WorksheetsEconomics-BenchmarkReview
Total questions: 51
Worksheet time: 26mins
Name
Class
Date
1.
What is the fundamental economic problem?
a)
Trade
b)
Inflation
c)
Scarcity
d)
Unemployment
2.
People are forced to make decisions about how to use resources efficiently because…
a)
Foreign Exchange depends on mutual satisfaction
b)
Allocation is a requirement of satisfaction
c)
Resources are limited and wants are unlimited
d)
Satisfying needs and wants requires thought
3.
Economic Models (graphs) are…
a)
perfect illustrations of the real world
b)
simplified illustrations of a complex real world
c)
one that do not require axis labels
d)
one that has not title
4.
Which detail BEST reflects the main goal of Adam Smith?
a)
Smith learned the best way to make pins.
b)
Smith did not see the bad parts of capitalism.
c)
Smith explained how capitalism worked.
d)
Smith had many different jobs in Scotland.
5.
Which of the following correctly identifies a key principle of economics?
a)
Choices involve costs
b)
Trade-offs do not matter
c)
Markets are a poor way of organizing economic activity
d)
Individuals are usually irrational
6.
The buildings, structures, machinery, and tools used in the production process are called...
a)
Physical Capital
b)
Natural Resources
c)
Entrepreneurship
d)
Labor
7.
Any resource used to make goods and services is called ______.
a)
labor
b)
capital
c)
factors of production
d)
a production possibilities frontier
8.
What is Utility?
a)
profit from business operations
b)
level of happiness/satisfaction associated with an alternative choice
c)
level of happiness/satisfaction from one additional service/good
d)
level of happiness/satisfaction
9.
What are the three basic economic questions?
a)
What, How, Whom
b)
What, Where, How
c)
What, How, Where
d)
What, Whom, When
10.
You are in a clothing store. You see a pair of pants and a t-shirt you like. You only have enough money for one item. You decide to buy the pants. What is the opportunity cost of your choice?
a)
Price of the T-Shirt
b)
Price of the Pants
c)
Cost of both the T-Shirt and the Pants
d)
Difference between the Pants and T-shirt
11.
Which of the following would cause a production possibilities curve showing the production of steel and missiles to shift outward?
a)
Using machinery for missile production instead of steel production
b)
Using machinery for steel production instead of missile production
c)
Developing a more efficient steel-making process.
d)
Re-hiring of laid-off steelworkers
12.
Imagine Roland has T-shirt he values at $40, and he has an opportunity to trade the T-shirt for a pair of boots. Roland will trade the T-shirt for the boots if he…
a)
thinks boots are cool
b)
values the boots at more than $40
c)
thinks he can re-sell the boots
d)
believes the inflation rate will be less than 3%
13.
According to the law of supply, when prices rise…
a)
Supply decreases (ceteris paribus)
b)
Quality improves (ceteris paribus)
c)
Quantity Demanded increases (ceteris paribus)
d)
Quality Supplied increases (ceteris paribus)
14.
According to the law of demand, when price rise…
a)
Quantity Demanded decreases (ceteris paribus)
b)
Quality improves (ceteris paribus)
c)
Quality Supplied decreases (ceteris paribus)
d)
Supply decreases (ceteris paribus)
15.
Which of the following is a determinant of demand?
a)
Cost of Inputs
b)
Number of Suppliers
c)
Availability of Inputs
d)
Expectations of Future Prices
16.
A firm’s profits are determined by…
a)
Adding up all revenues and subtracting taxes
b)
Subtracting total costs from total revenues
c)
Multiplying the number of units sold by the selling price
d)
Multiplying the firms stock price by the number of stock shares
17.
Salmon and Catfish are…
a)
substitutes
b)
externalities
c)
complements
d)
None of the Choices
18.
Which of the following is an example of a price floor?
a)
Minimum Wage
b)
Quotas
c)
Rent Controls
d)
None of the Choices
19.
The amount of debt a person can handle is referred to as...
a)
Character
b)
Collateral
c)
Capacity
d)
Capital
20.
