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Name: ____________________________Date: _________________Economics – Unit 1 & 2 Test1.?What does the term human capital mean?A.Time spent producing goods and services.B.Resources that are made and used to make other goods and servicesC.The place where the company is located.D. Labor used in the production of goods and services.2.?A production possibilities graph looks at which of the following?A.The scarcity of resourcesB.The various combinations of amounts of two commodities that an economy can produce.C.Increasing costs for production over a time period.D. Factors of production used by an economy.3.?Which of the following is a public good?A.National parkB.RestaurantC.MuseumD.Car dealership4.?What is one advantage of a free market?A.It can help encourage growth.B.It is very easy to regulate and make changes.C.It protects the poor and less fortunate.D.It provides free goods to everyone.5.?What is the incentive for manufacturers selling a product?A.Trying to be the most popular store.BC.D.Trying to make the customer as happy as possibleMaking a profit for what they sell.High spending on the best materials. .6.?What does the term efficiency mean?A.Making the most of one good for consumers.B.Using resources to reach the maximum amount of output possible.C.D.Making the most money possible on a good or service.Incurring the least return on investment.7.?Which example of?limited amounts?of the following would lead to a shortage?A.Labor that is available because workers are employed at another business.B.Food that is available because of a truckers strike.C.D.Food that is available because no one wants to buy it.Gas that is available because of high prices.8.?Which of the following is not a key economic question?A.What good and services should be produced?B.Who consumes these goods and services?C.How should it be ensured that goods and services are paid for?D.How should goods and services be produced?9.?Business that are struggling to gain consumer's business experience --A.trade-offB.petitionD.monopoly10.?If you built a brand new store for your business what would that be an example of?A.Physical capitalB.TechnologyC.D.Human capitalProduction11.?What does the term guns and butter mean?A.How the military is supported through the government.B.Whether or not a country spends its money on public services or the military.C.D.How the economy is run by food production and domestic spending.Whether or not businesses spend money on public goods.12.?What does the term opportunity cost mean?A.All of the different decisions that could be made.B.The desire to produce goods and services.C.The best way that someone can decide a questionD.The most desirable alternative that is given up for a decision.13.?What are the factors of production?A.The trade-offs companies make with consumers.B.The amount of goods we take in versus the amount that we send out.C.D.The resources used to produce all goods.The public goods government make available.14.?Which of the statements below is a characteristic of a centrally planned economy?ernment makes all economic decisions.B.Each factory sets its own goals.C.D.Each person gets to choose their own job.Businesses plan economic systems.15.?What is a benefit of specialization for the economy?A.Gets rid of unemploymentB.Leads to more competitionC.Helps to make it more efficient16.?Who was a free market philosopher known as the “Father of Economics”?A.Vladimir LeninB.Karl MarxC.Adam Smith17.?What leads to the fact that all good and services are scarce?A.Some goods and services have a higher cost than others.B.Needs and wants determine what is valuable.C.D.All resources are scarce.Production of goods is not possible without resources.18.?Which of the following would show an efficient economy?A.Production of goods for profit.B.Use of the least costly amount of resources available.C.Has a small amount of people who do not work.D.Resources are used to make the most goods and services possible.19.?Why does the frontier of a production possibilities curve when graphed?A.The highest amount of output of goods and services.B.How technologically sound the economy is.C.D.The higher costs which leads to less output.Maximizing profits.20.?Why do we use production possibilities graphs?A.B.C.D.Allows us to look at different ways of using our resourcesTo show how unproductive workers are being.To increase the economy’s output of goods.To decrease production of scarce goods.The Supply Curve is upward-sloping because:As the price increases, so do costs.As the price increases, consumers demand less.As the price increases, suppliers can earn higher levels of profit or justify higher marginal costs to produce more.A supply curve does not exist in the market.Part of the reason that LeBron earns millions of dollars each year while school teachers may earn $40,000 is becauseThe supply of superstar basketball players is very low, while the supply of competent teachers is much larger.Demand for Michael Jordan's talents is very high since he can generate so much revenue for a firm.Consumers enjoy basketball to the point that they are willing to spend lots of money and time attending games and watching commercials.All of the Above When college students leave town for the summer, the demand for meals at the local restaurants declines. This results ina decrease in equilibrium price and an increase in quantity.an increase in equilibrium price and quantity.a decrease in equilibrium price and quantity.an increase in equilibrium price, and a decrease in quantity.All the following shift the demand curve for automobiles to the right except:the local factory gives a big raise to its employees.a brand new automobile dealership opens in town.the price of gasoline falls.None of the Above If the cost of computer components falls, thenthe demand curve for computers shifts to the right.the demand curve for computers shifts to the left.the supply curve for computers shifts to the rightthe supply curve for computers shifts to the left.What happens in the market for airline travel when the price of traveling by rail decreases?The demand curve shifts left.The demand curve shifts right.The supply curve shifts left.The supply curve shifts right.If a tax increase is placed on sales of cars,the demand curve shifts to the left.the demand curve shifts to the right.the supply curve shifts to the left.the supply curve shifts to the right.28. Which is a question that nations answer when determining their type of economic system?A. Who gets to consume the goods and services that are produced?B. What goods and services will be produced?C. How will the goods and services be produced?D. all of the above29. The income people receive for supplying factors of production such as land, labor, and capital iscalled _______________.A. factor payments B. factor inputsC. factors of production D. factor market30. Which of the following is NOT an economic goal or value that guides a nation’s economic system?A. economic equity B. economic marketC. economic freedom D. economic efficiency31. A group of people buying and selling goods or services. This is the definition for:A. DemandB. EquilibriumC. MarketD. Supply32. In the Law of Supply an increase in price results in:A. Decrease of quantity suppliedB. Increase of quantity suppliedC. Decrease of quantity demandedD. Increase of quantity demanded33. The desire to own a product and the ability/ willingness to pay for it. This is the definition for:A. SupplyB. ElasticityC. DemandD. Market34. Refer to the graphs below. Which move best illustrates a change in quantity demanded?The move from b to c on the graph in the left side.The move from b to d on the graph in the right side.A combination of the two moves above.None of the above.35. The change in consumption resulting from a change in the price of one good relative to the price of other goods is known as: The price effect.The income effect.The substitution effect.The real-nominal effect of a price change.36. The model of supply and demand explains how a perfectly competitive market operates. A perfectly competitive market: has a very large number of firms.is a market where each firm produces a different version of the same product.is a market in which large business firms produce large amounts of output and have a strong influence over price.All of the above.37. The demand schedule is: a curve that shows the relationship between price and quantity demanded, ceteris paribus.a table that shows the relationship between price and quantity demanded, ceteris paribus.a list of time periods during which the quantity of a good is demanded.the order in which individual consumers arrive to demand a good or service.38. A good used in conjunction with another good is known as: A complementary good.An inferior good.A public good.A private good.39. Refer to the graphs below. Which of the following moves best describes a change in supply?A. The move from e to f on the graph in the left side.B. The move from e to g on the graph in the right side.C. Either move. Both moves above illustrate a change in supply.D. A change in supply is actually a combination of the moves described in each graph.40. Which of the following states that the quantity supplied of a good rises when the price of the good rises?Quantity DemandedQuantity SuppliedThe Law of DemandThe Law of Supply ................
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