TEST on SOL: CE.11 Economic Concepts 40 Questions 1. Scarcity means that A. there is plenty for everyone. B. inflation is up. C. supply and demand are at market equilibrium. D. we are unable to satisfy all of our wants and needs because resources and goods are limited. 2. Scarcity causes consumers to A. buy items that are on sale. B. make choices about their wants and needs. C. reinvest their profits. D. charge more for labor. 3. All are examples of resources used in production EXCEPT - A. human. B. natural. C. capital. D. historical. 4. Factors such as labor, lumber, and machinery that are used during production are known as: A. prices. B. resources. C. opportunity costs. D. competition.
5. You decide to buy a Coke instead of a Pepsi. What is value of the Pepsi you gave up called? A. Supply B. Demand C. Resources D. Opportunity Cost 6. Olivia normally works after school on Mondays and Wednesdays. Which is her opportunity cost if she adds Tuesday and Thursday afternoons to her work schedule? A. The extra money she could earn B. The additional hours she spends at the job C. The time she could spend studying D. The new clothes she could buy 7. The price of a product is the amount of money exchanged for the good. What determines the price of these goods? A. manufacturers of the product B. store owners C. distributors of the product D. supply and demand for the item Free Financing Tax Credits 20% Off Buy One Get One Free 8. The box above shows which principle of the American economic system in action? A. Opportunity cost B. Incentives C. Scarcity D. Monopolies 9. What can manufacturers do to encourage or motivate consumers to purchase their product? A. Increase production of that item B. Offer incentives on the product C. Reduce advertising of the product D. Change the size of the product
10. The amount of goods on hand that producers can sell to consumers is known as A. supply B. demand C. opportunity cost D. scarcity 11. Which economic concept is represented by the vehicle in this cartoon? A. Profit B. Demand C. Incentive D. Trade 12. Only one store in Collinsville sells a new popular toy. The store only has a few of the toy left, and they cannot get anymore. What will probably happen? A. The store will close. B. The price of the toy will go up. C. People will lose interest in the toy. D. No one will buy the toy.
TITLE? more products = low prices fewer products = higher prices more demand = higher prices less demand = lower prices 13. What would be the BEST title for the text box? A. Factors of production B. Economic systems C. Supply and Demand Determine Price D. Production and Distribution Use the chart below to answer #14-15 14. What information can be obtained from the chart above about oil consumption? A. The United States produces more oil than any other nation. B. The United States uses more oil than any other nation. C. The United States possesses more oil reserves than any other nation. D. Russia combined uses more oil than the U.S. 15. What would be the effect on the United States economy if a major disaster reduced the supply of oil available? A. Consumers of oil producing nations would reduce their use. B. United States consumers would pay higher prices. C. Consumers would not use other energy sources. D. Consumers would continue using oil with no change to the economy.
16. Which one of these is an advantage of competition in an economy? A. lower prices and better quality products B. it can always be regulated by the government C. it will raise the price and lower the quality of goods D. it increases supply and demand 17. What economic characteristic is demonstrated in the picture? A. competition results in lower prices B. competition limits supply C. competition offers governmental guarantees D. competition eliminates demand 18. Competition, a driving factor in a market economy, usually results in all EXCEPT A. lower prices. B. better quality. C. fewer sales. D. greater choice. 19. People risk their money and other resources to start a business to A. eliminate wholesalers. B. increase opportunity cost. C. avoid scarcity. D. make a profit. 20. How does a business calculate its profit? A. net worth minus earnings. B. earnings minus expenses. C. price per share of stock. D. investment divided by income.
21. The type of economy a country has is determined by - A. the amount government is involved in decision-making and planning. B. number of consumers and producers in the market place. C. profit motive of its people. D. vote of its citizens. Individuals and businesses as decision makers for private sector Government as decision maker in the public sector 22. What type of economy involves all three of the groups above in decision-making? A. Traditional B. Command C. Mixed D. Free market 23. When the government in a command economy decides what to produce, what is this called? A. consumer sovereignty B. trade-offs C. central planning D. markets 24. Joseph works as a cattle farmer because his father did the same job, even though he has excellent skills as a computer programmer. What type of economic system does Joseph live in? A. Traditional B. Mixed C. Free D. Command 25. What type of economy exists in Cuba where a communist government decides what is produced? A. Free market B. Mixed C. Traditional D. Command
26. Which economic system would government committees decide the price of goods? A. Traditional B. Command C. Free market D. Socialist 27. A free market economy is best known for: A. very little government interference. B. government controlled prices. C. frequent shortages. D. limited choice. 28. Which of the following best describes a traditional economy? A. The government totally controls the economy. B. The economy is based on customs and most people perform the same kind of work as their parents. C. Businesses, individuals, and the government share in the decision-making for the economy. D. The government has almost no influence on the economy. 1. Private ownership of businesses 2. Profit motive 3. Individual choice 4. Few government restrictions 29. Which economic system is described above? A. Traditional economy B. Mixed economy C. Command economy D. Free Market economy 30. An advantage of competition in a mixed economy is that it - A. will lower the price and increase the quality of goods. B. can always be regulated by the government. C. will raise the price and lower the quality of goods. D. increases supply and demand.
31. Which type of economic system allows individuals to invest capital in a business in order to make a profit and can also be called capitalism? A. Traditional economy B. Free market economy C. Command economy D. Marxist economy 32. In what two types of economies does the consumer have the most impact on what is produced? A. Mixed and free market B. Free market and command C. Command and centrally-planned D. Traditional and command COMMAND ECONOMY Central ownership of property Central ownership of resources Centrally-planned economy??? 33. What completes the table? A. Competition B. Profit C. Consumer sovereignty D. Lack of consumer choice 34. Which BEST describes a free market economy? A. Markets are allowed to operate with minimal interference from government. B. Market prices and product selection are determined by government. C. Competition is not allowed by the government. D. The government owns all property and means of production. 35. Whose role is greater in a mixed economy than in a free market economy? A. individuals B. businesses C. bankers D. government
36. Most economies today are A. command. B. mixed. C. free. D. traditional. 37. In the United States, economic decisions are made by A. the government. B. the people. C. Businesses, people and government. D. stock brokers 38. In the American economy, buyers determine what is produced by the purchases they make. The power of the buyer is known as- A. consumer sovereignty. B. opportunity cost. C. incentives. D. capital resources. 39. Which one of these is NOT a characteristic of the economy of the United States? A. Consumers determine through their purchases what goods and services are produced. B. Most decisions regarding the production of goods and services are made by the government. C. Competition plays an important role in determining price and quality of goods and services. D. Individuals and businesses can own private property.??? What will be produced? Who will produce it? For whom will it be produced? 40. What is the best title for this graphic organizer? A. The three basic questions of proprietorship B. The three basic questions of scarcity C. The three basic questions of economics D. The three basic questions of entrepreneurship