WorksheetsEcon Semester Test
Total questions: 100
Worksheet time: 25hrs 0mins
Physical objects such as clothes or shoes are defined as
Goods
Needs
Wants
Services
Which of the following is an entrepreneur?
a lawyer for an insurance company who wins a medical malpractice suit
an advertising copy writer who writes an award-winning commercial
a computer repair shop owner who opens a second shop across town
a doctor who volunteers her services in the aftermath of a hurricane
Any human-made resource that is used to create other goods and/or services is
A service
An entrepreneur.
Capital
Labor
Why are individuals, companies, and governments required to constantly make choices about how to best utilize resources?
There is always a shortage of resources
There is always a scarcity of resources
They all have more needs than wants
They all have more wants than needs.
Natural resources that are used to make goods and services are considered
Equipment
Money
Labor
Land
An example of an opportunity cost would be
Not being able to afford a family trip because the family buys a computer
Buying a movie ticket
The price of gasoline for a family trip.
Buying a computer to help get better grades in school.
A phrase that refers to the trade-offs that nations face when choosing whether to produce more or less military or consumer goods is
Shortage or scarcity.
Physical capital
Guns or butter
Swords or plowshares
How are trade-offs and opportunity costs different?
The opportunity cost is the most desirable trade-off
A trade-off is the most expensive opportunity cost
A trade-off can be put on a decision-making grid, but an opportunity cost cannot
It’s more important to be aware of the trade-off when deciding something
What are the three factors of production?
Needs, wants, choices
Workers, management, entrepreneurs
Land, labor, capital
Human capital, physical capital, intellectual capital
A sales clerk represents which factor of production?
Entrepreneur
Capital
Labor
Land
Why is there scarcity even in an affluent country like the United States?
Entrepreneurs are scarce and companies need leaders
Resources are limited but wants are unlimited
Some people are poor while others are wealthy
Wants are limited but needs are unlimited.
Which statement best describes opportunity cost?
Opportunity cost is the value in dollars of a trade-off.
Opportunity cost is the best choice in a decision.
Opportunity cost is the best alternative decision.
Opportunity cost is all the alternatives not chosen in a decision.
A basketball coach is performing a cost/benefit analysis in order to determine if more hours of practice would help the team score more points. The coach's action is an example of
individual trade-offs.
opportunity cost.
marginal thinking.
marginal benefit.
The phrase "guns or butter" expresses the idea that
individuals, businesses, and governments all face trade-offs.
factor resources are limited.
government decisions involve opportunity cost.
government decisions involve trade-offs between military and domestic needs.
when consumers want more of a good service than producers are willing to make available at a particular price
Need
Want
Scarcity
Shortage
people who decide how to combine resources to create new goods and services
Entrepreneur
Labor
Human Capital
Factors of Production
something essential for survival such as food or medical care
Want
Goods
Services
Need
Something that we desire but that is not necessary for survival
Want
Goods
Services
Need
actions or activities that one person performs for another
Want
Goods
Services
Need
the study of how people seek to satisfy their needs and wants by making choices
Scarcity
Guns or Butter
Thinking at the Margin
Economics
Decision makers have to compare the opportunity costs and what they will sacrifice and what they will gain.
Guns or Butter
Trade-Off
Opportunity Cost
Cost/Benefit Analysis
Which of the following is one of the three basic economic questions?
What should be produced?
What goods and services should be produced?
What goods should be produced?
What services should be produced?
Which of the following is one of the three basic economic questions?
How should these goods and services be produced?
How should things be produced?
How should these goods be produced?
How should these services be produced?
Which of the following is one of the three basic economic questions?
Who consumes things?
Who consumes these goods?
Who consumes these services?
Who consumes these goods and services?
Which of the following is one of the economic goals?
Evaluation
Effectiveness
Efficiency
Economical
Which of the following is one of the economic goals?
Flexiblility
Freedom
Fairness
Factories
Which of the following is one of the economic goals?
Security
Safety
Scarcity
Self-Interest
Which of the following is one of the economic goals?
Genuine
Gradual
Growth
Globalization
Which of the following is one of the economic systems?
Traditional
Taxable
Technological
Tradable
Which of the following is one of the economic systems?
Free Rider
Free Market
Fiscal Policy
Free Trade
Which of the following is one of the economic systems?
Capital Market
Central Banking
Centrally Planned
Classical
Which of the following is one of the economic systems?
Macroeconomics
Microeconomics
Market Power
Mixed
Which of the following is an advantage of the FREE MARKET system?
