AnswersEconomics Full-YearIntroduction to Economics

Practice Test Answers

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1
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Why is GNI per capita a better measure of standard of living than GDP?

A
GNI per capita reflects all of the income within the economy.
B
GNI per capita indicates how much each person makes on average.
C
GNI per capita reflects the total market value of goods and services in the economy.
D
GNI per capita represents the value of goods and services in the economy.
2
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Which of these statements about opportunity cost are true? Choose three correct answers.

A
It influences consumers.
B
It assists in anticipating profits.
C
It encourages people to spread their resources around.
D
It exists because resources are scarce.
E
It influences producers.
3

What is one purpose of studying economics?

A
to determine the principles that explain why consumers buy services
B
to find reasons why some resources become scarce
C
to understand the reasons why people purchase certain goods
D
to examine principles that influence the production of goods and services
4

Land is considered a resource because it

A
requires labor to be useful.
B
is used to produce things.
C
is always available to use.
D
costs little or nothing to use.
5

Which statement best describes the function of an economic system?

A
It examines how effectively goods are being produced and how well employees are being treated.
B
It decides what should be produced, how it should be produced, and for whom it should be produced.
C
It determines how a country will spend the money it makes selling goods and services to other countries.
D
It creates regulatory organizations designed to protect owners, workers, the environment, and the country.
6

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

A
needed.
B
unlimited.
C
expensive.
D
scarce.
7

Which statement best describes a command economy?

A
The government controls all aspects of the production, distribution, and price of goods and services.
B
Buyers and sellers are free to make, sell, and buy what they want with no government interference.
C
Buyers and sellers work with the government to make economic decisions based on tradition and culture.
D
The government owns and controls some industries, while private individuals or groups own and control others.
8

Resources needed to provide goods or services are called

A
facets of production.
B
functions of production.
C
facts of production.
D
factors of production.
9

How do indicators relate to standard of living?

A
Indicators are determined by standard of living.
B
Indicators create standard of living.
C
Indicators measure standard of living.
D
Indicators comprise the measure of standard of living.
10

Opportunity cost means that something needs to be

A
given up.
B
paid for.
C
replenished.
D
ignored.
11

Which of the would be considered a nonrenewable resource?

A
wind
B
lumber
C
sun
D
petroleum
12

Which of these would be a producer?

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

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Practice Test Answers — Economics Full-Year