Answers26-27 Ignite Economics-KY-EconomicsCase Study: Starting a Business

Case Study: Starting a Business — Unit test Answers

25 verified answers
1
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The vertical axis of a demand curve shows

A
the price of a product.
B
the supply of a product.
C
the interest in a product.
D
the production cost of a product.
2
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The chart shows a production possibilities schedule for Sabrina’s Soccer. Which statement correctly explains the chart?

Question illustration
A
The opportunity cost of producing one soccer net is eight soccer balls.
B
The opportunity cost of producing two soccer nets is two soccer balls.
C
The opportunity cost of producing two soccer balls is one soccer net.
D
The opportunity cost of producing four soccer balls is three soccer nets.
3

Which is an example of a positive incentive for consumers?

A
a sales tax imposed by a state
B
a steady rise in profits over a year
C
a coupon clipped from a newspaper
D
an increase in price for a popular product
4

Which is an example of a product that is considered a need?

A
breakfast food
B
music player
C
sports equipment
D
video game
5

best

G
Government intervention in economic choices is strictly forbidden.
T
The government determines economic choices and makes most decisions.
T
The decisions made by producers and consumers drive all economic choices.
P
Producers and consumers make some economic choices while the government makes others.
6

Private property is land or goods

o
owned by the government.
o
owned by an individual.
u
used by state officials.
u
used for taxation.
7

How do changing prices affect supply and demand?

A
As price increases, both supply and demand increase.
B
As price decreases, both supply and demand decrease.
C
As price increases, supply decreases, but demand increases.
D
As price decreases, supply decreases, but demand increases.
8

The difference in income between the richest and poorest citizens is called

a
a command economy.
u
unemployment.
p
private property.
t
the wealth gap.
9

How do lower prices tend to affect demand?

A
They tend to increase the availability of a product.
B
They tend to decrease the availability of a product.
C
They tend to increase the interest in a product.
D
They tend to decrease the interest in a product.
10

What is one counter-argument to the premise that the wealth gap is a serious problem which needs to be addressed?

T
The lower classes have the opportunity to invest.
P
Poor people can easily move into the middle class.
I
Investments by the upper class create lower-class jobs.
B
Buying power sharply increases for the working class.
11

A reward or punishment that encourges people to behave in a certain way is called a(n)

A
want.
B
price ceiling.
C
equilibrium price.
D
incentive.
12

Which activity would a consumer most likely perform?

A
filling a lawnmower with gas
B
answering phones in an office
C
growing vegetables in a home garden
D
helping mow lawns in the neighborhood
13

What is the best definition of marginal cost?

A
the possible income from producing an additional item
B
the price of producing one additional unit of a good
C
the additional income gained from selling an additional good
D
the financial gain from business activity minus expenses
14

In a mixed market economy, property owned by the government

A
can be used by many citizens.
B
can cause economic inequality.
C
can help promote personal wealth.
D
can be used for private businesses.
15

How can knowing the future value of money help plan for a large purchase like a car?

A
It replaces the need for a loan.
B
It can predict the exact future cost of the car.
C
It guarantees a fixed interest rate for savings.
D
It can help determine the amount to save monthly.
16

What restriction would the government impose in a closed economy?

T
The government would prohibit trade with other nations.
T
The government would set the prices for imported goods.
T
The government would preserve traditional customs only.
T
The government would prevent private ownership of property.
17

The lowest amount a manufacturer can pay factory workers is an example of

A
an incentive.
B
a price floor.
C
a price ceiling.
D
an elastic service.
18

To generate higher profits, producers must work to

i
increase their total supply.
i
increase their total expenses.
d
decrease their customer base.
d
decrease their production costs.
19

What is one way for an entrepreneur to decrease risk?

A
by mimicking popular products
B
by maintaining personal flexibility
C
by creating a strong business strategy
D
by developing reliable sources for materials
20

South Avenue Publishing produces self-help books. The company’s profit is the

A
money the company earns after paying all of its production costs.
B
paper, binding, and other supplies the company purchases.
C
total amount the company receives from the sale of its books.
D
amount of money the company earns from selling a single book.

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