes in the U.S. economy impact levels of employment?

• Changes in the U.S. economy do not impact levels of employment.
• Changes in supply, incentives, and productivity impact levels of employment the most.
• Changes in technology, demand for natural resources, and competition can lead to growth or loss in the economy causing more people to become employed or unemployed.
• None of the above are correct.

How does global competition affect the national economy?

• American businesses have to compete with those from other countries, which can result in some doing well and making money, and some struggling and failing.
• American businesses do not compete with those in other countries, so they aren’t affected by them at all.

What is “Economics?”

• The study of how individuals and societies use resources to produce goods and services
• An activity that a business or person trades for payment
• Something offered by a producer that makes consumers more likely to purchase what they are selling
• The breaking down of the production of a good into many small jobs.

Which is an example of a negative incentive?

• A coupon for $2 off the price of a burger
• Late fees for forgetting to return your library books on-time

What is scarcity?

• When something is scary
• When there isn’t enough of something
• When there is a lot of something
• All of the above

What are the characteristics of a market economy?

• The consumer drives many economic decisions.
• Almost all businesses are privately owned by individuals or corporations, not the government, so they are free to make choices that follow the law.
• The government owns and controls all business, and consumers do not have many choices for what to buy.
• Only A and B are correct.

Which gives a correct example of circular flow?

• Workers get money without working, and don’t spend their money.
• Workers sell their labor to a company that pays them, then the workers use the money to buy goods and services.
• Workers pay companies to work for them.