Free Printable economia command assessment

1.

Which statement best expresses the economic problem of scarcity?

a)

(A) It exists only in poor, underdeveloped countries.

b)

(B) It exists only in a natural disaster.

c)

(c) It existed in the past because of inefficient technology.

d)

(D) It is the basic economic problem facing all societies

2.

Tim spends $20 on a football game instead of buying a warm jacket for $20. What is the opportunity cost of the decision?

a)

(A) the benefit of owning the warm jacket

b)

(B) $20

c)

(c) enjoying a football game

d)

(D) the opportunity to learn about football

3.

A teenager named Carlos started a car-washing business. He found customers and hired workers for his business. What productive resource does Carlos represent?

a)

(A) capital

b)

(B) land

c)

(C) labor

d)

(D) entrepreneurship

4.

In the figure above, the opportunity cost of producing 400 yards of instead of 200 yards of cloth is

a)

(A)750 bushels of corn

b)

(B) 250 bushels of corn

c)

(c) 75 bushels of corn

d)

(D) 975 bushels of corn

5.

Trees, minerals, and the real estate on which a company builds its main manufacturing building are all

a)

(A) capital goods

b)

( B ) capital investments

c)

(c) land

d)

(D) labor

6.

Defined as the next best alternative given up when a decision is made

a)

A) utility

b)

(B) opportunity cost

c)

(c) trade-off

d)

(D) none of these

7.

Jamie must decide whether to buy a new truck. He concludes that the marginal costs of buying the truck are greater than the marginal benefits. In Jamie's case, buying the truck would be

a)

(A) a rational economic decision

b)

(B) an irrational economic decision

c)

(c) an opportunity cost

d)

(D) a productive choice

8.

Product scarcity would most likely cause a business to

a)

(A) petition for government aid

b)

(B) increase prices

c)

(C) lower prices

d)

(D) select a trade-off

9.

A production possibilities curve would best help a business or nation decide

a)

A) how to utilize voluntary exchange

b)

(B) whether to offer negative or positive incentives to consumers

c)

(c) whether to increase capital or labor resources

d)

(D) whether it is worthwhile to produce a certain amount of a good or service

10.

Country A wishes to increase Economic growth and productivity, Country A's BEST course of action to take is to

a)

(A) increase production of natural resources

b)

(B) increase production of consumer goods

c)

(c) pay entrepreneurs to develop new products

d)

(D) ) increase human capital through education

11.

An entrepreneur decides to use the concept of division of labor to increase productivity; he MOST LIKELY believes that thi action will be a rational decision because it

a)

(A) ) provides predictable incentives in the workplace

b)

(B) allows human resources to specialize in production

c)

(c) facilitates voluntary exchange

d)

(D) eliminates marginal costs for the employer

12.

MadMarvel is a business that produces collectible figures for sale online and in retail stores. MadMarvel purchases plastics, manufactured metals and processed rubber to assemble collectibles and its manufacturing plant is located in Championville, Missouri where it employs 500 workers. Each worker spends about 100 hours in training before he is allowed to assemble a collectible. MadMarvel finds that it has to spend $1 for each additional Henry Hero it produces and can sell each collectible for 3 dollars. The company recently decided to cancel the production of the Henry Hero to produce a new collectible, the Darling Darla. The company estimates that the marginal cost for the Darling Darla will be around 4 dollars and the company will be able to sell each Darla for about 3. According to this information: The marginal cost for the Henry Hero is

a)

(A) 1 dollar

b)

(B) 10 dollars

c)

( C) 500 workers

d)

(D) the Darling Darla

13.

Which is NOT a typical government action in the US economy?

a)

A) providing public goods and services

b)

B) protecting property rights

c)

(C) resolving market failures

d)

(D) setting prices

e)

(E) redistributing income

14.

The most common type of resource allocation strategy used in a free market economy.

a)

(A) First Come, First Serve

b)

B) Personal Characteristics

c)

(c) Price

d)

(D) Majority rule

e)

(E) Authority

15.

The 3 basic economic questions that every society must answer are_,_, and _ to produce.

a)

(A) what, for whom, how

b)

(B) what, when, how

c)

(c) how, when, for whom

d)

(D) for whom, who, why

e)

(E) none of these

16.

When one makes an investment, he or she is most likely to

a)

(A) Postpone current benefits

b)

(B) Increase standard of living in the present time

c)

(c) Have few or no opportunity costs in the BBC decision

d)

(D) None of these

17.

Which is true regarding incentives?

a)

A) they are usually positive in nature

b)

(B) they force governments, people and businesses to make unanticipated tradeoffs

c)

(c) they often cause unexpected reactions

d)

(D) ) people respond to them in predictable ways

18.

Which of the following is NOT true regarding voluntary exchange?

a)

A) It is made necessary because of societal specialization.

b)

B) It is beneficial to the parties involved as long as it is non-fraudulent.

c)

C) Its use is limited to predominantly underdeveloped countries.

d)

(b) It improves efficiency in an economy.

e)

E) None of these are true.

19.

The state government agrees to build Macon State Prison a new workout facility if they produce a certain sum of license plates. The prison war additional snacks and Friday steak dinners if they spend 20 hours a week making the license plates for the state. This BEST explains the value t warden place on

a)

(A) human capital

b)

(B) incentives

c)

(c) economic growth

d)

(D) innovation

e)

( E) investment

20.

