AnswersPersonal Finance and EconomicsEconomic Decision-Making and Microeconomics

Economic Decision-Making and Microeconomics — Test Answers

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What is the best definition of automation?

A
the application of scientific knowledge to find answers and fix problems
B
the use of robotic equipment in a manufacturing process
C
the hiring of workers from all over the world to manufacture goods
D
the use of resources to manufacture goods more efficiently
2
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Which is an example of a product that is considered a need?

A
sports equipment
B
music player
C
breakfast food
D
video game
3

What is the best definition of technology?

A
Technology is replacing human workers with mechanical or electronic devices.
B
Technology is applying scientific knowledge to find answers and fix problems.
C
Technology is hiring workers from all over the world to manufacture goods.
D
Technology is using fewer resources to manufacture goods more efficiently.
4

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total revenue the company makes after selling 10 boards?

A
$350
B
$400
C
$450
D
$300
5

Which best describes the availability of substitutes in a monopoly?

A
Price points vary.
B
There are no substitutes.
C
Products have different features.
D
There are different brands.
6

According to the law of supply, price and quantity move

A
along a track in the same direction.
B
along a track in opposite directions.
C
from the same point away from one another.
D
from different points toward one another.
7

Assessing opportunity cost involves

A
choosing consequences over rewards.
B
reviewing past decisions and changing them.
C
making choices and dealing with consequences.
D
minimizing profit and loss.
8

Which of the illustrates an opportunity cost?

A
Lydia does not have enough money to buy a new shirt.
B
Alyssa does not have enough time to study for her test.
C
Amir only has time to study or to play basketball.
D
James has enough money to buy some socks and a book.
9

Profit equals the total amount of money made minus

A
prices.
B
expenses.
C
revenue.
D
supply.
10

Which statements correctly explain price floors and price ceilings? Choose four correct answers.

A
Effective price ceilings are set below equilibrium.
B
Price ceilings help consumers by lowering prices.
C
Effective price floors are set above equilibrium.
D
Ineffective price ceilings tend to be too low.
E
Price floors help producers by raising prices.
F
Ineffective price floors tend to be too high.
11

Which resource is renewable?

A
coal
B
minerals
C
lumber
D
gold
12

One of the three economic questions deals with deciding

A
how goods and services will be marketed.
B
what goods and services should be produced.
C
how consumers will receive products.
D
what the costs of production should be.
13

The total amount of a product available in a market at a given price is called the

A
count.
B
supply.
C
number.
D
demand.
14

Natural monopolies occur when one producer

A
can meet the market’s entire demand.
B
creates unique products.
C
controls the method of production.
D
is the only one authorized to produce a given product.
15

What is one way that technology can improve the distribution of goods?

A
Workers can take Internet classes to gain new skills.
B
Container ships can transport a number of goods at once.
C
Automation can create goods more cheaply and easily.
D
Businesses can hire factory workers across the world.
16

Which question can help a writer analyze a prompt and develop a claim for an argumentative essay?

A
Does the conclusion restate the claim?
B
What is the main purpose of the essay?
C
Is supporting evidence included?
D
Is the claim clearly stated?
17

The most common economic system in the world is a

A
traditional economy.
B
closed economy.
C
mixed market economy.
D
command economy.
18

One of the three main questions of economics addresses who should

A
market goods and services.
B
receive goods and services.
C
produce goods and services.
D
distribute goods and services.
19

A society decides that it needs to produce more corn to feed the growing population. What must it do before it begins the production process?

A
understand who is in a position of authority to produce more
B
determine how people will receive the surplus crops
C
study the profitability of increasing corn production
D
analyze existing resources, such as water availability
20

In economics, if a good is inelastic,

A
producers have lost an interest in manufacturing it.
B
consumers have lost an interest in purchasing it.
C
its supply or demand is not sensitive to price changes.
D
its supply or demand is too sensitive to price changes.

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