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WorksheetsThe Fundamentals of Economics
Total questions: 30
Worksheet time: 2hrs 51mins
Name
Class
Date
1.
The flow of goods and services would best be represented from ____ to ___
a)
Households to Factor Market
b)
Households to Product Market
c)
Product Market to Households
d)
Businesses to Product Market
2.
The money that households spend would best be represented from ____ to ___
a)
Households to Factor Market
b)
Households to Product Market
c)
Product Market to Households
d)
Businesses to Product Market
3.
The flow of land, labor, and capital would best be represented from ____ to ___
a)
Households to Factor Market
b)
Households to Product Market
c)
Product Market to Households
d)
Businesses to Product Market
4.
Alisa purchases her school supplies at Target. Frank likes to get his haircut at Great Clips. If the flow of school supplies from Target to Alisa is represented by an arrow from Box D to B of this circular-flow diagram, then the haircut that Frank got from Great Clips is represented by an arrow
a)
From Box A to Box D
b)
From Box B to Box D
c)
From Box C to Box B
d)
From Box D to Box B
5.
If businesses are sellers in the markets represented by Box C of this circular-flow diagram, then
a)
Box C must represent the markets for factors of production
b)
Box B must represent the markets for goods and services
c)
Firms are buyers in the market represented by Box D
d)
All of the above are correct
6.
You are the owner of a toy factory and Christmas time is right around in the corner. In order to handle the new demand for toys, you will need to hire more employees. If the revenue from your toys is represented by the flow of money from Box D to A, then the new workers coming to work for you is represented by an arrow
a)
From Box A to Box C
b)
From Box B to Box D
c)
From Box C to Box A
d)
From Box D to Box B
7.
Maria works for her uncle at his bike shop and gets paid an hourly wage. Her brother also works at the bike shop but gets paid on commission and does not receive an hourly wage. If Maria’s wage is represented by a flow of dollars from Box B to Box D, then her brother’s commission is represented by a flow of dollars from
a)
From Box D to Box B
b)
From Box B to Box D
c)
From Box A to Box C
d)
From Box C to Box A
8.
If the buyers of land, labor, and capital are represented by Box B of this circular-flow diagram, then
a)
Businesses are represented by Box C
b)
Businesses are represented by Box A
c)
Households are represented by Box A
d)
Households are represented by Box C
9.
Tim regularly buys gas at Holiday. Lindsey regularly pays people to change her oil for her. If the flow of gas from Holiday to Tim is represented by an arrow from Box C to Box B of this circular-flow diagram, then the money paid by Lindsey to the oil change company is represented by an arrow _______
a)
From box B to box C
b)
From box D to box B
c)
From box A to box C
d)
From box C to box B
10.
If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then
a)
The flow of factors of production is also part of what is represented by the inner loop
b)
The flow of income paid to households is part of what is represented by the inner loop
c)
The flow of revenue to firms is also part of what is represented by the inner loop
d)
Households must be sellers of output
11.
Nick works as an attorney for a corporation and is paid a salary in exchange for the legal services he performs. Ashley owns office buildings and rents her buildings to companies in exchange for rent payments. If Nick’s income is represented by a flow of dollars from Box D to Box B of this circular-flow diagram, then Ashley’s income is represented by a flow of dollars
a)
From box B to box D
b)
From box D to box B
c)
From box A to box D
d)
From box C to box B
12.
If households are sellers in the market represented by Box D of this circular-flow diagram, then
a)
Box D must represent the markets for factors of production
b)
Box C must represent the markets for goods and services
c)
Firms are buyers in the markets represented by box D
d)
All of the above are correct
13.
If the owners of land, labor, and capital are represented by box B of this circular-flow diagram, then
a)
Households are represented by box A
b)
Firms are represented by box C
c)
Firms are represented by box A
d)
Firms are sellers in box B
14.
The opportunity cost of increasing production of Good A from 0 units to 1 unit is the loss of ________ unit(s) of Good B.
a)
4
b)
3
c)
2
d)
1
15.
The opportunity cost of increasing production of Good A from 2 units to 3 unit is the loss of ________ unit(s) of Good B.
a)
8
b)
7
c)
4
d)
5
16.
Suppose massive new sources of oil and coal are found within the economy and there are major technological innovations in both sectors of the economy. Which curve in the diagram would represent the new production possibility curve?
a)
CC
b)
X
c)
BD
d)
AA
17.
Suppose that a new government comes into power that forbids the use of automated machinery and modern production techniques in all industries. Which curve in the diagram would represent the new production possibility curve?
a)
CC
b)
X
c)
BD
d)
AA
18.
Suppose there is a major technological breakthrough in ONLY the consumer goods industry, and the new technology is widely adopted. Which curve in the diagram would represent the new production possibilities curve?
a)
CC
b)
X
c)
BD
d)
AA
19.
If BB represents a country’s current production possibilities frontier, what can you say about a point like x?
a)
Maximum output
b)
Impossible
c)
Inefficient
d)
None of the above
20.
If BB represents a country’s current production possibility frontier, what can you say about a point like y?
a)
Maximum output
b)
Impossible
c)
Inefficient
d)
None of the above
21.
The law of increasing opportunity cost would do what to a PPF chart?
a)
Create a linear chart
b)
Create a bar chart
c)
Create a bowed out chart
d)
Depending on the change it would create a linear chart or bowed out chart
22.
A constant opportunity cost would do what to a PPF chart?
a)
Create a linear chart
b)
Create a bar chart
c)
Create a bowed out chart
d)
Depending on the change it would create a linear chart or bowed out chart
23.
Who has a comparative advantage in Dump Trucks?
a)
United States
b)
England
24.
Who has a comparative advantage in Electric Cars?
a)
United States
b)
England
25.
What are terms of trade that benefits both countries?
1 Electric Car for ____ Dump Trucks
1 Electric Car for ____ Dump Trucks
a)
Anything between 5 and 10
b)
Anything between 6 and 11
c)
Anything between 2 and 10
d)
Anything between 6 and 10
26.
Who has a comparative advantage in Pizzas?
a)
Russia
b)
China
27.
Who has a comparative advantage in Tacos?
a)
Russia
b)
China
28.
What are terms of trade that benefits both countries?
1 Pizza for ____ Tacos
1 Pizza for ____ Tacos
a)
Anything between 2 and 3
b)
Anything between 4 and 8
c)
Anything between 3 and 9
d)
Anything between 2 and 4
29.
Which of the following answers would not move a PPF chart outward?
a)
Government Regulations
b)
Specialization and Trade
c)
Increase in population
d)
Accumulation of capital
30.
Which of the following would cause a country to produce inside thier PPF chart?
a)
Specialization and Trade
b)
Workers going on strike
c)
Increase in population
d)
Accumulation of capital
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