WorksheetsECONOMIC CTA TEST
Total questions: 85
Worksheet time: 43mins
_________ is the study of how people seek to satisfy their needs and want by making choices
Human capital
Guns or Butter
Economics
Shortage
__________is the knowledge and skills a worker gains through education and experience
Trade-offs
Need
Services
Human capital
List the three factors of production
food, clothes, water
land, water, oil
capital, oil, machinery
land, labor, capital
Human-made objects used to create other goods and services are called_________?
Thinking at the margin
Capital
Cost
Effienciency
A__________occurs when producers will not or can not offer goods and services at the current prices
Shortage
Scarcity
Entrepreneur
Need
When there are limited quantities of resources to meet unlimited wants it is called_________?
Services
Factors of Production
Opportunity Cost
Scarcity
_______are ambitious leaders who decide how to combine land, labor, and capital resources to create new goods and services
Underutilization
Entrepreneurs
Law of increasing costs
Want
________are physical objects such as shirts and shoes
Goods
Trade-offs
Land
Scarcity
_______are actions or activities that one person performs for another
Shortage
Cost
Production Possibilities Frontier
Services
Air, food, or shelter are examples of a ________
Land
Factors of production
Capital
Labor
A________is a market-based economic system in which the government plays a limited role
Household
Socialism
Mixed economies
Private property
Most people feel the government should provide some kind of _______, to protect people experiencing unfavorable economic times.
Collective
Mixed economies
Market economy
Safety Net
The________is the level of economic prosperity
Firm
Profit
Standard of living
Self-Interest
A______is a person or group of people living in the same residence?
Household
Safety Net
Communism
Private Property
_____is the financial gain made in a transaction?
Mixed economies
Market economy
Self-interest
Profit
A______ is an arrangement that allows buyers and sellers to exchange things?
Socialism
Communism
Market
Laissez faire
______is a social and political philosophy based on the belief the democratic means should be used to distribute wealth evenly throughout a society?
Authoritarian
Self-interest
Safety Net
Socialism
_____is a characterized by a centrally planned economy with all economic power resting in the hands of the central government
Household
Competition
Communism
Invisible hand
_____is an attitude the government should not interfere in the market place?
Communism
Laissez faire
Self-interest
Invisible hand
______is property owned by individuals or, companies, not the government
Profit
Firm
Household
Private Property
_____is the rivalry among sellers to attract customers while lowering cost?
microeconomics
free contract
competition
welfare
_______is the force that encourages people and organizations to improve their material well being?
profit motive
gross domestic product(GDP)
interest group
public disclosure laws
The______is the income level below that which is needed to support families or households?
public interest
voluntary exchange
free rider
poverty threshold
______is government aid to the poor
competition
welfare
profit motive
macroeconomics
A_______is a private organization that tries to persuade public officials to act or vote according to the interest group's interest?
work ethic
legal equality
interest group
free contract
_____is the study of the behavior and decision making of the entire economies?
macroeconomies
microeconomies
In-kind benefits
public disclosure laws
_____is the study of the economic behavior and decision making of small units, such as individual families, and businesses?
welfare
macroeconomics
open opportunity
microeconomics
_____require companies to give consumers important information about their products?
private property rights
public disclosure laws
work ethic
public sector
_______is the total value of all final goods and services produced in an economy?
business cycle
public goods
gross domestic product (GDP)
microeconomics
A_______is someone who would choose not to pay for certain goods or services, but would get the benefits anyway if it were a public good?
public good
free rider
profit motive
public interest
The desire to own something and the ability to pay.
Elastic
Income effect
Demand curve
Demand
Consumers buy more of a good when its price decreases and less when its price increases.
Elasticity of Demand
Law of Demand
Demand curve
Demand
When consumers react to an increase in a goods price by consuming less of that good and more of the other goods.
Inferior good
Normal good
Substitution effect
Total revenue
Two good that consumers demand less of when their incomes increases.
Inferior good
Normal good
Complements
Law of Demand
A good that consumers demand less of when their incomes increases.
Inelastic
Unitary elastic
Normal good
Inferior good
Describes demand whose elasticity is elasticity is exactly equal to 1.
Unitary elastic
Elasticity of Demand
Demand schedule
Elastic
A graphic representation of a demand schedule.
Law of Demand
Ceteris Paribus
Demand Curve
Market Demand Schedule
The total amount of money a firm receives by selling goods or services
Market Demand Schedule
Inelastic
Ceteris Paribus
Total revenue
Goods used in place of one another.
