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WorksheetsEconomic Summative
Total questions: 142
Worksheet time: 1hrs 11mins
Rationing is a system under which an agency such as the government decides everyone's "fair" share. Rationing has often been used during wartime. If people receive a set ration regardless of the amount of work completed, how would this affect peoples' incentive to work?
People might feel less inclined to work.
The incentive to work will not change.
There is no effect on the incentive to work.
People might feel more inclined to work.
A government that operates in a market economy MIGHT become involved in the economy
to make sure all products are produced the same way.
to eliminate income inequality among its citizens.
to increase the profits of a specific company.
to provide public goods and services to its citizens.
Which of these is MOST LIKELY a result of a high unemployment rate in the United States?
increased revenues
increased demand for consumer goods
increased production of capital goods
greater government expenditures for transfer payments
How do private property rights contribute to a capitalist system?
Businesses can determine what to produce based on consumer demand.
High quality products and reasonable prices are guaranteed.
The government owns most of the factors of production.
Individuals are free to own the resources used to produce goods.
Some products (such as roads, sewer systems, and railroads) are not adequately supplied by the marketplace acting alone. Therefore, choices about building such things are made by
stockholders
private corporations
governments
referendums
For a market economy to function well, it is MOST important that laws be passed to protect the right to
political dissent
privacy
property
free travel
Which statement describes an opportunity cost that could result from the government regulating businesses?
Lead to an increase in product safety.
Consumer protection declines as a result of government regulations.
Government regulations can lead to an increase in production costs.
Less recalls occur as a result of government regulations.
In a society with a market economy, property rights are generally enforced by
the consumers
the banks
the courts
the producers
Investment in education, training, and skill development has been linked to
declining job satisfaction.
increasing earnings for workers.
decreasing political participation.
growing financial instability.
Increased education and training within a nation will most likely result in
a decrease in Gross Domestic Product (GDP).
an increase in the presence of natural resources.
a decrease in entrepreneurship.
an increase in Gross Domestic Product (GDP).
Bob would like to increase his earnings. The option MOST LIKELY to increase his earnings potential in the long-term is to
spend money to renew current training.
laterally transfer to a different job within his company.
take a similar position with a different company.
spend money for additional training and education.
The purpose of a production possibilities graph is to show
whether the supply of goods is elastic or not.
how limited resources can be used to produce a combination of items.
the number of workers required for a specific task.
how supply and demand determine price.
If a government wanted to improve the productivity of its human resources it could
invest more money in developing solar and wind energy.
lower interest rates to make borrowing money easier.
commit to drilling for oil in protected wildlife areas.
expand funding and opportunities for vocational training.
A measure of the amount of output produced by a given amount of inputs in a specific period of time is the definition of
equilibrium price
allocation
productivity
opportunity cost
When the amount of output produced by a given amount of inputs increases, the MOST LIKELY result is
business spending on productive resources increases.
consumer spending on productive resources increases.
economic interdependence rises.
overall productivity rises.
Which point on the PPC represents a situation in which resources are not being used effectively?
Inside the curve
Outside the curve
High on the curve
Low on the curve
Productivity may BEST be defined as
the ratio of outputs to inputs.
the quantity of production.
the amount of revenue earned.
the quality of what is produced.
When there are advances in technology, such as the personal computer, how might business productivity change?
The businesses' products will no longer be demanded.
Manufactured items will be made elsewhere.
Productivity is separate from technological advances so there is no impact.
The new technology can replace outdated, less efficient, machinery.
A production possibilities curve deals with which of these concepts?
demand-pull inflation
cost-push inflation
equilibrium price
opportunity costs
If a certain combination of goods and services lies inside the production possibilities curve for an economy, which of these statements must be true?
That combination is an inefficient use of resources.
More resources must be obtained to attain that combination of goods and services.
This economy must be realizing gains from specialization and trade.
Resources are being used more efficiently now than in the past.
As one of the factors of production/productive resources, capital can be defined as
the equipment and factories needed to produce goods.
the goods and services a business produces.
the supply of labor needed to produce goods.
the people that purchase goods and services.
An opportunity cost is
usually absent in a command economy.
when goods are recycled into other goods.
the next-best alternative you give up in order to do something else.
is only an issue when there is not a scarcity of goods and resources.