Factor Markets
Factor Payments
Freedom of Choice
Free Trade
Which basic economic goal is most easily achieved in a traditional economy?
equity
innovation
growth
efficiency
Which of the following BEST identifies how the three basic economic questions are answered in the United States?
through the planning of government officials who manage the economy
through a system in which individuals exchange goods directly with each other
through the combined effect of the decisions of individuals in the marketplace
through decisions made by small groups, based on habit, custom, or ritual
How is a society’s economic system defined?
by how it answers the three basic economic questions
by the decisions it makes about who consumes goods and services
by the resources it uses to produce goods and services
by the trade-offs it accepts in order to produce goods and services
Self-Interest happens without any central planning or government intervention this self regulating mechanism is known as
Efficiency
Specialization
Incentives
The Invisible Hand
How were the Soviet Union and communist China similar?
Both suffered from severe economic problems as a result of central planning.
Both eventually became free market economies.
Both were more successful in developing a thriving agriculture than in developing thriving industry.
Both states turned away from communism and were able to avoid collapse.
What distinguishes an authoritarian government from a democratic one?
It respects individual rights.
It pursues capitalist economic policies.
It discourages a strong central government.
It requires strict obedience from its citizens
The structure of methods and principles a society uses to produce and distribute goods
Factor Payments
Economic System
Standard of living
Traditional Economy
The amount of money a business receives in excess of its expenses.
Factor Payments
Innovation
Profit
Safety Net
The process of bringing new methods, products, or ideas into use
Factor Payments
Innovation
Profit
Safety Net
Any arrangement that allows buyers and sellers to exchange things.
Market
Specialization
Free Market Economy
Household
The concentration of the productive efforts of individuals and businesses on a limited number of activities
Market
Specialization
Free Market Economy
Household
Person or group of people living in a single residence
Market
Specialization
Free Market Economy
Household
One's own personal gain
Firm
Factor Market
Product Market
Self-Interest
The hope of reward or fear of penalty that encourages a person to behave in a certain way.
Incentive
Competition
Consumer Sovereignty
Self-Interest
Struggle among producers for the dollars of consumers
Incentive
Competition
Consumer Sovereignty
Self-Interest
In economics, the concept of demand is defined as the desire to own something
that has not yet been manufactured or produced.
and a willingness to pay more than other consumers for it.
that a manufacturer is capable of producing.
combined with the ability to pay for it.
According to the law of demand, when the price of pizza goes up,
consumers will buy less pizza.
consumers will save more money.
pizza restaurants will stop making pizza.
pizza restaurants will make more money.
Juanita has noticed that the price of bagels has gone up. Because of this, she has decided to buy a less expensive yogurt every morning for her breakfast. This is an example of the
income effect.
law of demand.
substitution effect.
market demand schedule.
Ceteris paribus" means demand will change when price changes
no matter what other factors may influence the market.
if other market factors remain constant.
only if the supply also does not change.
only in the short-term.
The increasing age of the American population is an example of how
changing demographics can cause demand shifts.
the law of ceteris paribus works.
lack of substitutes can blunt demand shifts.
demand does not always change when prices change.
Which of the following is the best example of substitute for movie tickets?
Inferior goods
Jewelry
Takeout pizza
Rentals of on-demand programming
Which of the following is an example of inelastic demand?
Jason wants the most expensive cellphone. He decides to get a cheaper model.
Priya wants to go to the season-opening game. Tickets to another game cost less, but she still buys tickets for the opener.
Tianna wants to try out a new, expensive restaurant. She goes to another restaurant whose food is excellent and costs less.
Shawn wants to buy a house in one neighborhood. But after searching, he decides to buy a house elsewhere instead.
The law of supply declares which of the following?
Supply falls as price falls.
Supply increases as price falls.
Supply stays the same no matter how prices change.
Supply falls as prices increase.
Which of the following would be an example of a fixed cost on a farm?
Mortgage on the land
Costs of seed
Fuel to operate machinery
Charge for fertilizer for the growing season
Which of the following is a way that government can intervene to control prices?
Shortages
Surplus
Disequilibrium
Minimum Wage
Which of the following is a way that government can intervene to control prices?
Rent Control
Market Control
Regulations
Federal Commissions
Which of the following is a way that government can regulate supply?
Excise Taxes
Federal Subpoenas
Price increase
Price decrease
Which of the following is a way that government can regulate supply?
Input costs
Subsidies
Price increase
Price decrease
Which of the Following is an example of variable costs?
Mortgage
Machinery
Water Bill
Salary Workers
Which of the following is an example of Substitute Goods
Shoes and Shorts
Toothbrush and Deodorant
Phone and Phone case
Chick fil A and Slim Chicken
Which of the following is an example of Complementary Goods
Shoes and Shorts
Toothbrush and Deodorant
Phone and Phone case
Chick fil A and Slim Chicken
Business owned and managed by a single individual
Sole proprietorship
Business organization
Business license
zoning laws
Ownership structure of a company or firm
Sole proprietorship
Business organization
Business license
zoning laws
Authorization to operate a business issued by a local government
Sole proprietorship
Business organization
Business license
zoning laws
Laws in a city or town that designate certain areas, or zones, for residential and business use
Sole proprietorship
Business organization
Business license
zoning laws
Legal obligation to pay debts
liability
Fringe benefits
Partnership
General partnership
Payments to employees other than wages or salaries, such as paid vacations.
liability
Fringe benefits
Partnership
General partnership
Legal document that spells out each partners economic rights and responsibilities.