Substitutes
Inferior good
Substitution effect
Demand
Describes demand that are very/or not very sensitive to change in price
Market Demand Schedule; Demand Schedule
Normal good: Inferior good
Demand Curve: Demand
Inelastic; Elastic
An example of a shortage is limited amounts of
water available for irrigating a crop because it is used for other crops
labor available because the workers have other jobs
food available because the trucks carrying it are on strike
food available because few people want to buy it
All of the following are types of decisions that can be made at the margin EXCEPT
whether to grow beans or corn on a large farm
whether or not to hire 100 new workers
whether to leave early in the morning or late in the day for a trip
whether or not to go on a vacation
The law of increasing costs means that when an economy increases the production of one item
the opportunity cost goes up
the actual cost of making the item goes down
the actual cost goes up but the opportunity cost goes down
the production cost will increase also
A nation's automakers install new robotic machinery to build cars. Now, cars take only a day to make, and the factories can produce many more cars than before. This is an example of growth caused by
land and natural resources
human capital
technology
production possibility curves
Which of the following is a "guns or butter" decision?
a man must decide whether to install an alarm system in his house or buy new furniture for the living room
a woman has to decide whether to replace her old car with a new sports car or a family sedan
a country must decide whether to use its steel to build new fighter jets or new sports cars
a school has to decide whether to build a new gym or renovate the auditorium
What can a decision-making grid do?
tell you the right course of action
show you every possible consequence of your decision
help you determine some of the opportunity costs for your decision
show you every possible benefit of your decision
Which of the following lists would an economist consider to be land?
factories, office buildings, assembly lines, workers
farm fields, tractors, pesticides, fertilizers
dams, bridges, rock quarries, oil wells
iron ore, natural gas, fertile soil, water
The community of Desertville traditionally produces a large number of tires and a small amount of kiwi fruit. Kiwis are become increasingly popular, and Desertville has decided to expand kiwi cultivation and decrease tire manufacturing. According to the law of increasing costs,
the cost of producing tires well decrease while the cost of producing kiwis will increase
the cost of producing kiwis will increase
the cost of producing tires will decrease
the cost of producing kiwis will decrease while the cost of producing tires will increase
Which of the following is NOT shown on a production possibilities curve?
all of the goods and services an economy has the ability to produce
the efficiency of an economy
whether an economy has grown or shrunk
the opportunity cost of a decision to produce more of one good or service
A company that makes baseball caps is underutilizing its resources. What does this mean
the company is running more efficiently than its competitors
the company is paying its employees less than it should be
the company is making caps when it could be making t-shirts instead
the company is producing fewer caps than it could be
What can cause a production possibilities curve to move to the right
thousands of people move out of the country
a new invention lowers the cost of production
an epidemic kills thousands of young men and women
the population is growing increasingly old
Suppose there is a family in which all the boys are expected to become farmers when they are adults, just as their fathers and grandfathers did. In which kind of economy do they participate?
false economy
command economy
traditional economy
centrally planned economy
Which of the following is NOT characteristic of a centrally planned economy?
the central government owns all land and capital
the central government makes all economic decisions
each collective or factory sets its own goals
each person is assigned a job
What might be a hardship for citizens of a centrally planned economy making a transition to a market-based system?
Farmers would have to grow the crops that the government instructed them to
only poor quality goods would be available to consumers, because manufacturers focused on quantity, not quality
Workers would lose job security and guaranteed incomes
Entrepreneurs would have fewer opportunities to start new businesses
Why do market exist?
Markets ensure the government does not intervene in the productions of goods and services
Market provide self-sufficient people with public places for the exchange of ideas
Markets ensure economic equity for all people
Markets allow people to buy what they need to consume and sell and specialized goods and services they produce
A government prints and distributes posters to inspire workers to increase their productivity. In which kind of economy does this most likely take place?
weak economy
traditional economy
market economy
centrally planned economy
You are an entrepreneur with an innovative idea for a new business. In which kind of economy would you have the most opportunity to try to achieve success?
market economy
command economy
traditional economy
economy of scale
Which of the following does the government provide as part of a safety
general elections every four years
unemployment compensation
a strong military defense
regulation of commerce
A person believes the real equality can only exist when political equality is couples with economic equality. This person believes that democratic means should be used to distribute wealth evenly throughout society. This person is a
socialist
communist
capitalist
authoritarian
Collective in the Soviet Union was inefficient producers of agricultural products. Why?
The farm were too small to produce substantial crops
Most farmers were poor and had to pay for their own equipment, seeds, and fertilizer out of their own pockets
Farm workers had guaranteed incomes, so they had few incentives to produce more or better crops
Soviet central planners ignored the farms in favor of factories producing consumers goods
Which of the following was a free market philosopher?
Karl Marx
Adam Smith
Vladimir Lenin
Friedrich Engels
Who was the leader that introduced communism and central planning to the former Soviet Union?
Karl Marx
Joseph Stalin
Vladimir Lenin
Friedrich Engels
In which of the following lists of mixed economies does the market system dominate?
France, Canada, South Africa, United Kingdom
United States, United Kingdom, Singapore, Hong Kong
Cuba, Greece, China, United States
Russia, Peru, France, Canada
What does the Temporary Assistance for Needy Families program provide?
cash to workers injured on the job
compensation to all who lose jobs
retirement income for the elderly
cash to the states to help run their welfare programs
What is the difference between a business cycle and the day-to-day ups and downs of the market?
