Unit 4 Test (Economics)

Which of these BEST represents a capital investment for a company?

• advertising
• hiring new employees​​​​​​​
• downsizing factory staff
• buying new equipment

A computer programmer, bank teller, and construction worker are all examples of:

• technical resources
• capital resources
• natural resources
• human resources

What impact do incentives have on behavior?

• Consumers ignore incentives and make random decisions.
• Incentives encourage consumers to buy more expensive products.
• Incentives can encourage consumers to buy certain products over others.
• Incentives always lower the price of goods.

Maria goes on a shopping trip to get ready for her vacation. She loads her cart with a new purse for $12.00, a sun hat for $4.00, magazines for $6.00, and a beach towel for $4.00. When she gets to the register, she realizes she only has $20.00 in her pocket. Use the passage to answer the question. If Maria decides to purchase the sun hat, towel, and bathing suit, what is the opportunity cost of her purchase?

• new purse
• the magazines
• the sun hat
• the towel

According to the law of demand, what role do low prices serve for buyers?

• substitute
• reward
• supply
• penalty

How does scarcity affect customers?

• Limited money and resources force consumers to make choices.
• Unlimited wants and needs limit customers to small purchases.
• Limited time prevents customers from making decisions.
• It encourages strong economic growth and entrepreneurship

How does competition benefit consumers in a market economy?

• It forces consumers to buy fewer products.
• It leads to lower prices and more choices for consumers.
• It increases the prices of all goods.
• It discourages businesses from innovating.

Which of the following is a characteristic of a Command Economy?

• they have a surplus of resources
• it is government controlled
• citizens can open a business and set prices
• very limited government control

Which of these is an example of a monetary incentive?

• having fun walking a dog
• earning an allowance for doing chores
• learning a new skill by studying it
• making friends on a sports team

Which situation is more likely to occur in a Market Economy than a Command Economy?

• a citizen designs a new game and opens a store to sell it
• people line up for scarce products
• the government controls all aspects of business
• government sets prices on items that are sold