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Unit 1 Test
Review
SSEF1-SSEF6
What Factor of Production?
buying
tools &
equipment
Why will there always be
scarcity?
Because scarcity exists, any
strategy for allocating scarce
resources must address
5 If a government wanted to improve the
productivity of its human resources it could
A
lower interest rates to make borrowing money
easier.
invest more money in developing solar and wind
B
energy.
Ccommit to drilling for oil in protected wildlife areas.
expand funding and opportunities for college and
D technical
training.
 Acme
Furniture Manufacturers has just
purchased five Claiborne wood turning
lathe machines. This purchase BEST
represents which of the factors of
production?
 Land,
labor, capital, and entrepreneurs
are the
The amended Telemarketing and Consumer Fraud
Abuse Protection Act of 1994 states:
 A consumer [can] stop calls from all companies
within the FTC's jurisdiction by placing his or her
telephone number on a central "do-not-call"
registry... except when the consumer has an
"established business relationship" with the seller on
whose behalf the call is made. The Federal Trade
Commission's "do-not-call" registry is intended to
reduce the amount of junk mail received by
consumers.
permit telemarketing calls to new clients on the
registry.
restrict ALL telemarketing calls to consumers on the
registry list.
allow consumers to engage in voluntary transactions with
businesses.
In a market economy, prices
are established by
Aconsumers and labor unions.
B decree of government agencies.
Cthe interaction of supply and demand.
Dbusinesses which buy and sell the products.
How do private property rights
contribute to a capitalist
system?
The government owns most of the factors of
production.
High quality products and reasonable prices are
guaranteed.
Individuals are free to own the resources used to
produce goods.
Businesses can determine what to produce based
on
consumer demand.
When the allocation of goods
and services by a free market
is not efficient,
A market powers can block beneficial gains.
B monopolies can work to redistribute market equity.
C
governments can step in to resolve the market
failure.
individuals of the markets can share equitable
D
results.
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?
A bartering
B marginal analysis
C market transactions
D trade negotiations
Which of these is the MOST significant impact
of the wide availability of computers and
high-speed internet connections since the
start of the 21st century?
A an increase in television sales
B a decrease in college graduates
Cmore people teleworking from home
D renewed interest in the space program
In a market economy, prices
are established by
Aconsumers and labor unions.
B decree of government agencies.
Cthe interaction of supply and demand.
D businesses which buy and sell the products.
The MOST LIKELY incentive for
entrepreneurs to start
a new business is
A to make a profit.
B to discover a new patent.
Cto risk financial failure.
D to create a new social benefit.
Which of the following is MOST LIKELY a
result of a high unemployment rate in
the United States?
Aincreased revenues
B increased demand for consumer goods
Cincreased production of capital goods
greater government expenditures for
D
transfer payments
One advantage of a market
economy is its ability to
A limit consumer choices.
B control the price of labor.
C sell goods at a high price.
D adjust to changes over time.
A
B
C
D
8
9
10
11
A8
B 9
C 10
D 11
The owners of a local business are making a
rational decision about how many workers to hire.
How many workers would cause the marginal
costs to exceed the marginal benefits?
You and two of your friends decide to open
an e-business selling a product online. Instead
of all three partners creating the product, you
each focus on one aspect of the business.
This is MOST reflects the concept of
A
B
C
D
exports.
imports.
absolute advantage.
specialization
In what way does
specialization increase
productivity?
Specialization increases the
A
demand for a product.
Specialization reduces the cost of
B
production.
Specialized workers are generally
C
more highly educated.
D Specialization reduces scarcity.
Based on
the U.S.
Census
information
in the
graph,
annual earnings are not impacted by educational
A
attainment.
B
educational attainment has an inverse relationship to
annual earnings.
C
all workers with higher educational attainment have
higher annual earnings.
annual earnings have a generally positive correlation
D
with educational attainment.
What generalization
about educational
attainment and
annual earnings can
be made according
to the graph?
A
Investment in education can lead to higher annual
earnings.
B
Annual earnings remain constant for all educational
degrees.
C
A worker with some college earns more annually than
a worker with an Associate's degree.
D
Although a worker with a Professional degree earns
more initially, the annual earnings decrease over time.