The basic economic condition that exists when unlimited wants exceed limited productive resources is called
hyper inflation
opportunity cost
capital
scarcity
Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr. Stevens decides to open his sporting goods store, what is the opportunity cost of this decision?
the opportunity to rent it to another tenant.
the opportunity he has to run his own business.
the profits he would make from his sporting goods store.
the property tax he would pay on the building.
Juan realizes that if he studies an extra hour for his test, he will score five points higher. For each extra hour spent studying, he is getting one hour less sleep. When deciding whether to spend an additional hour studying or sleeping, Juan is engaged in what economic activity?
marginal analysis
trade negotiations
bartering
market transactions
What is a rational economic decision?
One in which marginal costs exceed marginal benefits.
One in which marginal benefits exceed marginal costs.
One in which the benefits are unknown, but costs are low.
One in which there are no opportunity costs.
One afternoon, you were driving home and listening to your favorite music. You were so engrossed in the music and getting home that you failed to notice your speed. The police pulled you over and gave you a ticket for driving 57mph in a 45mph speed zone. Your ticket cost you $245 of your hard-earned summer job money. What is the desired effect of the negative incentive of the speeding ticket upon future driving?
You will try to outsmart the police by purchasing a radar detector.
You will be more aware of your speed when driving.
You will stop driving that route home during the afternoon hours.
You will learn to avoid speed-traps.
What is the primary purpose of job specialization?
increased marginal utility
regional self-sufficiency
increased consumer income
increased efficiency and productivity
Although specialization increases productivity, one disadvantage is
a reduction in wasted time.
higher costs in training workers.
the loss of training time.
loss of flexibility among workers.
When an individual specializes to produce one good, and then acquires additional desired goods from other specialists,
neither party gains as specialization decreases efficiency.
neither party gains as specialization decreases productivity.
both parties gain as a result of voluntary exchange.
both parties gain as a result of fraudulent exchange.
In a command economy, how are the prices of goods and services determined?
market forces of supply and demand
the central government
business owners
independent agencies and independent regulators
In a market economy, prices are established by
consumers and labor unions
decree of government agencies
businesses which buy and sell the products
the interaction of supply and demand
Communism and socialism are usually found in what type of economic system?
pure market
mixed market
command
traditional
Which question is MOST LIKELY a fundamental economic question?
Who will pay the taxes?
Who will educate the workers?
Who will get the goods and services produced?
Who will do the work to produce the goods and services?
On the consumer sales day known as "Black Friday" after Thanksgiving, your local department store guarantees $10 gift cards to the first 100 customers at check-out, with one gift card worth $1000. What economic strategy is being used if a person wants to be assured to get a gift card?
lottery
first-come-first-served
personal characteristics
majority rule
What is the basic problem that all economies must deal with?
How to satisfy limited wants with limited resources
How to satisfy limited wants with unlimited resources
How to satisfy unlimited wants with limited resources
How to satisfy unlimited wants with unlimited resources.
The BEST explanation of why there will always be scarcity is because
People and their tools are inefficient
Natural disasters create frequent shortages
Governments create scarcity to keep people wanting more
While peoples' wants are unlimited, resources are limited
In a free enterprise system, what motivates individuals to start a business?
The risk of failure
The need for job security
The desire to earn a profit
The desire to make economic decisions
When a society invests in education, how is it improving productivity?
By investing in the future
By investing in human capital
By investing in capital goods
By investing in entrepreneurship
The factors of production (land, labor, capital, and entrepreneurship) go into making all things that are made to be sold to you. Which of these is an example of "labor"?
Money
Hammer
Gold mine
Police officer
Mr. Green is opening a new bakery. He has purchased an industrial oven which can accommodate twenty loaves of bread at a time. This oven represents which factor of production?
Capital
Entrepreneurship
Labor
Land
Which example of productive resources is matched correctly?
Land and surgeon
Capital and oil rig
Labor and telephone wire
Entrepreneurship and rice field
The study of how individuals, institutions, and society make choices under the conditions of scarcity is
allocation
deregulation
economics
specialization
Which correctly identifies a NEED as opposed to a want or desire?
I need a new pair of jeans.
John really needs a haircut!
We all need a certain amount of water.
Kira needs to call her mom to come get her.
Which of these terms is the BEST synonym for the word "entrepreneur"?
"business owner"
"home owner"
"employee"
"student"
How does scarcity of resources contribute to international conflict?
The abundance of resources makes the distribution difficult.
