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NAEP Released Questions 2002-4
1. The price of movie tickets has increased. According to the law of demand, what is
likely to be the result?
A. Theaters will sell fewer tickets.
B. Theaters’ revenues will increase.
C. The quality of movie theaters will improve.
D. The number of videos rented will decrease.
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2. The Bodor family wants to rent a larger apartment and would like to buy new car.
They found two apartments that would meet their needs, but one costs more and has
several more desirable features. The Bodors’ current financial condition would enable
them either to rent the more expensive apartment and not buy a new car or to rent the less
expensive apartment and buy a new car. The Bodors decided to rent the more expensive
apartment. What is the opportunity cost of the decision?
A. Both the new car and the less expensive apartment
B. The new car only
C. The less expensive apartment only
D. The more expensive apartment only
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CATS Released Items: 2004
Automobile Rebate
3. An automobile manufacturer offers a rebate of $1,000 on the purchase of a new
car. This rebate has effects for both the manufacturer and the consumer.
a. Give an example of one positive and one negative effect that such rebates
have on manufacturers and consumers.
b. Explain why each example is positive or negative for the manufacturer and
consumer.
4. In a free market economy, the price and quality of goods and services are most
strongly affected by
a. advertising.
b. competition.
c. borrowing.
d. regulation.
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CATS Released items 1999
*5. When the price of gasoline goes up, what will the airlines do to continue to earn
a profit?
a. increase the prices of tickets
b. increase the pay of their employees
*Note: No. 5 was taken from the 4th grade CATS social studies section.
6. An economy in which the market and the government both play an
important role in determining the production and consumption of goods
is called a
A. traditional economy.
B. command economy.
C. mixed economy.
D. subsistence economy.
e. decrease the number of seats on the airplanes
7. Which best describes conditions when inflation is occurring?
A. money supply increases; prices
decrease
B. money supply increases; prices
increase
C. money supply remains constant;
prices decrease
D. money supply remains
8. If consumers decide to buy more
hamburgers than pizza, what will most likely happen?
A. The price of pizza will rise.
B. The price of hamburgers will fall.
C. The price of hamburgers will rise.
D. The price of hamburgers will not
change.
9. In the United States economy, who has the greatest influence on the quantity of goods
and services that is available?
A. consumers, by choosing what they will purchase
B. businesses, by deciding what and how much to produce
C. stores, by setting prices of goods
D. the government, by setting limits on production
10. Which term best describes the economic situation in which there are
unlimited wants but a limited amount of resources available to satisfy those wants?
A. deficit
B. scarcity
C. inflation
D. surplus