When the amount of output
produced remains the same by a
given amount of inputs that has
decreased, the MOST LIKELY result is
A
B
overall productivity rises.
economic interdependence rises.
consumer spending on productive
C resources increases.
business spending on productive
D resources increases.
In this production
possibilities graph,
what MIGHT cause
the line (frontier) to
move to the left?
A
increased demand for
basketballs
B
a shortage of needed raw
materials
C
an increase in the number of
workers
D
increased efficiency
because of new whoopee
cushion technology
Entrepreneurs develop new goods and
services to start a business.
Why is entrepreneurship often difficult?
There is a risk that the new business may
fail.
There are laws that restrict most new
businesses.
Motivation for profit may not be the best
incentive.
Healthy competition encourages higher
quality products.
Which nation's economy could best be
described as a command economy, where
the government determines guidelines for
economic development and sets goals for
economic production?
A
Australia
B
Cuba
C
India
D
Japan
Under which economic system would
factors of production
MOST LIKELY be owned by the
government?
mixed economy
market economy
command economy
traditional economy
3
2
According to the information from the
U.S. Department of
Labor, which factor has the GREATEST
impact on raising
labor productivity?
A research & development
B education & skill
C profit sharing
D recruitment
3
3
How does the activity in this image
represent specialization?
A
The products being produced are specialized for each
worker.
B
This worker is completing one of many parts of a final
product.
C
This worker is making a product that is different from
that of other workers.
D
This worker is performing many different steps in the
production of a product.
Which South Asian country is the BEST
example of a mixed economy, in
which there are elements of both
market and command economies?
India
China
Cuba
North Korea
In a market economy, a high
price is a signal for
producers to supply less and
consumers to buy less.
producers to supply less and
consumers to buy more.
producers to supply more and
consumers to buy less.
producers to supply more and
consumers to buy more.
At the start of the 21st century in Britain,
Germany, and Russia, the basic
economic questions of what, how, and
for whom to produce were answered
by
industrial labor unions
producers and consumers.
central planning committees.
international planning
organizations.
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.
mixed economy.
market economy.
command economy.
traditional economy.
Freedom to own the factors of production,
subsidized transportation services, and
involuntary spending and investments are
examples of
mixed economies.
market economies.
command economies.
traditional economies.
Marginal benefit: what consumers would be willing to
give up in order to purchase or acquire on additional
unit of a good.
"Marginal benefit" is MOST related to what economic
concept
opportunity cost
supply elasticity
demand elasticity
equilibrium price
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?
The incentive to work will not
change.
People might feel more inclined
to work.
People might feel less inclined to
work.
There is no effect on the incentive
to work.
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.
take a similar position with a
different company.
spend money for additional
training and education.
laterally transfer to a different job
within his company.
Productivity may BEST be
defined as
the quantity of production
the amount of revenue earned
the ratio of inputs to outputs
the quality of what is produced
Which of these is the BEST example of
how the free enterprise system of the
United States promotes individual
initiative?
Men must register for selective
service.
A citizen may be called to serve
on a jury.
The legislative branch levies an
income tax.
Inventors can have their
discoveries patented.
Workers concentrating their efforts on a
limited number of tasks, thereby
increasing productivity is called
A
B
C
D
entrepreneurship.
homogenization.
sequestration.
specialization.
Which of these is an example
of how the U.S. Constitution
protects the free enterprise
system?
Congress is given the power to borrow money.
Congress is given the authority to collect taxes.
Congress is given the authority to raise and support
armies.
Congress is given the authority to grant patents and
copyrights.
•
Decentralized decision making.
Adjusts to changes in the market place.
Producers and consumers have control of the economy.
All of these are characteristics of
a traditional economy.
a socialist economy.
a command economy.
a market economy.
A government that operates a
market economy MIGHT
becomeinvolved in the
economy
to increase the profits of a specific
company.
to eliminate income inequality among
its citizens.
to make sure all products are
produced the same way.
to provide public goods and services
to its citizens.
In laissez-faire economics,
what is the role of the
government in the economy?
to regulate product quality and
consumer safety
to set prices of goods and
services
to determine what should be
produced
government stays out and does
not regulate