Countries in possession and control of resources have economic power.
World leaders want to be seen as kind and generous with their countries resources.
Countries often compete for control over how to preserve resources in their natural state.
Which of these BEST represents capital investment for a company?
advertising
renting space
buying new equipment
hiring new employees
"Human wants are greater than the resources that are available to satisfy them." This implies the need for
working harder.
asking for less.
leaving decisions to fate.
making choices to allocate resources.
Benjamin has saved $40.00 for concert tickets, but decides to buy a new pair instead. In this scenario, what do the concert tickets MOST LIKELY represent?
capital
scarcity
opportunity cost
decreased demand
What is the opportunity cost of attending technical school versus attending a 4-year college or university?
There is no difference between the two choices.
A party atmosphere versus having to live at home.
A broad education as opposed to learning a working trade.
Both choices are equal in earning power and job opportunities.
What is the opportunity cost of saving money to purchase a car?
The cost of working hard to save money.
Th emoney you could have earned at a job.
The money could be used to go on vacation.
The cost of insurance, gas, and maintenance.
One of the main purposes of a PPC is to show
how supply and demand determine price.
whether the supply of goods is elastic or not.
the number of workers for a specific task.
how limited resources can be used to produce a combination of items.
During WWII, what was an opportunity cost of the decision to increase production of military goods?
The United States won the war.
The amount of consumer goods increased.
The amount of military goods increased.
The amount of consumer goods was reduced.
The production possibilities frontier assumes all of the these EXCEPT
opportunity costs are constant.
scarcity remains economic choices.
production of more defense goods means fewer consumer goods.
the shape of the production possibilities curve illustrates the law of increasing cost.
Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr. Stevens decides to open his sporting goods store, what is the opportunity cost of this decision?
The opportunity to rent it to another tenant.
The property tax he would pay on the building.
The opportunity he has to run his own business.
The profits he would make from his sporting goods store.
On a production possibilities curve, where would a society dealing with unemployment be producing?
Inside the curve
Low on the curve
Outside the curve
High on the curve
Katherine is facing a difficult decision between how much time she spends as a cheerleader and how much time she spends studying her economics. Which economic concept describes the problem she is facing?
Scarcity
Competition
Fiscal policy
Supply and demand
What is a rational economic decision?
One in which there are no opportunity costs.
One in which marginal benefits exceed marginal costs.
One in which marginal costs exceed marginal benefits.
One in which the benefits are unknown, but costs are low.
A company produces two products, X and Y. All of the points represent possible product output EXCEPT
Point A
Point B
Point C
Point D
How might firms BEST use marginal analysis to determine price and output when there are additional costs related to hiring a new worker?
Firms might maximize revenue by raising price or output.
Firms might minimize revenue by raising price or output.
Firms might maximize revenue by lowering price or output.
Firms might maximize revenue by lowering price or output.
Which economic concept would MOST likely account for a move on the curve from point A to point B?
Choice
Growth
Scarcity
Unemployment
"Marginal benefit" is MOST related to what economic concept?
Opportunity cost
Supply elasticity
Demand elasticity
Equilibrium price
A small company is trying to determine the best use of its resources in producing two different goods. What resource should they develop to investigate these options?
Marginal cost curve
Competitive norm curve
Supply and demand curve
Production possibilities curve
Firms use marginal analysis to determine production output levels by
adjusting production levels in accordance with information from retailers.
using comparisons with strong competitors to set production levels accordingly
trying to minimize production costs by using better and more efficient resources
studying the effect on revenue of small changes to the number of items produced.
One afternoon, you were driving home and listening to your favorite music. You were so into your music and getting home that you failed to notice your speed. The police pulled you over and gave you a ticket for driving 57 mph in a 45 mph speed zone. Your ticket costs you $245 of your hard-earned money. What is the desired positive incentive of non-distracted driving?
You have lower insurance rates and fewer changes of wrecks.
You will have higher insurance rates and more chances of wrecks.
You are more aware of your surroundings and able to avoid speed-traps.
You will be able to drive at faster speeds because you can concentrate better.
Which of these BEST explains why someone would put up a reward poster for a lost pet?
To help a lost pet find its way home
To keep someone from stealing the pet
To encourage people to look for and return the pet
To keep someone from turning in the dog to the pound
A firm conducted a market analysis and determined that a new worker should be hired. If the firm decided the price of the product needs to stay the same, what change should occur initially to maximize revenue?