A business cycle is a major, prolonged fluctuation rather than a day-to-day movement
The day-to-day fluctuations are more likely to have an impact on people's finances
A business cycle is usually more restricted, whereas market fluctuations are worldwide
The day-to-day ups and downs of the market can be much more extreme than a business cycle
Which of the following is a critical rule for determining whether something is a public good?
the total benefits to society are greater than the total cost
the benefits of the facility are greater for the society than for the individuals using it
the total cost is small foe each individual taxpayer
the benefit to each individual who uses the facility is greater than the cost
Which of the following is NOT an example of a public good?
municipal libraries
shopping malls
national parks
highways
What protections does OSHA give people in the United States?
consumer protection in buying foods
regulations on workplace safety and information about hazards in the workplace
regulations about clean environment
protection for certain key industries such as logging
What is one benefit provided by Social Security?
compensation for all who lose jobs
medical care for the indigent
cash transfers to workers injured on the job
retirement income for the elderly
Automakers are required to comply with public disclosure laws. What is one example of a requirement of these laws?
salespeople must be willing to sell cars to anyone who can afford them, regardless of gender, race, or ethnicity
salespeople must provide information about their competitors' cars, so customers can make informed decisions
car dealers must prominently display a sticker with the fuel efficiency in the car window.
Automakers must test all car models regularly for crash-worthiness.
In 1996, a new federal welfare program called Temporary Assistance for Needy Families (TANF) began assisting poor families. Which of the following was not provision of TANF?
work incentives
lifetime limit of benefits
direct cash payments of recipients
state-run welfare programs
Why is legal equality important to the free enterprise system?
ensuring that the businesses have the same legal rights will create healthy competition in the marketplace
protecting legal equality makes sure that all people may decide what legal agreements they want to enter into
guaranteeing all people the same legal rights will maximize the use of human capital
requiring all lawyers to obtain the same education will insure that all business clients receive competent legal representation
A large telephone company has hired lobbyists to try to persuade lawmakers to reduce governmental regulation over the telecommunications industry. Why might the company do this?
some regulations are costly to implement and cut into profits
many regulations promote too much competition, diving down prices
certain regulations result in rapid business growth, which some companies find difficult to handle
All of above
You will still be able to get public broadcasting whether or not you contribute to their fundraising campaign. You decide not to contribute. This is an example of the
free-rider problem
externality problem
public sector problem
public good probllem
A new runaway has opened up at the airport, and the flight path goes directly over your apartment. The noise of the airplane is a
market failure
positive externality
free-rider problem
negative externality
Jeff and Margaret qualify for Section 8 housing, a subsidized housing program from the federal government. What kind of benefit are they receiving?
Social Security benefits
in-kind benefit
faith-based initiative
cash transfer
What is a basic principle of the law of demand?
Services are of interest in the same way that goods are.
The higher the price, the more people will want the good.
When a good's price is lower, people will buy more of it.
Everyone has a limited income that they will spend.
Hoe did the existence of the baby boom generation change demand in the United States?
Demand was raised for different goods with each age the baby boomers reached.
After they reached the teenage years, the baby boomers were integrated into the society and no longer affected demand.
People were poorer because they had so many children, so demand was lowered.
The baby boomers did not raise demand until they became adults, when they had their own money to spend.
Ceteris paribus, or " all other things held constant," is an assumption that has which of the following effects on a demand schedule?
It takes only prices into account
It is accurate only at one price level
It considers the effects of all possible changes on demand
It is accurate no matter what changes occur
Which of the following events could cause the demand curve for sports magazines to shift to the right?
A star basketball player interests thousands of people in professional sports for the first time.
The publisher cuts the price of an issue form $3.95 to $2.50.
The price of an issue of a popular computer game magazine rises from $2.95 to $3.95.
A local library buys a subscription to the sports magazine for its reading room.
According to Figure 4.4, How many slices of pizza will Ashley buy if the price is $1.00 per slice?
Four
Three
Two
One
A new restaurant has opened. Ashley's demand for pizza has decreases and her demand curve has shifted. Based on Figure 4.4, which combination of price and quantity demanded would you expect to find on her new demand curve?
$2.00, three slices
$1.00, five slices
$1.50, three slices
$2.00, one slice
According to Figure 4.4, what is Ashley's elasticity of demand as the price of a slice of pizza decreases from $2.00 to $1.00
5.0
1.0
2.0
4.0
According to Figure 4.4, at what price will Ashley's quantity demanded of pizza be three slices?
$1.50
$3.00
$.50
$1.00
A slice of pizza costs $4.00. Based on Ashley's demand curve in Figure 4.4, what is her quantity demanded of pizza at this price?
zero
five
There is not enough information to answer the question
one
