AnswersEconomicsIntroduction to Economics

Practice Test Answers

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1
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This graph could help the US government

A
make an economic prediction.
B
limit production nationwide.
C
allocate natural resources.
D
address a shortage emergency.
2
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Which of the would be considered a nonrenewable resource?

A
sun
B
lumber
C
wind
D
petroleum
3

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

A
the private business that operates the farm.
B
the family who owns the farm.
C
the government group that runs the farm.
D
the individual who manages the farm.
4

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

A
They regulate some aspects of production and distribution.
B
They run shipping companies and other sources of distribution.
C
They own farms, factories, and other sources of production.
D
They employ most of the workers in the economic system.
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

Land is considered a resource because it

A
requires labor to be useful.
B
is always available to use.
C
costs little or nothing to use.
D
is used to produce things.
7

Opportunity cost means that something needs to be

A
given up.
B
ignored.
C
replenished.
D
paid for.
8

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

A
pure market economy.
B
closed economy.
C
mixed market economy.
D
command economy.
9

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

A
Citizens often purchase their own health care and higher education.
B
There is no guarantee of steady employment for many citizens.
C
There may be a sizable gap between rich and poor people.
D
Citizens must pay for most basic necessities by themselves.
E
It can be very difficult for citizens to start private businesses.
F
Citizens may pay higher taxes than in other economic systems.
10

Resources needed to provide goods or services are called

A
functions of production.
B
factors of production.
C
facts of production.
D
facets of production.
11

Which situation best reflects the concept of free enterprise?

A
The government decides the minimum wage for all airline workers.
B
Local officials set the prices for all the gas stations in a community.
C
Consumers have a choice between two bakeries in a single city block.
D
An agency determines which supplements are safe for people to buy.
12

How do economists use data? Choose two correct answers.

A
to communicate with customers instantly
B
to explain trends in production and shipping
C
to ship goods to countries all over the world
D
to follow and predict unemployment rates
E
to apply automation to reduce production costs
13

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

A
expensive.
B
scarce.
C
needed.
D
unlimited.
14

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Answer:

three

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