Font size
WorksheetsLesson 6: Economic Basics Review
Total questions: 46
Worksheet time: 23mins
Which question is one of the three basic economic questions societies must answer?
Why do people prefer certain brands most?
How should goods and services be produced?
Which country sets the global market rules?
When will new technologies be invented?
Where should resources be discovered first?
Which statement best defines economics?
The art of negotiating international treaties
The science of predicting future stock prices
The rules for trading only luxury products
The study of how people meet wants and needs
The practice of budgeting in government offices
Which option correctly matches a factor of production with its description?
Labor: work people do
Labor: buildings and equipment
Capital: natural resources like forests
Capital: the desire for a new product
Land: money used to buy machinery
A hotel providing rooms to travelers is an example of which category?
Capital used in production
Land owned by a company
Service offered by a business
Good produced for resale
Labor used for manufacturing
Which statement explains scarcity in everyday life?
Endless money removes trade-offs
Unlimited time allows all tasks
Prices never change with demand
Limited resources require choices
Producers never consider costs
What is opportunity cost when choosing to spend allowance on a game instead of going to the movies?
The friend who recommended it
The store you visited
The brand you selected
The total price you paid
The movie you give up seeing
Which pair correctly distinguishes demand from supply?
Demand: buildings owned; Supply: wages paid
Demand: work done; Supply: money invested
Demand: desire to buy; Supply: ability to produce
Demand: price set; Supply: law created
Demand: factory equipment; Supply: natural resources
If demand increases while supply stays the same, what happens to price?
Price will freeze
Price will always fall
Price will become unrelated
Price will rise
Price will disappear
If supply decreases while demand stays the same, what is the most likely price change?
Price will rise
Price will stay fixed
Price will be discounted
Price will drop sharply
Price will become unknown
Who makes and sells goods and services in an economy?
Teachers
Investors
Producers
Officials
Consumers
Which statement about marginal cost is most accurate for setting a minimum price?
It is the cost of making one more unit
It is the cost of advertising a product
It is the profit after taxes and fees
It is the total cost of all units produced
It is the highest price customers will pay
A producer stops making extra units because the sale price is less than marginal cost. What is the best reason for this decision?
Labor becomes a natural resource
Producing more would lose money
Consumers dislike low prices
Demand is always unlimited
Capital automatically increases output
Which statement best describes a market in an economic process?
A place where bartering never occurs
An institution where producers and consumers trade
A government office that sets all prices
A warehouse that stores finished goods
In past history, people most often obtained goods and services by
Using paper money and coins
Saving through banks only
Trading and bartering directly
Paying with credit cards
Which business type mainly sells goods directly to consumers?
Manufacturing industry companies
Wholesale industry warehouses
Agricultural industry farmers
Retail industry stores
Revenue for a business is
Money earned from selling goods and services
Money left after subtracting all costs
Money saved for future emergencies
Money borrowed to expand production
A company increases profit most directly by
Lowering quality and cutting customer service
Borrowing more and hiring more workers
Increasing revenue and decreasing expenses
Raising wages and lowering prices
If resources become more expensive, what is the likely effect on prices?
Prices increase due to higher production costs
Prices stay the same for most goods
Prices drop due to new competition
Prices fall because demand increases
How can increased competition affect producers of a good?
It eliminates the need to advertise
It guarantees higher prices for consumers
It always raises profits for all firms
It may lead to a decrease in profit
Which term means a general increase in prices across an economy?
Economic growth
Deflation
Inflation
Recession
A recession is best defined as
A phase of rapid economic growth
A time when competition disappears
A decline in production over months
A period of rising prices
Which statement fits a Traditional Economy?
Decisions based on customs and values
Decisions made by private companies
Highest level of government control
Decisions guided by stock markets
A key disadvantage of a Traditional Economy is
High levels of unemployment
Lower overall standard of living
Too much competition among firms
Unequal income between citizens
Which feature best matches a Market Economy?
Freedom, competition, and profit
Government sets all production
Customs determine all roles
Wealth evenly shared by citizens
A disadvantage of a Market Economy can be
Strong public ownership of services
Little innovation and low motivation
High prices and unequal income
No unemployment and equal welfare
Which description fits a Command Economy?
Mix of private and public choices
Based on customs and traditions
Decisions mainly by individuals
Highest level of government control
One advantage claimed for a Command Economy is
Strong economic freedom for all
High competition among businesses
Low taxes with private ownership
Little unemployment and shared income
In a mixed economy with socialism elements, distribution is
Decided by international trade rules
Based only on customs and barter
Controlled by the community and taxed
Controlled by private companies
Income is best defined as
Money borrowed using a credit card
Money kept by businesses after costs
Money paid as taxes to the government
Money people receive from work or savings
Banks pay interest to
Reduce competition among banks
Punish late credit payments
Encourage people to save money
Raise prices during inflation
Credit is
Cash earned from selling a product
An arrangement to borrow and repay later
A fee for using a savings plan
A tax charged on bank accounts
When using credit, interest is
Money the bank pays you yearly
A charge on the money you borrow
A bonus for paying bills early
An amount added only to savings
The cost of what you have to give up is called
demand
opportunity cost
supply
revenue
The study of how people meet their wants and needs
demand
producers
consumers
economics
People or businesses that make and sell goods or services
consumers
producers
economics
supply
lowest acceptable level
budget
principles
maximum
minimum
An economy in which the central government makes all economic decisions
market economy
command economy
traditional economy
mixed economy
An economy in which people make economic
decisions based on their groups, customs and values.
Market economy
command economy
Traditional economy
mixed economy
The trading of goods and services
barter
producers
opportunity costs
consumers
An economy in which individual consumers and
producers make economic decisions.
command economy
trade economy
market economy
traditional economy
People or businesses that buy or consume goods or services.
economy
principles
producers
consumers
A plan that shows income and expenses.
principles
opportunity costs
budget
taxes
What are the factors of production? (choose all that apply)
land
society
capital
labor
Increased competition between producers of a good may lead to
a decrease in profit.
an increase in price.
a drop in demand.
a rise in taxes.
Which of the following is a feature of a good budget?
money reserved for saving
income that is less than its expenses
economic incentives
How do companies make a profit?
They try to increase expenses and increase revenue.
They try to increase expenses and decrease revenue.
They try to decrease expenses and decrease revenue.
They try to decrease expenses and increase revenue.
