WorksheetsUnit 1 Practice Test
Total questions: 40
Worksheet time: 33mins
Scarcity exists because people have ___ and resources are ___.
limited wants; unlimited
unlimited wants; limited
limited wants; limited
unlimited wants; unlimited
You have Saturday free: work a shift, study for a test, or attend a game. You choose to study. Your opportunity cost is:
the money you earn working
the game you didn’t attend
the next best alternative you gave up
nothing, because studying is free
Which is an example of land (natural resource)?
A delivery van
A manager
An oil field
A spreadsheet
Which is an example of physical capital?
A welding robot in a factory
The welder’s skills
The CEO
A paycheck
The person who organizes resources and takes risks to start a business is the:
laborer
lender
entrepreneur
accountant
A student considers working one more hour. The student should do it if the marginal benefit ___ the marginal cost.
equals
is less than
is greater than
is unrelated to
Choosing a new car loan with a low monthly payment but longer term mainly involves which trade-off?
Lower total interest paid
Higher total interest paid over time
No impact on interest
No impact on budget
Your employer offers a 5% 401(k) match. This is best described as a(n):
sunk cost
disincentive to save
monetary incentive to save
nonmonetary incentive
You already paid $30 for a concert ticket you can’t resell. Deciding whether to go should be based on:
the $30 sunk cost
marginal benefits vs. marginal costs of going now
the artist’s last album
how many friends are going
A nonmonetary incentive example is:
a cash bonus
free pizza for volunteers
an interest payment
overtime pay
If Country A can produce a good at a lower opportunity cost than Country B, A has:
absolute advantage
comparative advantage
price advantage
productivity advantage only
Voluntary exchange between buyers and sellers typically makes:
only buyers better off
only sellers better off
both parties better off
both parties worse off
Specialization usually leads to:
lower productivity
higher productivity and output
less trade
higher opportunity cost for all tasks
In markets, prices primarily act as:
government commands
random outcomes
signals that coordinate buyers and sellers
barriers to trade
A command economy is characterized by:
private ownership and price signals
government ownership and central planning
only traditional customs guiding production
purely voluntary exchange
The U.S. economy is best described as a:
pure market economy
pure command economy
traditional economy
mixed market economy
Private property rights tend to encourage:
less investment and less growth
more investment and entrepreneurship
central planning
no trade
The profit motive in a market economy primarily:
reduces innovation
encourages efficiency and innovation
eliminates competition
makes prices illegal
Competition among firms generally leads to:
higher prices and lower quality
lower prices and/or better quality
fewer choices for consumers
no effect on consumers
When prices rise in a competitive market, producers are typically incentivized to:
reduce supply
exit the market
supply more
ignore prices
Within a company, assigning workers to tasks they do best is called:
central planning
specialization of labor
price fixing
rationing
Two students trade: one tutors math; the other edits essays. After trading, both have more time and better grades. This illustrates:
zero-sum exchange
comparative disadvantage
gains from trade
price ceilings
A store offers “buy one, get one 50% off.” This primarily uses what to influence behavior?
regulation
incentive
price floor
tax
You’re debating a gym add-on that costs $10/month for extra classes. Rational choice says buy it only if your monthly marginal benefit is:
< $10
= $10
≥ $10
unrelated to $10
The opportunity cost of attending college most directly includes:
tuition only
tuition plus books only
tuition, books, and foregone earnings
none of the above
Which economic system gives the most room for entrepreneurship and profit seeking?
command
traditional
market
rationing
You can work 2 more hours tonight at $15/hour but would lose 2 hours of study worth an expected +5 points on your test. You choose to work. According to marginal thinking, you revealed that you value:
$30 less than +5 points
$30 equal to +5 points
$30 more than +5 points
money and grades equally
Opportunity cost is the value of the _________________________________ when a choice is made.
most expensive option
best possible outcome
next best alternative foregone
least valuable choice
The four factors of production are ____________________, ____________________, ____________________, and ____________________.
When people focus on a limited range of tasks to become more efficient, it is called (a) .
The curve that shows trade-offs between two goods given limited resources is the ______________________________.
In a market economy, prices act as (a) that coordinate consumers and producers.
Rational decision-making compares marginal ____________________ and marginal ____________________.
(a)
An economy where the government makes most economic decisions and owns many resources is a (a) economy.
The extra benefit from consuming or producing one more unit is called marginal (a) .
When two sides trade voluntarily, total (a) (or welfare) generally increases.
Choosing to save because of an employer match is responding to an (a) .
Which of the following best describes a mixed economy?
What is the main reason people and societies must make choices?
When a business invests in new machinery to increase output, this is an example of improving:
