AnswersEconomicsFundamental Economic Concepts: Basic Principles

Practice Test Answers

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What role do government agencies play in a mixed market economy?

A
They employ most of the workers in the economic system.
B
They regulate some aspects of production and distribution.
C
They own farms, factories, and other sources of production.
D
They run shipping companies and other sources of distribution.
3
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Resources needed to provide goods or services are called

A
facts of production.
B
functions of production.
C
factors of production.
D
facets of production.
4

Opportunity cost means that something needs to be

A
paid for.
B
ignored.
C
given up.
D
replenished.
5

In the free-enterprise system of the United States, the government

A
makes no economic decisions.
B
makes all economic decisions.
C
makes most economic decisions.
D
makes some economic decisions.
6

In a command economy, a cotton farm floods after a heavy storm. The repair work most likely will be paid by

A
the government group that runs the farm.
B
the family who owns the farm.
C
the private business that operates the farm.
D
the individual who manages the farm.
7

The factors of production attempt to instill the idea that resources are

A
expensive.
B
needed.
C
scarce.
D
unlimited.
8

Land is considered a resource because it

A
requires labor to be useful.
B
is used to produce things.
C
costs little or nothing to use.
D
is always available to use.
9

The government has the right to own all land, buildings, and factories in a

A
pure market economy.
B
closed economy.
C
command economy.
D
mixed market economy.
10

What are the cons of a mixed market economy for most citizens? Choose four correct answers.

A
There may be a sizable gap between rich and poor people.
B
Citizens often purchase their own health care and higher education.
C
It can be very difficult for citizens to start private businesses.
D
Citizens may pay higher taxes than in other economic systems.
E
There is no guarantee of steady employment for many citizens.
F
Citizens must pay for most basic necessities by themselves.
11

How does a counterclaim help support a writer’s position in an argumentative essay?

A
The counterclaim shows how the position is misleading.
B
The counterclaim shows how the opposing opinion is incorrect.
C
The counterclaim allows readers to state their own positions.
D
The counterclaim allows readers to provide their own interpretations.
12

Which of the would be considered a nonrenewable resource?

A
wind
B
lumber
C
sun
D
petroleum
13

Which situation best reflects the concept of free enterprise?

A
The government decides the minimum wage for all airline workers.
B
Consumers have a choice between two bakeries in a single city block.
C
An agency determines which supplements are safe for people to buy.
D
Local officials set the prices for all the gas stations in a community.
14

How do economists use data? Choose two correct answers.

A
to ship goods to countries all over the world
B
to follow and predict unemployment rates
C
to explain trends in production and shipping
D
to communicate with customers instantly
E
to apply automation to reduce production costs
15

Which statement best describes the body paragraphs of an argumentative essay?

A
The body paragraphs flesh out the argument and include counterclaims and evidence from research.
B
The body paragraphs acquaint readers with the topic and set up the ideas that will be presented.
C
The body paragraphs establish the focus of the essay and tell readers what the writer’s position will be.
D
The body paragraphs tie the essay together and tell readers what they have learned and should take away.
16

This graph could help the US government

A
limit production nationwide.
B
allocate natural resources.
C
address a shortage emergency.
D
make an economic prediction.

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