Economics Basics Practice
1. How does scarcity affect producers? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review scarcity in Scarcity and Choice.
Unselected answer (0 pts) Limited costs prevent producers from hiking prices.
Unselected answer (0 pts) Limited demand prevents producers from offering low prices.
Unselected answer (0 pts) Limited time prevents producers from finding the best employees.
Correct answer (1 pt) Limited resources prevent producers from making unlimited products.
1 /1 point
2. Which statement best explains the relationship between economic wants and needs? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review economic wants and needs in Scarcity and Choice.
Unselected answer (0 pts) People do not need to fulfill either their needs or their wants to survive.
Unselected answer (0 pts) People must fulfill their wants to survive, but they do not need to fulfill their needs to survive.
Correct answer (1 pt) People must fulfill their needs to survive, but they do not need to fulfill their wants to survive.
Unselected answer (0 pts) People must fulfill both their needs and their wants to survive.
1 /1 point
3. Which statement describes how governments deal with scarcity? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review economic decision making in Economic Decision Making.
Unselected answer (0 pts) choosing to fill needs rather than wants
Unselected answer (0 pts) choosing options that best match supply with demand
Unselected answer (0 pts) choosing options that employ the largest number of people
Correct answer (1 pt) choosing options with the greatest benefits to the people
1 /1 point
4. Which situation is more likely to occur in a command economy than a market economy? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review market and command economies in Distributing Goods and Services.
Unselected answer (0 pts) A factory lays off unneeded workers.
Unselected answer (0 pts) A farm sells fruit by the side of the road.
Unselected answer (0 pts) A union negotiates a better pay rate with employers.
Correct answer (1 pt) A failing railroad receives assistance from around the country.
1 /1 point
5. Which of these states a basic economic question? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review the three basic economic questions in Distributing Goods and Services.
Unselected answer (0 pts) What job is the best?
Unselected answer (0 pts) How much should this good cost?
Correct answer (1 pt) What goods should be produced?
Unselected answer (0 pts) Why should people learn about economics?
1 /1 point
6. Which of these is an example of a non-monetary incentive? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review types of incentives in Incentives.
Unselected answer (0 pts) earning payment for walking a neighbor's dog
Correct answer (1 pt) being named on the school honor roll
Unselected answer (0 pts) getting $10.00 as a prize for finishing first
Unselected answer (0 pts) winning a scholarship to attend a summer camp
1 /1 point
7. What is a tariff? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review free trade and trade barriers in Trade.
Unselected answer (0 pts) a tax on exports
Correct answer (1 pt) a tax on imports
Unselected answer (0 pts) a bonus to producers
Unselected answer (0 pts) a rebate for consumers
1 /1 point
8. How are producers different from consumers? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review producers and consumers in Specialization.
Unselected answer (0 pts) Producers want to buy products from consumers.
Unselected answer (0 pts) Producers want low demand for goods.
Unselected answer (0 pts) Producers want high costs of resources.
Correct answer (1 pt) Producers want a high quantity of sales.
1 /1 point
9. Which is true of relative prices? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review market, relative, and equilibrium prices in Market and Prices.
Unselected answer (0 pts) They are prices set by buyers and sellers.
Correct answer (1 pt) They describe prices in relation to each other.
Unselected answer (0 pts) They tell where the supply of a good meets its demand.
Unselected answer (0 pts) They help avoid shortages and surpluses.
1 /1 point
10. When do the laws of supply and demand have less effect on prices? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review demand and supply in Role of Prices.
Unselected answer (0 pts) when a good or service is new
Unselected answer (0 pts) when outside factors cause changes
Correct answer (1 pt) when buyers search for substitutes
Unselected answer (0 pts) when sellers want to make more money
1 /1 point
11. Which factor of a market economy helps people feel safe when making business investments? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review the market economy in Competition in Markets.
Correct answer (1 pt) strong property rights
Unselected answer (0 pts) freedom of enterprise
Unselected answer (0 pts) consumer choice
Unselected answer (0 pts) limited role of government
1 /1 point
12. Which problem would most likely result if banks did not exist? (1 point)
Review Guidelines:
If you guessed the answer to this question, or did not answer it correctly, go back and review the function of banks in Economic Institutions.
