AnswersEAP-Economics and Personal Finance BUnit Test

Unit Test — Unit test Answers

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The chart shows the marginal cost of producing soccer nets for Sabrina’s Soccer. What is the marginal cost of producing a fifth soccer net?

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A
$1.00
B
$1.50
C
$2.00
D
$2.50
2
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True or False? Higher opportunity costs equal a greater comparative advantage.

A
True
B
False
3

To generate higher profits, producers must work to

A
increase their total supply.
B
increase their total expenses.
C
decrease their customer base.
D
decrease their production costs.
4

Sabrina’s Soccer produces soccer balls and soccer nets, which are sold at sporting goods stores. Which factors directly affect the company’s profit? Check all that apply.a stocking up on soccer cleats and uniformsa rise in the number of soccer leaguesa decrease in the cost of raw materialsthe opening of two sporting goods storesthe push for physical activities in schools

A
a stocking up on soccer cleats and uniforms
B
a rise in the number of soccer leagues
C
a decrease in the cost of raw materials
D
the opening of two sporting goods stores
E
the push for physical activities in schools
5

Profit equals the total amount of money made minus

A
the production cost.
B
the opportunity cost.
C
the revenue earned.
D
the price established.
6

Which best describes how the government sanctions technological monopolies?

A
by creating the technology itself
B
by prohibiting others from entering the market
C
by issuing a patent for the technology
D
by authorizing one producer
7

This table shows the cost of producing ice cream for several manufacturers.Manufacturer Amount Produced CostThe Dairy 100 gallons $10 Ice Cream, Inc. 100 gallons $15 Frozen Treats 150 gallons $12 Bob & Gary’s 125 gallons $15 Which manufacturer has the absolute advantage?

A
The Dairy
B
Ice Cream, Inc.
C
Frozen Treats
D
Bob & Gary’s
8

Which best describes how consumers may benefit from specialization?

A
Consumers can only purchase high-quality goods.
B
Consumers have more price options.
C
Consumers receive more sale offers.
D
Consumers find products at lower prices.
9

Who sets the price in a monopolistic competition?

A
producers and consumers
B
consumers only
C
government
D
producers only
10

What can a producer gain by specializing?

A
sales
B
new customers
C
absolute advantage
D
opportunity costs
11

Which of these best describes an opportunity cost?

A
a win-win
B
a loss
C
a chance
D
a trade-off
12

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.
13

The lack of competition within a monopoly means that

A
offered goods and services are lackluster.
B
the product’s market is small.
C
consumers must look elsewhere to find options.
D
monopolists set their own price.
14

Which calculation helps determine which producer has the absolute advantage?

A
Resources used multiplied by amount produced
B
Amount produced divided by resources used
C
Amount produced minus resources used
D
Resources used divided by amount produced
15

What is the difference between marginal cost and marginal revenue?

A
Marginal cost is the money earned from selling one more unit of a good. Marginal revenue is the money paid for producing one more unit of a good.
B
Marginal cost is the money paid for producing one more unit of a good. Marginal revenue is the money earned from selling one more unit of a good.
C
Marginal cost is the money a producer might make from one more unit. Marginal revenue is the money a producer actually makes from one more unit.
D
Marginal cost is the money a producer actually makes from one more unit. Marginal revenue is the money a producer might make from one more unit.
16

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.
17

This table shows the number of cookies several bakeries sell each day.Bakery Number of Cookies Sold Mrs. Track’s 90 Chips 100 The Bakeshop 75 Uncle John’s 125 All else being equal, which bakery has the absolute advantage?

A
Mrs. Track’s
B
Chips
C
The Bakeshop
D
Uncle John’s
18

How can producers make the most profit? Check all that apply.They can work to increase their marginal cost.They can work to decrease their marginal cost.They can raise prices to increase marginal revenue.They can lower prices to decrease marginal revenue.They can keep marginal costs below marginal revenues.They can keep marginal revenues below marginal costs.

A
They can work to increase their marginal cost.
B
They can work to decrease their marginal cost.
C
They can raise prices to increase marginal revenue.
D
They can lower prices to decrease marginal revenue.
E
They can keep marginal costs below marginal revenues.
F
They can keep marginal revenues below marginal costs.
19

Which best describes the availability of substitutes in a monopoly?

A
Price points vary.
B
There are no substitutes.
C
There are different brands.
D
Products have different features.
20

Which best describes how producers benefit from specialization?

A
Producers can increase their profits.
B
Producers can expand their market.
C
Producers can offer a wider range of goods.
D
Producers can increase sales.

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