The firm should increase output.
The firm should decrease output.
The firm should keep productivity the same.
The firm should raise costs other than labor.
The federal government is offering a $1,000 tax rebate for those people who purchase a new, fuel-efficient vehicle during the next tax year. Why would the government offer a tax rebate for purchasing a new, fuel-efficient vehicle?
To help jumpstart the economy.
To encourage people to buy a better car.
To help increase revenue for the government.
To encourage better use of limited resources of fossil fuels.
David wants to buy a pizza and go to the movies. However, he only has enough money to do one or the other. In order to decide what to spend his limited money on, what must David do?
Visit a bank
Apply for interest
Hire a financial adviser
Engage in a rational decision making process
If a marginal analysis concludes that the productivity of a firm is at its highest, what would the firm have to do to increase revenue?
lay off workers
increase the price of a the product
decrease the supply of the product
use materials of higher quality to make the product
Workers on an assembly line are an example of
allocation
entrepreneurs
homogenization
specialization
How does the activity in this image represent specialization?
The products being produced are specialized for each worker.
This worker is completing one of many parts of a final product.
This worker is making a product that is different from that of other workers.
This worker is performing many different steps in the production of a product.
New e-commerce businesses, including companies like eBay, focus on voluntary exchange. Which generalization BEST describes this type of commerce?
Decentralized decision-making requires large bureaucracy.
Centralized decision-making produces dramatic economic output.
Centralized decision-making results in buyers and sellers freely engaging in commerce.
Decentralized decision-making results in buyers and sellers freely engaging in commerce.
If two people are packing and delivering food, what is the most efficient way to do the job?
Both people pack and deliver as a team.
One person packs all the orders and the other delivers them.
One person packs on Monday while the other delivers and then they switch jobs.
One person packs half and delivers them; then the other packs the other half and delivers them.
In what way does specialization increase productivity?
Specialization reduces scarcity.
Specialization reduces the cost of production.
Specialization increases the demand for a product.
Specialized workers are generally more highly educated.
Although specialization increases productivity, one disadvantage is
loss of flexibility among workers.
higher costs in training workers.
a reduction in wasted time.
the loss of training time.
"Ryan tells Ty that he will give him his best Pokemon card in exchange for Ty's autographed baseball card. Ty feels this is a fair trade. However, when Ryan trades with Ty, Ryan gives him his second best Pokemon card instead."
Why was this trade not beneficial for both parties?
Ryan lied about what he was giving to Ty.
Ty lied about what he was giving to Ryan.
Baseball cards are worth more than Pokemon cards.
Pokemon cards are worth more than Baseball cards.
"Joe has purchased a new bike for $500. The taxes on the bike add another $30 to the total, making his final cost $530."
In this situation, the taxes paid by Joe are an example of
Opportunity cost
The law of supply
Voluntary exchange
Involuntary exchange
What is the primary purpose of job specialization?
regional self-sufficiency
increased consumer income
increased marginal utility
increased efficiency and productivity
In markets both parties are better off when they engage in voluntary, non-fraudulent exchange. What is the role of government in promoting such exchange?
There is no role for the government; the government only impedes exchange.
The governments role is to create legislation to prevent fraud.
The role of government is to make sure all individuals are treated equally.
The governments role is to make sellers make a profit and stay in business.
Even though Australia has great economic freedom, the government requires some products to meet safety and manufacturing standards. This means that overall Australia's economy can BEST be classified as a
mixed economy
market economy
command economy
traditional economy
Which nation's economy could be best described as a command economy, where the government determines guidelines for economic development and sets goals for economic production?
Australia
China
Japan
India
"Canada has a universal healthcare system, providing government-funded medical services to all citizens. However, the vibrant private sector helps to push an economy that is one of the world's most successful. Intense and frequent trade with the United States provides the country with great wealth."
These facts provide evidence that Canada has a
mixed economy
market economy
command economy
traditional economy
Approximately 50% of Iran's economy is planned by the nation's government, while in Israel that percentage is just over 10%. Which statement would MOST likely be true given this information?
Israel's oil industry is more profitable than Iran's.
There are more opportunities for entrepreneurs in Israel than in Iran.
Israel is more likely to be impacted by international sanctions than Iran.
High-tech industries are less-likely to be successful in Israel than they are in Iran.
