AnswersEconomics and Personal FinanceIntroduction to Economics

Practice Test Answers

20 verified answers
1
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What is one purpose of studying economics?

A
to find reasons why some resources become scarce
B
to examine principles that influence the production of goods and services
C
to determine the principles that explain why consumers buy services
D
to understand the reasons why people purchase certain goods
2
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Resources needed to provide goods or services are called

A
factors of production.
B
facets of production.
C
facts of production.
D
functions of production.
3

Which of these statements about opportunity cost are true? Choose three correct answers.

A
It influences consumers.
B
It exists because resources are scarce.
C
It influences producers.
D
It encourages people to spread their resources around.
E
It assists in anticipating profits.
4

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

A
It can be very difficult for citizens to start private businesses.
B
Citizens must pay for most basic necessities by themselves.
C
There is no guarantee of steady employment for many citizens.
D
There may be a sizable gap between rich and poor people.
E
Citizens often purchase their own health care and higher education.
F
Citizens may pay higher taxes than in other economic systems.
5

Land is considered a resource because it

A
is always available to use.
B
requires labor to be useful.
C
costs little or nothing to use.
D
is used to produce things.
6

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

A
closed economy.
B
command economy.
C
mixed market economy.
D
pure market economy.
7

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.
8

Which situation best reflects the concept of free enterprise?

A
An agency determines which supplements are safe for people to buy.
B
Consumers have a choice between two bakeries in a single city block.
C
Local officials set the prices for all the gas stations in a community.
D
The government decides the minimum wage for all airline workers.
9

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 must pay for most basic necessities by themselves.
E
There is no guarantee of steady employment for many citizens.
F
Citizens may pay higher taxes than in other economic systems.
10

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

A
They employ most of the workers in the economic system.
B
They own farms, factories, and other sources of production.
C
They run shipping companies and other sources of distribution.
D
They regulate some aspects of production and distribution.
11

Opportunity cost means that something needs to be

A
ignored.
B
given up.
C
paid for.
D
replenished.
12

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.
13

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

A
The counterclaim shows how the opposing opinion is incorrect.
B
The counterclaim allows readers to provide their own interpretations.
C
The counterclaim allows readers to state their own positions.
D
The counterclaim shows how the position is misleading.
14

Which of the would be considered a nonrenewable resource?

A
petroleum
B
wind
C
sun
D
lumber
15

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

A
The body paragraphs tie the essay together and tell readers what they have learned and should take away.
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 flesh out the argument and include counterclaims and evidence from research.
16

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

A
expensive.
B
scarce.
C
unlimited.
D
needed.
17

Which of these would be a producer?

A
someone owning a book store
B
someone putting gas in a car
C
someone waiting in line at a bank
D
someone shopping in a grocery store
18

How do economists use data? Choose two correct answers.

A
to follow and predict unemployment rates
B
to ship goods to countries all over the world
C
to explain trends in production and shipping
D
to apply automation to reduce production costs
E
to communicate with customers instantly
19

Which phrase best describes frame of reference?

A
the context of a source that drives its overall perspective
B
overall way of thinking in a source based on context, choices, actions, and their effects
C
overall writing style in a source based on context, choices, course of action, and its effects
D
the credibility of an author based on credentials and experience
20

What is a disadvantage of using secondary sources?

A
They include multiple perspectives.
B
They can be difficult to read.
C
They provide real-time data.
D
They can introduce biased opinions.

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