Limited partnership
Limited liability partnership
Articles of partnership
assets
The money and other valuables belonging to an individual or business
Limited partnership
Limited liability partnership
Articles of partnership
assets
The share of earnings given by a franchisee as payment to the franchiser
business franchise
royalties
Corporation
Stock
A legal entity or being owned by individual stockholders each of whom has limited liability for the firm’s debts.
business franchise
royalties
Corporation
Stock
A certificate of ownership in a corporation
business franchise
royalties
Corporation
Stock
Organization of workers that tries to improve working conditions, wages, and benefits for its members
glass ceiling
featherbedding
labor union
Negotiating labor contracts that keep unnecessary workers on the company payroll
glass ceiling
featherbedding
labor union
Unofficial barrier that sometimes prevents women and minorities from advancing to the top ranks of organizations that are dominated by white men
glass ceiling
featherbedding
labor union
Work that demands advanced skills and education
professional labor
Unskilled labor
semi skilled labor
skilled labor
Work that requires specialized abilities and training to do tasks such as operating complicated equipment
professional labor
Unskilled labor
semi skilled labor
skilled labor
Work that requires minimal specialized skills and education such as the operation of certain types of equipment
professional labor
Unskilled labor
semi skilled labor
skilled labor
Work that requires no specialized skills education or training
professional labor
Unskilled labor
semi skilled labor
skilled labor
A large corporation that produces and sells its goods and services in more than one country
Conglomerate
Multinational corporations
derived demand
productivity of labor
A business combination merging more than 3 businesses that produce unrelated products or services
Conglomerate
Multinational corporations
derived demand
productivity of labor
The combination of two or more firms competing in the same market with the same good or service
Dividends
Limited liability corporations
Horizontal merger
Vertical merger
Which statement about sole proprietorships is true?
Sole proprietorships can be owned by more than one person.
Sole proprietorships are the most common form of business organization in the United States
Sole proprietorships generate about 40 percent of all sales in the United States
Sole proprietorships do not have to pay employment taxes
Why is it easy to start a sole proprietorship?
Sole proprietors do not need to file a lot of paperwork to start a business.
Sole proprietors are not subject to zoning laws.
Sole proprietors do not have any legal obligations
Sole proprietors do not need to follow any government regulations.
Which is a disadvantage of sole proprietorships?
full control
few regulations
easy to start and end
limited access to resources
Which is an example of a sole proprietor having personal liability?
a veterinarian requiring that customers pay for an office visit on the day of the visit
a store owner having to pay back a business loan after going out of business
a bicycle mechanic purchasing some new tools
a caterer taking time off for a vacation
Which advantage of a sole proprietorship could also be a disadvantage?
A sole proprietor has full control.
A sole proprietor can easily start a business
A sole proprietor is the sole receiver of profit.
A sole proprietor has to follow relatively few regulations
Which of these is an advantage that general partners alone enjoy in a limited partnership?
control of business operations
limited liability
share of investment
share of profits
What risk do limited partners face that general partners do not?
complete dependence on business abilities of others
necessity of meeting rigid operational standards
need to report earnings from business as income
possibility of having personal assets used to meet business obligations
A publicly held corporation has
no legal identity beyond that of its owners.
many shareholders who can buy or sell its stock.
a few stockholders who are often family members
stockholders who rarely trade their shares of stock.
How do corporations raise capital?
by transferring funds from the owners to the investors
through grants from the board of directors
by taking out loans against the owners’ assets
by selling stocks and bonds
What happens to the stockholders when a corporation files for bankruptcy?
The stockholders must also file for bankruptcy.
The owners can force the board of directors to pay the debt
The owners can lose only the money they have invested
The owners can avoid paying the debt by forming a limited liability corporation
Which of the following is true about the structure of a corporation?
The stockholders elect the board of directors, who appoint a chief executive officer
The employees elect the board of directors, who appoint the chief executive officer of the corporation.
The chief executive officer appoints the board of directors, who make key decisions by majority vote
The employees elect managers who oversee the general operation of the corporation
A custodian would be described as what type of Labor?
Unskilled
Semi-skilled
Skilled
Professional
A doctor would be described as what type of Labor?
Unskilled
Semi-skilled
Skilled
Professional
In order to do business, what is one regulation that corporations have to follow?
They have to form limited liability corporations.
They have to have an advisory board that makes financial decisions
They have to sell stocks and bonds on the stock exchange
They have to file quarterly and annual reports with the SEC.
What does the board of directors in a corporation do?
work in the various departments of the corporation
run the corporation and oversee its operations
own the corporation
make all major decisions for the corporation
