AnswersAA - F26 Personal Finance and EconomicsUnit Test

Unit Test — Unit test Answers

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In economics, if a good is inelastic,

A
consumers have lost an interest in purchasing it.
B
producers have lost an interest in manufacturing it.
C
its supply or demand is too sensitive to price changes.
D
its supply or demand is not sensitive to price changes.
42
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Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total profit the company earns after selling 100 boards?

A
$300
B
$350
C
$3,000
D
$3,500
43

When the US government becomes aware of economic changes, the discovery is most likely to influence

A
how the nation allocates resources.
B
how companies interest buyers.
C
how producers ship products.
D
how economists study trends.
44

Read this outline for an argumentative essay about the free enterprise system.1. The free enterprise system is helpful because it allows for freedom. A. The free enterprise system is the best economic system because it allows individuals to make their own economic decisions.2. The choices of producers and consumers rule the free enterprise system. A. Individuals have the freedom to become entrepreneurs. B. Supply and demand determine their success or failure. C. Some people say without government support only wealthy people can succeed. D. More government interference would restrict freedom and limit the chance for success.3. The free enterprise system is helpful, not harmful, because it allows people to determine their own economic fate.The underlined sentence in the outline is the

A
claim.
B
conclusion.
C
counterclaim.
D
evidence.
45

Read the paragraph below, and then decide which type of economy is being described.In this economy, community members typically use simple tools to plant and harvest crops. Food supplies are supplemented by hunting animals and gathering plant materials. Members trade with each other to obtain needed goods, as few people hold currency. Little economic growth occurs.What type of economy is being described?

A
a traditional economy
B
a free market economy
C
a mixed-market economy
D
a command economy
46

The goal of a command economy is to

A
sustain self-sufficiency.
B
preserve traditional customs.
C
create equality within a society.
D
promote free economic choices.
47

Which of the following illustrates an opportunity cost?

A
James has enough money to buy some socks and a book.
B
Alyssa does not have enough time to study for her test.
C
Amir only has time to study or to play basketball.
D
Lydia does not have enough money to buy a new shirt.
48

What restriction would the government impose in a closed economy?

A
The government would prohibit trade with other nations.
B
The government would set the prices for imported goods.
C
The government would preserve traditional customs only.
D
The government would prevent private ownership of property.
49

Which consideration must a society address when deciding for whom to produce a potentially scarce or limited resource?

A
Who can be most creative with the product?
B
Who has the largest resource pool?
C
Who has the greatest need?
D
Who can bring in the greatest profit?
50

Wellness Pharmaceuticals has released a new antidepressant, Lexabuzac. Which type of monopoly does the company most likely have on this medication?

A
natural monopoly
B
de facto monopoly
C
government monopoly
D
technological monopoly
51

Goods that are considered to be needs tend to be

A
elastic when the price changes.
B
inelastic when the price changes.
C
elastic when the supply changes.
D
inelastic when the supply changes.
52

[BLANK]

A
debts
B
profits
C
expenses
D
costs
53

What is the best definition of marginal revenue?

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
54

Which aspect of monopolistic competition gives consumers more choice?

A
Producers rely on consumer decisions to succeed.
B
Price is not an important factor.
C
Few barriers to market entry exist.
D
Producers are more concerned about selection than profits.
55

Profit equals the total amount of money made minus

A
expenses.
B
prices.
C
revenue.
D
supply.
56

How does the use of new technology in industry benefit producers more so than consumers?

A
Producers can purchase services online.
B
Producers can buy goods 24 hours a day.
C
Producers can instantly contact companies.
D
Producers can quickly transport global goods.
57

In an oligopolistic market, consumer choice is

A
nonexistent.
B
limited.
C
extensive.
D
infinite.
58

What is the best definition of technology?

A
Technology is replacing human workers with mechanical or electronic devices.
B
Technology is applying scientific knowledge to find answers and fix problems.
C
Technology is using fewer resources to manufacture goods more efficiently.
D
Technology is hiring workers from all over the world to manufacture goods.
59

On this graph, what does the green arrow represent?

Question illustration
A
an ineffective price floor set above equilibrium causing a surplus.
B
an effective price floor set below equilibrium causing a shortage.
C
an ineffective price ceiling set above equilibrium causing a surplus.
D
an effective price ceiling set below equilibrium causing a shortage.
60

What is the difference between a price floor and a price ceiling?

A
A price floor is the minimum price allowed for a good. A price ceiling is the maximum price allowed for a good.
B
A price floor is the maximum price allowed for a good. A price ceiling is the minimum price allowed for a good.
C
A price ceiling below the equilibrium price has no effect.
D
A price floor above the equilibrium price has no effect.

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