Fundamentals Test 1 Remediation

The economy of Country A is defined by the private ownership of the resources of production. Although products and prices are based on market factors, the government intervenes as a regulator to ban harmful products and set a minimum wage. Country A is an example of a _______ economy.

• market economic system
• command economic system
• traditional economic system
• mixed economic system

In which economic system do consumers have the power to decide what goods and services are produced through their purchasing choices?

• command system

• traditional system

• market system

• controlled system

Aria is setting up a new bakery. When discussing factors of production, what is an example of physical capital?

• Pizza

• Oven

• Sun

• Pepperoni

According to the economic theory of scarcity, what must individuals do due to limited resources?

• increase savings

• seek employment

• make decisions

• reduce consumption

What is the primary motivation for entrepreneurs to engage in business ventures in a market economy?

• Reducing operational costs.

• Generating profit.

• Expanding their network.

• Improving employee satisfaction.

Which is the BEST definition of marginal benefit?

• the rise in the average price of all the goods and services in an economy

• the trading of one good or service for another without the use of money

• the value of what is given up when a choice is made between one alternative and another

• the additional gain from producing or consuming one more unit of something

At Aria's company, which of the following is considered a non-monetary incentive?

• holiday bonus

• paid vacations

• tuition reimbursement program

• flexible work hours

For a business to make a profit, marginal benefits must be which of the following?

• less than fixed costs

• greater than marginal costs

• equal to variable costs

• separate from labor costs

Which type of economic system aims to minimize income disparity by ensuring equitable resource allocation?

• market capitalism

• traditional

• command

• mixed

To construct a new office building, Skyline Corp. employs 300 engineers and 60 supervisors. Skyline Corp. represents

• land

• labor

• capital

• entrepreneurship