Which of the following is the best way to improve your credit score?
a)
Apply for a new loan
b)
Paying your bills on time.
c)
Use most of the limits on your credit cards
d)
Close your oldest credit account
21.
The most useful information in an advertisement would be...
a)
the price
b)
endorsement from a well-known celebrity
c)
a list of product accessories
d)
comments from the product's users
22.
Lola is a high school technology teacher. She enrolls in a computer class at least twice per year to stay current on recent technology changes and updates. By continuing her education, Lola is investing in her…
a)
salary
b)
human capital
c)
family
d)
investment portfolio
23.
Consider the market for backpacking permits for the Grand Canyon. What will happen if the US Park Service lowers the price of permits?
a)
Supply will Increase
b)
Demand will Decrease
c)
Quantity supplied will decrease
d)
Quantity demanded will increase
24.
If the price of nachos increases, which of the following is the most likely cause?
a)
Number of suppliers has decreased
b)
Cost of Inputs (chips, cheese, etc.) have decreased
c)
Nachos have become less popular
d)
Jalapeno Peppers, a complementary good, has increased in price
25.
A product such as salt has inelastic demand. How will a small increase in price affect demand for salt?
a)
Quantity Demanded will decrease significantly
b)
Quantity Demanded will increase significantly
c)
Demand will fluctuate between an increase and a decrease
d)
Little to no effect on Demand
26.
Profits are maximized (or losses minimized) at the output level where...
a)
marginal cost is at a minimum
b)
fixed costs are minimized
c)
marginal revenue exceeds marginal cost by the largest amount
d)
marginal revenue is equal to marginal cost
27.
American Airlines will not raise prices without first considering how United Airlines or Southwest Airlines will behave. This is probably evidence of their…
a)
collusion
b)
cutthroat competition
c)
interdependence
d)
price fixing
28.
Individuals who want to earn higher than average incomes should look to enter professions for which…
a)
there are qualified workers in short supply
b)
the primary task includes physical labor
c)
there is a dwindling demand for workers
d)
there is little in the way of education and training required
29.
Which of the following transactions would increase gross domestic product (GDP)?
a)
A librarian buys a share of Barnes & Noble stock
b)
A student buys a used textbook for his college class
c)
A teacher buys a new dress produced in Bangladesh
d)
A Chinese company produces a new television show in the US
30.
Which of the following is an accurate statement about inflation?
a)
Irresponsible monetary policy can lead to hyper-inflation
b)
Unexpected inflation hurts everyone in the economy
c)
Negative inflation rates contribute to the national economic health
d)
Producer Price Index (PPI) is the most common measure of inflation in the US
31.
Which of the following is a macroeconomic goal of the United States?
a)
0% Inflation
b)
GDP Growth at 12% per year
c)
Full Employment
d)
0% Unemployment
32.
Which of the following best describes a major role of the Federal Reserve?
a)
Insuring the deposits of savings banks
b)
Serving as the central bank for the federal government
c)
Advising the US Congress on tax policy
d)
Monitoring the nation’s balance of payments
33.
Although _____ makes up the largest category of GDP in the U.S., changes in _____ are responsible for most recessions and expansion.
a)
Government Spending; Net Exports
b)
Investment; Net Exports
c)
Consumption; Investment
d)
Investment; Consumption
34.
Which of the following types of unemployment is desirable?
a)
Frictional Unemployment
b)
Structural Unemployment
c)
Cyclical Unemployment
d)
None of the Choices
35.
Alan is currently not employed but is thinking about getting a job and is browsing through the want ads to see what kinds of jobs are available. The BLS would consider Alan to be:
a)
Not in the Labor Force
b)
Discouraged Worker
c)
Employed
d)
Unemployed
36.
Which of the following investment options is the riskiest?
a)
Stocks
b)
Long-Term Savings Accounts
c)
US Government Savings Bonds
d)
Safe in your bedroom closet
37.
