WorksheetsUnit 1 EPF Study Guide - Spring25
Total questions: 28
Worksheet time: 14mins
Name
Class
Date
1.
Opportunity Cost is best defined as:
a)
A) The cost of producing a good.
b)
B) The value of the next best alternative forgone.
c)
C) The expenses incurred in a transaction.
d)
D) The price difference between goods.
2.
Which of the following best defines a Market Economy?
a)
Option 1A) An economy where the government makes all economic decisions.
b)
B) An economy based on supply and demand with minimal government intervention.
c)
C) An economy that combines elements of both capitalism and socialism.
d)
D) An economy that relies heavily on barter systems.
3.
Per capita GDP is defined as:
a)
A) The total GDP of a country divided by its population.
b)
B) The GDP of a country without inflation adjustments.
c)
C) The GDP of a country during a recession.
d)
D) The GDP of a country at its peak.
4.
In a Command Economy, economic decisions are made by:
a)
A) Individual consumers and producers.
b)
B) A central authority or government.
c)
C) Market forces.
d)
D) Private businesses.
5.
A Mixed Economy combines:
a)
A) Socialism and communism.
b)
B) Elements of both market and command economies.
c)
C) Only government ownership of resources.
d)
D) Barter systems and market forces.
6.
The Law of Demand states that:
a)
A) As prices increase, demand decreases.
b)
B) Demand remains constant regardless of price.
c)
C) Higher prices lead to higher demand.
d)
D) Demand is not affected by consumer preferences.
7.
Demand Elasticity measures:
a)
A) The sensitivity of quantity demanded to price changes.
b)
B) The total demand in an economy.
c)
C) The fixed nature of demand regardless of price.
d)
D) The relationship between demand and supply.
8.
The Equilibrium Price is:
a)
A) The price where supply exceeds demand.
b)
B) The price at which quantity supplied equals quantity demanded.
c)
C) The highest price consumers are willing to pay.
d)
D) The price set by the government.
9.
Supply Elasticity refers to:
a)
A) How much the quantity supplied changes in response to price changes.
b)
B) The total supply in a market.
c)
C) The fixed nature of supply.
d)
D) The government control over supply.
10.
The Law of Supply indicates that:
a)
A) As prices increase, the quantity supplied decreases.
b)
B) There is no relationship between price and quantity supplied.
c)
C) Higher prices lead to higher quantity supplied.
d)
D) Supply is always inelastic.
11.
The three basic economic questions are:
a)
A) What to produce, how to produce, and for whom to produce?
b)
B) When to produce, where to produce, and how much to produce?
c)
C) Who produces, who consumes, and who profits?
d)
D) Why to produce, how to consume, and where to distribute?
12.
The four factors of production include:
a)
A) Land, labor, capital, and entrepreneurship.
b)
B) Money, resources, technology, and labor.
c)
C) Goods, services, capital, and wealth.
d)
D) Supply, demand, labor, and management.
13.
Macroeconomic indicators are used to:
a)
A) Measure individual business performance.
b)
B) Evaluate the overall health of an economy.
c)
C) Assess the quality of goods and services.
d)
D) Determine the price of a single good.
14.
The business cycle consists of phases including:
a)
A) Expansion, contraction, peak, and trough.
b)
B) Growth, decline, stability, and recession.
c)
C) Inflation, deflation, recovery, and growth.
d)
D) Boom, bust, stagnation, and growth.
15.
Expansion in the business cycle is characterized by:
a)
A) Decreasing GDP and rising unemployment.
b)
B) Increasing GDP and rising consumer confidence.
c)
C) A sudden drop in production.
d)
D) A transition to a recession.
16.
A recession is defined as:
a)
A) A period of economic growth.
b)
B) A significant decline in economic activity lasting more than a few months.
c)
C) A time of high consumer spending.
d)
D) A period when GDP is increasing.
17.
Real GDP differs from Nominal GDP in that:
a)
A) Real GDP is adjusted for inflation, while Nominal GDP is not.
b)
B) Nominal GDP includes services, while Real GDP does not.
c)
C) Real GDP measures production only, while Nominal GDP measures sales.
d)
D) There is no difference between the two.
18.
Per Capita GDP is important because it:
a)
A) Measures total economic output.
b)
B) Provides an average economic output per person.
c)
C) Only looks at production in urban areas.
d)
D) Is irrelevant to understanding an economy.
19.
In a market economy, choices are made primarily by:
a)
A) The government.
b)
B) Producers and consumers.
c)
C) Central planners.
d)
D) Financial institutions.
20.
The relationship between producers and consumers affects economic decisions through:
a)
A) Strict government regulations.
b)
B) Supply and demand dynamics.
c)
C) Fixed prices set by authorities.
d)
D) Limited consumer choices.
21.
The government can affect economic decisions by:
a)
A) Removing all regulations.
b)
B) Implementing taxes and subsidies.
c)
C) Allowing complete free market operations.
d)
D) Ignoring market trends.
22.
Competition benefits consumers by:
a)
A) Reducing the number of available products.
b)
B) Increasing prices and limiting choices.
c)
C) Encouraging innovation and lowering prices.
d)
D) Eliminating all small businesses.
23.
A sole proprietorship is defined as:
a)
A) A business owned by two or more individuals.
b)
B) A business owned and operated by one person.
c)
C) A business that is owned by shareholders.
d)
D) A non-profit organization.
24.
One advantage of a partnership is:
a)
A) Unlimited liability for owners.
b)
B) Shared resources and responsibilities.
c)
C) Difficulty in decision making.
d)
D) Limited access to capital.
25.
Which of the following is a disadvantage of a limited liability company (LLC)?
a)
A) Less flexibility in management.
b)
B) Double taxation on profits.
c)
C) Limited personal liability for owners.
d)
D) Complexity in formation and operation.
26.
When evaluating business organization forms, one should consider:
a)
A) The level of taxation and regulatory burden.
b)
B) The ease of raising capital.
c)
C) The level of control desired by the owner.
d)
D) All of the above.
27.
Business organizations in the public sector may focus on:
a)
A) Profit maximization.
b)
B) Providing services to the community.
c)
C) Reducing competition.
d)
D) Personal gain for owners.
28.
One key advantage of a cooperative is:
a)
A) Higher prices for consumers.
b)
B) Equal say in decision-making among members.
c)
C) Limited access to resources.
d)
D) Focus on maximizing profits.
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