AnswersJPS-202526-Arvada West-CO-Economics and Financial Literacy semester-CR-CATSParriottUnit Test

Elasticity and Incentives Answers

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Read the following scenario. A clothing company wants to expand into new regions. It is looking at an urban area with a large number of vacant warehouses. The population is made up of people with average educations and a lower standard of living. The company is experiencing slower sales but has hopes that product will take off and be successful. Which of the factors of production will the company need to address most closely when making its decision to expand?

A
land
B
capital
C
land and labor
D
labor and capital
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What kind of economy uses a free-enterprise system?

A
a closed economy
B
a command economy
C
a market economy
D
a traditional economy
23

When compared to a mixed-market economy, a command economy typically has

A
more private ownership.
B
more government control over production.
C
strong consumer-buying power.
D
a greater chance for a high income.
24

Which is an example of regulation in the automobile industry?

A
the creation of fuel-efficiency standards for cars
B
the installation of satellite radio systems in some cars
C
the usage of multiple-year warranties to cover repairs
D
the production of hybrid models that conserve gasoline
25

The citizens of the United States live and work in a

A
closed economy.
B
command economy.
C
mixed market economy.
D
pure market economy.
26

Venya and Kari own a flower shop that specializes in custom bouquets. Wanting to expand into selling potted plants, they create a production possibility chart to assess whether the potted plants are a good idea. Study their chart:

Question illustration
A
25
B
30
C
50
D
75
27

Which object is likely to have the most value based on the concept of scarcity?

A
a flowering plant
B
a silver necklace
C
a new coffee table
D
a crop of oranges
28

One of the three economic questions deals with deciding

A
what goods and services should be produced.
B
what the costs of production should be.
C
how goods and services will be marketed.
D
how consumers will receive products.
29

The goal of a command economy is to

A
sustain self-sufficiency.
B
preserve traditional customs.
C
create equality within a society.
D
promote free economic choices.
30

Critics of the wealth gap might argue that

A
economic growth will likely decline over time.
B
the upper classes cannot help create new jobs.
C
the wealthy become unable to make investments.
D
buying power exceeds the supply from producers.
31

A frozen foods company changes an ingredient to meet a new government standard. This is an example of

A
following a federal regulation.
B
lowering prices for customers.
C
reducing the risk for consumers.
D
creating a new product.
32

What is the best definition of ownership?

A
Ownership is the right to possess land or goods.
B
Ownership is the right to possess land alone.
C
Ownership is the right to purchase land or goods.
D
Ownership is the right to purchase goods alone.
33

The most common economic system in the world is a

A
closed economy.
B
command economy.
C
mixed market economy.
D
traditional economy.
34

Assessing opportunity cost involves

A
making choices and dealing with consequences.
B
choosing consequences over rewards.
C
reviewing past decisions and changing them.
D
minimizing profit and loss.
35

How can the government reduce the wealth gap in a mixed market economy?

A
The government can control income levels by placing limits on how much citizens can earn.
B
The government can eliminate minimum wages for workers to account for economic differences.
C
The government can improve education to provide new opportunities for workers in the lower class.
D
The government can tax members of the wealthy class at a lower rate to address differences in income.
36

In a competitive market, a furniture company decides to use cheaper materials to decrease production costs and pass on the savings. This is an example of

A
following a federal regulation.
B
lowering prices for customers.
C
reducing the risk for consumers.
D
creating a new or better product.
37

One of the three main questions of economics addresses who should

A
produce goods and services.
B
market goods and services.
C
receive goods and services.
D
distribute goods and services.
38

Which of the following is an example of a labor resource?

A
money available to be invested in a company
B
water held in a reservoir
C
a city’s population
D
electricity produced by a nearby power plant
39

What is one way a command economy affects the lives of private citizens?

A
Citizens cannot make most economic decisions.
B
Citizens can only work in factories or on farms.
C
Citizens must pay for their own health care.
D
Citizens have limited access to education.
40

This photo shows a label that appears on food products in the United States.This label is an example of

Question illustration
A
producer innovation in a market economy.
B
freedom in the free-enterprise system.
C
regulation by a government agency.
D
competition between businesses.

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