Government issued a patent, which would be indicative of a guarantee of

a)

(A) property rights in a mixed market economy

b)

(B) equity in a mixed market

c)

c) capital improvement

d)

(D) property rights in a market economy

e)

(E) none of these

21.

Which of the following US taxes would be characteristic of the chart shown below?

a)

(A) Federal Income Tax

b)

(B) Medicare

c)

(c) Social Security

d)

(D) Sales Tax

22.

Which situation would be the most likely benefit of Timmy living in a command economy?

a)

(A) He sees a Kroger coupon in the paper, so he decides to go to Kroger instead of Wal-Mart to save money.

b)

(B) He gets a raise at the factory because he has worked harder and put in more hours than his co-workers.

c)

(C) He doesn't have to worry about losing his job on the fishing boat, even though there is little demand for fish

d)

(D) He is offered the newest and most innovative products on the market

23.

Which economic system bests provides for consumer protections from faulty or misleading government actions?

a)

(A) Market

b)

(B) Mixed Market

c)

(c) Command

d)

(D) Traditional

24.

The MAIN reason that modern command economies have failed is

a)

(A) Focus on equity has led to a shortage of luxury goods

b)

(B) Housing prices were too high

c)

(C) Government decisions led to shortages and inefficiency

d)

(D)

(D) Government favored capital over consumer goods

25.

Which of the following would be considered FALSE regarding the wealthy when compared to the rich?

a)

(A) The wealthy are able to live with a better standard of living

b)

(B) The wealthy are better able to provide for future generations

c)

(c) The wealthy tend to invest wisely

d)

(D) The wealthy tend to stay out of debt

26.

Which of the following describes the risk and return of investing in stock? They offer

a)

(A) The lowest risk and the highest possible return

b)

(B) The highest risk and the highest possible return

c)

(c) The lowest risk and the lowest possible return

d)

(D) The highest risk and the lowest possible return

27.

Katie decides to put money in a traditional IRA instead of a Roth, what is the most probable reason?

a)

(A) she is able to forgo paying taxes on her current income

b)

(B) she will not be taxed on the profits when she takes the money out in retirement

c)

(C) the traditional IRA is considered less of a risk due to diversification

d)

(D)

the traditional IRA has professional management, while ROTH does not

28.

Net worth is found by

a)

(A) Adding physical cash, savings account and checking account funds

b)

B) Subtracting one's debt from assets

c)

C) Subtracting fixed expenses and estimated variable expenses from one's salary

d)

(D) Adding one's current checking and savings account to his yearly salary

29.

Which financial institution is characterized by ownership of members and its non-profit status?

a)

(A) credit union

b)

B) commercial bank

c)

c) title pawn

d)

(D) payday lender

e)

(E) None of these

30.

Capital gains occur when

a)

(A) An investor gets paid a sum of money from a corporation's profits

b)

(B) An investor sells ownership and acquires a profit through the proceeds

c)

(c) A salaried workers' pay increases year over year

d)

(D) An hourly workers pay increases from the previous period

31.

Elective deductions are often used for the purpose of

a)

(A) Reducing taxable income

b)

(B) Providing proof of employment

c)

(c) Spreading pay check proceeds throughout the year

d)

(D) None of these

32.

A general difference in scholarships and grants is that

a)

(A) Scholarships do not have to be paid back

b)

(B) Grants do not incur taxes

c)

(c) Scholarships are based on merit, grants are based on need

d)

(D) Grants are not available to private school students

33.

Jimmy purchased a promise from a company to pay him back later with interest. Jimmy now owns

a)

(A) stock

b)

(B) a bond

c)

(C) ) a mutual fund

d)

(D) a certificate of deposit

34.

The tax structure shown below is

a)

(A) Progressive

b)

(B) Regressive

c)

(c) Proportional

d)

(D) None of these

35.

Tim wants to place money in a savings account, Tim ALWAYS wants to save money using___interest.

a)

(A) Simple

b)

B) Compound

c)

C ) Variable

d)

(D) Fixed

36.

Sammy generated a nominal return of 4% on his investment last year, but had no real return, this is most likely due to

a)

(A) a company failing to pay a dividend or lowering the dividend below the 4% threshold

b)

(B) the company or mutual fund that Sammy invested in declared bankruptcy

c)

(C) Sammy's economy experiencing a rate of inflation above 4%

d)

D) an increase in taxes on capital gains above 4%

37.

What is the biggest component of one's credit score?

a)

(A) payment history

b)

(B) amounts owed

c)

(c) length of credit history

d)

(D) types of credit in use

38.

Which of the following best describes revolving credit? One....

a)

(A) is able to borrow repeatedly up to a certain limit

b)

(B) gets a single lump sum of funds

c)

(c) makes one single payment

d)

(D) pays a small sum now in order to borrow larger funds in the future

39.

Which function of money allows individuals to specialize and acquire the items they want and need?

a)

(A) Store of value

b)

B) Standard of Value

c)

(c) Medium of Exchange

d)

(D) Standard of Account

40.

One advantage of a mutual fund would be

a)

(A) the assets never go down in value

b)

(B) the ability to manage the stocks yourself

c)

(c) the diversity of stocks within the fund

d)

(D ) the investment offers the highest potential return

41.

Why would one wish to invest in a certificate of deposit instead of a savings account?

a)

(A) It gives ownership in the company

b)

(B) It pays a higher interest rate than the savings account

c)

(C) It is insured by the FDIC

d)

(D) one is able to withdraw his money at anytime

economia command assessment

Total questions: 41

Worksheet time: 21mins

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