When comparing saving and investing, which of the following is true?
a)
Saving and investing both help a person stay at their current level of economic well-being
b)
Savings is used for long-term goals, while investing is used to pay for emergencies
c)
Savings is riskier than most investing accounts
d)
Savings provides for emergencies, while investing is used for long-term goals
38.
To be considered financially secure, it is recommended that a person have how much money in savings?
a)
At least 6 months’ worth of salary
b)
No more than 6 months’ worth of salary
c)
At least 3 months’ worth of salary
d)
It is not necessary to have savings to be financially secure
39.
Which of the following would be the best advice for a 25-year-old looking to begin saving for retirement?
a)
Invest all of the money in a traditional savings account so you can access your money at any time
b)
Invest the money in various strategies such as stocks, certificates of deposits, savings bonds, and mutual funds.
c)
Invest half of the money in stocks, and half of the money in a variety of mutual funds
d)
Invest all of the money in the most conservative options in your 401(k)
40.
Which of the following would be the best advice for a 60-year-old looking to retire in 5 years?
a)
Stop investing in your 401(k)
b)
Invest half the money in stocks, and half of the money in a variety of mutual funds
c)
Invest all money in a traditional savings account so you can access your money at any time
d)
Invest most of your savings in certificates of deposit.
41.
Which of the following will occur if the money supply grows faster than the quantity of goods and services in the economy?
a)
deceased value of the dollar
b)
A fall in real wages for individuals earning a fixed income
c)
increased inflation
d)
All the Choices
42.
Which of the following pieces of information would be LEAST helpful in assessing the health of a national economy?
a)
Level of Consumer Confidence
b)
Real GDP
c)
Unemployment Rate
d)
Inflation Rate
43.
Ada lost her job during the last recession. What type of unemployment is she experiencing?
a)
Structural Unemployment
b)
Cyclical Unemployment
c)
Seasonal Unemployment
d)
Frictional Unemployment
44.
Kevin used to work as an auto worker, and due to the decline of the US auto industry, is now unemployed and thinking about retraining as a bicycle assembler. What type of unemployment is he experiencing?
a)
Structural Unemployment
b)
Cyclical Unemployment
c)
Seasonal Unemployment
d)
Frictional Unemployment
45.
Trade based on comparative advantage…
a)
Improves a society's standard of living
b)
Increases consumption possibilities
c)
Makes both trade partners better off
d)
All the Choices
46.
Which of the following is an example of a voluntary trade?
a)
A state legislature requires citizens to pay taxes to help cover the expenses of public schools
b)
A person is kidnapped and returned to safety after the kidnappers have been paid $1 million
c)
A music teacher is paid to give private lessons to a violin student
d)
A person is knocked down and rendered unconscious so a second person can take the first person's money
47.
Which of the following characteristics is most likely to help a country be wealthy and prosperous?
a)
Corruption in the national government
b)
Abundant quantities of oil
c)
A location in the tropics
d)
A well-organized system of public education
48.
A common cause of financial difficulty is…
a)
Not having enough life insurance
b)
Preparing your tax returns late
c)
Poor money management habits
d)
Need for additional career training
49.
Which of the following statements about our interactions with the knowledge of personal finance is NOT considered to be true?
a)
Your present self-impacts your future self.
b)
You are responsible for your present self and your future self.
c)
Investment increases risk and reduces your ability to cope with risk and uncertainty.
d)
None of the Choices
50.
Which of the following represents the most likely way in which government action could improve national wealth and prosperity for the long-term?
a)
Effectively enforcing clearly defined property rights
b)
Imposing a national minimum wage of $15/hour
c)
Refusing to pay debts owed in foreign countries
d)
Printing an additional $5 million in US paper currency
51.
Assume Country X and Country Y have identical resources/technology. Country X can produce 400 milkshakes or 200 textbooks. Country Y can produce 900 milkshakes or 300 textbooks. Which of the following is true?
a)
Country X has the comparative advantage in milkshake production
b)
Country X has the absolute advantage in textbook production
c)
Country X has the comparative advantage in textbook production
d)
Country X has the absolute advantage in milkshake production
100 %
