Download Economic Fundamentals: Practice Quiz

Goal 7 - Economic Fundamentals: Quiz
Name: ____________
1) Why is the consumer considered "king" in a
capitalist economy?
A) consumers own the productive resources.
B) consumers contribute to the factor market.
C) consumers vote for elected government
officals.
D) consumers determine what products will
be produced.
5)
2) The Acme Furniture Company has issued a
statement that they will be expanding production
to include office furniture. This statement
addresses which basic economic question?
A) What will be produced?
B) How will items be produced?
C) How much will workers be paid?
D) For whom will items be produced?
Based on the information in the table, which
statement about Peru’s economy is TRUE?
A) Peru imports and exports mainly natural
resources.
B) Peru imports and exports mainly capital
resources.
C) Peru imports mainly capital resources and
exports mainly natural resources.
D) Peru imports mainly natural resources and
exports mainly capital resources.
3) An opportunity cost is
A) usually absent in a command economy.
B) when goods are recycled into other goods.
C) the next-best alternative you give up in
order to do something else.
D) is only an issue when there is not a
scarcity of goods and resources.
4)
6) In laissez-faire economics, what is the role of
the government in the economy?
A) to help maintain competition
B) to set prices of goods and services
C) to determine what should be produced
D) to regulate product quality and consumer
safety
7) Mr. Simpson has decided to start a new
company to produce bobble-head dolls. He has
hired a contractor to build his factory and a
manager to run the company for him. Mr.
Simpson PRIMARILY represents which factor
of production?
A) capital
B) entrepreneurship
C) labor
D) land
The Center for Disease Control (CDC) evaluates
the marginal cost effectiveness of vaccinating all
people against certain diseases. If the marginal
benefit is set at $5,000, which generalization
explains why the CDC does not mandate
vaccination of 100% of the people?
A) At low vaccination coverage rates (070%), the marginal cost is greater.
B) At high vaccination coverage rates (70100%), the marginal cost is less.
C) At 100% vaccination coverage, the cost
per case prevented is less than the
marginal benefit.
D) At 100% vaccination coverage, the cost
per case prevented is greater than the
marginal benefit.
8) The new oven in Mr. Brown’s bakery allows
him to produce bread more efficiently and more
cheaply. What is the MOST LIKELY effect?
A) the price drops and the quantity demanded
decreases.
B) the price rises and the quantity demanded
decreases.
C) the price drops and the quantity demanded
increases.
D) the price rises and the quantity demanded
increases.
9) The theory that the government can best
stimulate the economy by helping businesses
produce more:
A) Marxism.
B) mercantilism.
C) Keynesian economics.
D) supply-side economics.
Goal 7 - Economic Fundamentals: Quiz
10)
The opportunity cost of a move from point A
to point B is
A) the increased production of good X.
B) the increased production of good Y.
C) the decreased production of good X.
D) the decreased production of good Y.
Name: ____________
Goal 7 - Economic Fundamentals: Quiz
Answers:
1) D
2) A
3) C
4) D
5) C
6) A
7) B
8) C
9) D
10) D
Name: ____________