Practice Test Document

What is the primary reason why households and societies face many decisions according to the practice test document?

• Resources are scarce.

• Goods and services are not scarce.

• Incomes fluctuate with business cycles.

• People, by nature, tend to disagree.

What is the opportunity cost of Jose receiving a 90 on the statistics exam instead of the economics exam, based on the provided strategies?

• 79 points on the economics exam.

• 17 points on the economics exam.

• 11 points on the economics exam.

• 90 points on the economics exam.

Which points could the economy potentially produce at if there is unemployment?

• Point G

• Point K

• Points F and J

• Points F, I, H, and J

What is the opportunity cost of this economy moving from point I to point H?

• 120 pillows.

• 120 blankets.

• 120 blankets and 120 pillows.

• 200 blankets.

Refer to Exhibit 2. Which graph depicts a technological breakthrough and/or an increase in one of the factors of production that affects only the production of good X?

According to the law of demand, an increase in the price of a good will:

• a. increase demand.

• b. decrease demand.

• c. increase quantity demanded.

• d. decrease quantity demanded.

According to the law of supply, a decrease in the price of ice cream would lead to:

• a. an increased supply of ice cream.

• b. a decreased supply of ice cream.

• c. a decrease in quantity supplied of ice cream.

• d. an increase in quantity supplied of ice cream.

Refer to Table 4. If the price were $4, what would be the market condition?

• a. a surplus of 15 units would exist, and price would tend to fall.

• b. a shortage of 25 units would exist, and price would tend to rise.

• c. a surplus of 25 units would exist, and price would tend to fall.

• d. a shortage of 40 units would exist, and price would tend to rise.

Refer to Table 24. If the price were $8, what would likely happen to the market for units?

• A shortage of 20 units would exist, and price would tend to rise.

• A surplus of 25 units would exist, and price would tend to fall.

• A shortage of 25 units would exist, and price would tend to rise.

• A surplus of 45 units would exist, and price would tend to fall.

How would a decrease in the price of the feed grains used to feed cattle affect the market for beef?

• Price increases, quantity increases.

• Price increases, quantity decreases.

• Price decreases, quantity increases.

• Price decreases, quantity decreases.