"Brazil trades with the United States more than it does with any other country. Industrially, the private sector has made Brazil one of the most advanced countries in Latin America, with massive investment taking place since 1996. Still, over 1 million people live in state-owned housing and millions more are covered by government operated health care."
These facts show that Brazil has a
mixed economy
market economy
command economy
traditional economy
Despite a severely low amount of natural resources, Japan has a thriving economy. This is largely due to the freedom Japan's economy has had to explore and develop new technology. Such freedom is found in which type of economic system?
Command
Market
Socialist
Traditional
Which country has the GREATEST degree of a command economy?
Brazil
Canada
Cuba
Mexico
Under which economic system would factors of production MOST LIKELY be owned by the government?
mixed economy
natural economy
market economy
command economy
Which of these is a correct description of one of the ways in which a command economy differs from a market economy?
Market economies discourage free enterprise.
In a market economy, the government sets prices.
Command economies tend to have higher per capita GDP.
In a command economy, individuals have less economic freedom.
In which kind of government are prices determined solely by supply and demand?
Command
Market
Mixed
Traditional
In which kind of economy are prices determined solely by the government?
Command
Market
Mixed
Traditional
Why is the price system a more efficient system for allocating scarce resources than by authoritarian means, such as in command economies?
Prices and the ability to make a profit will increase the supply of the scarce resources, thereby lowering prices and increasing demand.
Prices and the ability to create supply and demand will ensure that no scarce resource gets to a government that control supply lines.
The price system is not a more efficient system for allocation of goods and services and the government is a fair and impartial distribution center.
The government is not a fair source for allocation and will cheat and steal from most people to ensure that the rich and powerful are taken care of.
In Cuba, a lottery system effectively decides who gets to purchase a car. Why would someone favor a lottery system over a price system in obtaining a desired item, such as cars?
Everyone has a chance to purchase the car since everyone can work for one.
Everyone eventually stops working to qualify for goods and services under the lottery system.
Everyone has an equal chance of having their name drawn instead of only those who can afford the car.
Everyone has an equal chance of affording a car instead of waiting on a lottery system for drawing the name.
In this type of economic system, the production of goods and services is controlled solely by the concept of supply and demand, businesses are operated for profit, and the government is not involved.
Command
Communism
Market
Mixed
What fundamental question relates most directly to consumer sovereignty?
How will the system promote progress?
What goods and services will be produced?
How will the goods and services be produced?
Where will goods or services be offered for sale?
The command systems of the Soviet Union and eastern Europe failed in mostly because
Price ceilings were too low.
Economic resources that were abundant became very scarce.
Firms manufactured more output that consumers could purchase, resulting in an economic recession.
Central planning found it difficult to arrange the decisions of consumers, suppliers, and businesses.
"The country of South Africa has a growing economy that is one of the best in Africa. South Africa's annual GDP growth rate is almost 3%. Many private businesses are flourishing in the country. South Africa produces the majority of Africa's electricity. However, one of the major threats to South Africa's economy is the shortage of electricity to all areas of the country. Fortunately, the government of South Africa is presently addressing the problem by constructing and financing new electric power stations."
What kind of economic system does South Africa have?
Capitalism
Command
Mixed
Traditional
Consumer sovereignty assumes that which fundamental statement in a market economy is true?
Buyers should be able to name their own price for goods.
Sellers should provide products that reflect a good bargain.
Through purchase choices, buyers determine the production of goods.
By investing in research and development, sellers bring new products to the market.
In a command economy, how are the prices of goods and services determined?
Business owners
Independent agencies and independent regulators
Market forces of supply and demand
The central government
Communism and socialism are usually found in what type of economic system?
Traditional
Command
Pure market
Mixed market
In a market economy, prices are established by
Decree of government agencies.
Consumers and labor unions.
The interaction of supply and demand.
Businesses which buy and sell the products.
In capitalist economies, prices are
set by the central government.
used to ensure social equality.
determined by supply and demand.
usually unfair.
Why is the consumer considered "king" in a capitalist economy?
Consumers contribute to the factor market.
Consumers determine what products will be produced.
Consumers vote for elected government officials.
Consumers own the productive resources.
How do private property rights encourage individuals to work, save, and invest?
Individuals can keep the gains they earn.
Most earning of individuals will go to the government.
Any earnings or wealth cannot be passed on through inheritance.
Most investments are guaranteed by the government.
