AnswersEconomicsFundamental Economic Concepts: Basic Principles

Fundamental Economic Concepts: Basic Principles — Test Answers

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1
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What kind of economy uses a free-enterprise system?

A
a closed economy
B
a traditional economy
C
a command economy
D
a market economy
2
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The most common economic system in the world is a

A
traditional economy.
B
closed economy.
C
command economy.
D
mixed market economy.
3

How does a command economy differ from a mixed market economy?

A
In a command economy, citizens have more property rights. In a mixed market economy, citizens have fewer property rights.
B
In a command economy, citizens own all public property. In a mixed market economy, the government owns all private property.
C
In a command economy, citizens own all private property. In a mixed market economy, the government owns all public property
D
In a command economy, citizens have fewer property rights. In a mixed market economy, citizens have more property rights.
4

Assessing opportunity cost involves

A
making choices and dealing with consequences.
B
reviewing past decisions and changing them.
C
minimizing profit and loss.
D
choosing consequences over rewards.
5

Which resource is renewable?

A
coal
B
minerals
C
lumber
D
gold
6

What is the best definition of technology?

A
Technology is using fewer resources to manufacture goods more efficiently.
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 replacing human workers with mechanical or electronic devices.
7

In a free-enterprise system, consumers decide

A
which goods to export.
B
how to set prices.
C
which services to buy.
D
how to use materials.
8

One method for studying opportunity cost is to think in terms of

A
risk and ability.
B
pros and cons.
C
tradeoffs.
D
trial and error.
9

What is the best definition of automation?

A
the use of robotic equipment in a manufacturing process
B
the use of resources to manufacture goods more efficiently
C
the application of scientific knowledge to find answers and fix problems
D
the hiring of workers from all over the world to manufacture goods
10

Private property is land or goods

A
used for taxation.
B
used by state officials.
C
owned by the government.
D
owned by an individual.
11

Which statement best describes a command economy?

A
The decisions made by producers and consumers drive all economic choices.
B
Government intervention in economic choices is strictly forbidden.
C
The government determines economic choices and makes most decisions.
D
Producers and consumers make some economic choices while the government makes others.
12

What is the second step in the prewriting process for an argumentative essay?

A
forming a claim
B
creating an outline
C
developing an opinion
D
finding evidence
13

One of the main questions of economics involves deciding upon the method for

A
creating goods and services.
B
distributing goods and services.
C
pricing goods and services.
D
enhancing goods and services.
14

Which of the could be considered both a renewable resource and a nonrenewable resource?

A
iron ore
B
solar energy
C
wheat crop
D
sea water
15

Which statement best describes a pure market economy?

A
The government determines economic choices and makes most decisions.
B
Producer intervention in economic choices is strictly forbidden.
C
Producers and consumers make some economic choices while the government makes others.
D
The decisions made by producers and consumers drive all economic choices.
16

One of the three main questions of economics addresses who should

A
receive goods and services.
B
market goods and services.
C
distribute goods and services.
D
produce goods and services.
17

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
Is the claim clearly stated?
C
Is supporting evidence included?
D
What is the main purpose of the essay?
18

In free-enterprise systems around the world, there are

A
no restrictions on business ownership or business activity.
B
some restrictions on business ownership but not on business activity.
C
some restrictions on business ownership and business activity.
D
some restrictions on business activity but not on business ownership.
19

What is the best definition of ownership?

A
Ownership is the right to possess land or goods.
B
Ownership is the right to purchase land or goods.
C
Ownership is the right to possess land alone.
D
Ownership is the right to purchase goods alone.
20

Which of the illustrates an opportunity cost?

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

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