Pretest Economics 1

What is the financial gain made in transactions? 

• Resources

• Profit

• Scarcity

• Gain

Answer explanation

Profit is the financial gain made in transactions. It represents the difference between the revenue earned from selling goods or services and the expenses incurred in producing or delivering them.

• 
  Name the economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and services. 

  
  

• Capitalism

• Socialism

• Traditional System

• Barter System

Answer explanation

In this system, economic activities are based on traditions and cultural norms that have been passed down through generations. The production methods, distribution, and consumption patterns are determined by long-standing customs and rituals rather than individual choices or market forces.

What is an economic or productive factor required to accomplish an activity? 

• Specialization

• Resources

• Traditional System

• Wage

Answer explanation

An economic or productive factor required to accomplish an activity is referred to as a resource. Resources can include various inputs such as land, labor, capital, and entrepreneurship, which are essential for the production of goods and services.

The payment made by an employer to an employee is called _____. 

• Profit

• Marginal

• Interest

• Wage

Answer explanation

The payment made by an employer to an employee is called "wage". This term specifically refers to the compensation given to an employee for their work or services rendered.

• 
  What are two goods that are bought and used together? 

• Monopolistic Competition

• Market System

• Complementary Goods

• Efficiency

Answer explanation

Complementary goods are goods that are bought and used together because they enhance the value or utility of each other.

The legal entity owned by individual stockholders is termed as _______. 

• Capital

• Free Enterprise

• Specialization

• Corporation

Answer explanation

A corporation is a legal entity owned by individual stockholders. This means that the ownership of the corporation is divided among multiple individuals who hold shares of stock.

The desire to own something and the ability to pay for it called __________. 

• Demand

• Allocation

• Capital

• Opportunity Cost

Answer explanation

The ability to pay for it indicates the willingness and purchasing power of the individual. Therefore, the correct answer is demand, as it encompasses both the desire and the ability to pay for a product or service.

The measure used to determine how consumers react to a change in price is termed as _______.  

• Elasticity

• Marginal

• Equilibrium Price

• Scarcity

Answer explanation

Elasticity is the measure used to determine how consumers react to a change in price. It measures the responsiveness of demand to changes in price. If demand is elastic, a small change in price will result in a large change in quantity demanded

The point at which the quantity demanded and the quantity supplied are equal is called ________. 

• Elasticity

• Efficiency

• Equilibrium Price

• Production Possibilities

Answer explanation

The equilibrium price is the price at which the quantity demanded and the quantity supplied in a market are equal. It represents a balance between buyers and sellers, where the market clears and there is no excess supply or demand.

What is the study of economic behavior and decision makings of small units, such as individuals, families, and businesses called?

• Macroeconomics

• Microeconomics

• Economics

• Social Sciences

Answer explanation

Microeconomics is the study of economic behavior and decision-making of small units, such as individuals, families, and businesses. It focuses on analyzing how these units make choices regarding the allocation of resources and the impacts of these choices on prices, production, and consumption.