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1
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Which payment option would be best for the laptop and for the refrigerator?

A
rent-to-own; rent-to-own
B
installment; rent-to-own
C
save up and pay cash
D
rent-to-own; installment
2
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What does the graph show about the relationship between a product and its price?

A
As the interest in a product goes down, the price goes up.
B
As the amount of a product goes up, the price goes up.
C
As the interest in a product goes up, the price goes up.
D
As the amount of a product goes down, the price goes up.
3

What is the best definition of profit?

A
Profit is the price of producing one additional unit of a good.
B
Profit is the possible income from producing an additional item.
C
Profit is the additional income gained from selling an additional good.
D
Profit is the financial gain from business activity minus expenses.
4

Insurance offers consumers

A
income to help start a new business venture.
B
a guarantee that a business will succeed.
C
full reimbursement after business setbacks.
D
protection from the costs of unplanned events.
5

Corporate taxes are a type of

A
property tax.
B
income tax.
C
sales tax.
D
excise tax.
6

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

A
Airlines can send goods from one place to another.
B
Websites can allow consumers to purchase goods online.
C
Container ships can transport a number of goods at once.
D
Automation can create goods more cheaply and easily.
7

When entrepreneurs develop new products, other companies also experience growth because they

A
try to develop their own products.
B
create many companion products.
C
attempt to improve the product.
D
immediately copy the successful product.
8

In which situation would a savings account be the best investment to earn interest?

A
saving for retirement in 20 years
B
saving to buy a new house in seven years
C
saving to easily access the money when needed
D
saving to buy a new car in three years
9

Who was Adam Smith?

A
He was a producer who operated a factory in Scotland.
B
He was a philosopher who promoted the idea of free enterprise.
C
He was an economist who spoke against the market economy.
D
He was an official who ran an important government agency.
10

Demand-pull inflation occurs when

A
consumers begin purchasing more goods.
B
the government prints more money and pushes prices up.
C
the price of goods rises suddenly and extremely fast.
D
producers need more money to make and distribute goods.
11

A mixed-market economy is one in which

A
the government has complete control.
B
the government makes no regulations.
C
there are strict limits on economic choice.
D
there is competition and free enterprise.
12

Which best describes how advertising influences consumer choice in an oligopoly?

A
Advertising informs brand knowledge.
B
Advertising alerts consumers to price reductions.
C
Advertising undermines competition.
D
Advertising coaxes people to buy new products.
13

What is an example of scarcity

A
a choice of resources
B
limited resources
C
an abundance of resources
D
renewable resources
14

What is one example of a closed economy?

A
a barter system that does not rely on money or other currency
B
an old-fashioned system that preserves traditional choices and customs
C
a restricted system that blocks trade with international partners
D
a trade-based system that encourages the flow of goods and services
15

If Country A is an agricultural country and Country B has many cities and factories, it would make sense for

A
Country A to specialize in making cars while Country B specializes in growing corn.
B
both countries to set up car manufacturing plants.
C
Country A to specialize in growing corn while Country B specializes in making cars.
D
both countries to compete in growing more corn.
16

Besides the actual mortgage payment, which also factors into the monthly payment on a home?

A
repair costs
B
down payment
C
renters' insurance
D
property taxes
17

It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________.

A
resource cost; production cost
B
production cost; resource cost
C
opportunity cost; production cost
D
production cost; opportunity cost
18

Which best describes why a company issues stocks?

A
to increase the company’s value
B
to ensure profits
C
to increase dividends
D
to raise capital
19

The higher a country’s gross domestic product (GDP), the more likely it is that the country

A
has little debt.
B
is wealthy.
C
has high inflation.
D
is developed.
20

A company that makes mobile phones introduces a new, faster model that has strong consumer interest. However, the old model is still available. What will most likely happen to the price of the old model, and why?

A
The price will fall to discourage the producer from making more old models.
B
The price will rise to encourage consumers to buy both models in equal amounts.
C
The price will rise to encourage the producer to make more old models.
D
The price will fall to encourage consumers to continue to purchase it.

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