Unselected answer (0 pts) People would no longer be able to save money.
Correct answer (1 pt) Money would not move through the economy very well.
Unselected answer (0 pts) Spending money would become much more difficult.
Unselected answer (0 pts) Buyers and sellers would no longer use money in markets.
Which problem Would most likely result if banks did not exist
1. Scarcity affects producers by limiting their resources and preventing them from making unlimited products.
2. The relationship between economic wants and needs is that people must fulfill their needs to survive, but they do not need to fulfill their wants to survive.
3. Governments deal with scarcity by choosing options with the greatest benefits to the people.
4. In a command economy, a failing railroad receiving assistance from around the country is more likely to occur than in a market economy.
5. A basic economic question is "What goods should be produced?"
6. Being named on the school honor roll is an example of a non-monetary incentive.
7. A tariff is a tax on imports.
8. Producers are different from consumers in that producers want a high quantity of sales.
9. Relative prices describe prices in relation to each other.
10. The laws of supply and demand have less effect on prices when buyers search for substitutes.
11. Strong property rights in a market economy help people feel safe when making business investments.
12. If banks did not exist, money would not move through the economy very well.
1. How does scarcity affect producers? (1 point)
Answer: Limited resources prevent producers from making unlimited products.
Explanation: Scarcity refers to the limited availability of resources compared to the unlimited wants and needs. For producers, scarcity means that there are limited resources available to produce goods and services. This limitation forces producers to make choices about what to produce and how to allocate their resources. They cannot produce an unlimited amount of products because resources such as land, labor, and capital are limited. Therefore, scarcity affects producers by placing constraints on their ability to produce goods.
To answer this question correctly, you need to understand the concept of scarcity and how it impacts producers. Review the concept of scarcity in the topic "Scarcity and Choice" to gain a better understanding of its effects on producers.
2. Which statement best explains the relationship between economic wants and needs? (1 point)
Answer: People must fulfill their needs to survive, but they do not need to fulfill their wants to survive.
Explanation: Economic wants and needs refer to the desires and necessities of individuals in an economic system. Needs are essential for survival, such as food, shelter, and clothing, while wants are desires that are not necessary for survival, such as luxury goods or entertainment.
The statement that best explains the relationship between economic wants and needs is that people must fulfill their needs to survive, but they do not need to fulfill their wants to survive. Needs are essential for survival, and individuals must fulfill them to maintain their basic well-being. However, wants are not necessary for survival, and individuals can live without fulfilling all their wants.
To answer this question correctly, you need to understand the difference between wants and needs and their relationship to survival. Review the concept of economic wants and needs in the topic "Scarcity and Choice" to gain a better understanding of this relationship.
3. Which statement describes how governments deal with scarcity? (1 point)
Answer: Governments choose options with the greatest benefits to the people.
Explanation: Scarcity is a fundamental economic problem, and governments play a role in addressing it. Governments make decisions and implement policies to address scarcity and the allocation of resources. When dealing with scarcity, governments prioritize options that bring the greatest benefits to the people.
To answer this question correctly, you need to understand how governments make economic decisions in response to scarcity. Review the concept of economic decision-making in the topic "Economic Decision Making" to gain a better understanding of how governments deal with scarcity.
4. Which situation is more likely to occur in a command economy than a market economy? (1 point)
Answer: A failing railroad receives assistance from around the country.
Explanation: A command economy is a system where the government has control over the production and distribution of goods and services. In a command economy, the government has the power to provide assistance and intervene in failing industries or enterprises. Therefore, it is more likely that a failing railroad would receive assistance from around the country in a command economy, where the government has the authority to provide resources and support.
To answer this question correctly, you need to understand the difference between market economies and command economies and their respective characteristics. Review the concepts of market and command economies in the topic "Distributing Goods and Services" to gain a better understanding of which situation is more likely in each system.
5. Which of these states a basic economic question? (1 point)
Answer: What goods should be produced?
Explanation: In economics, there are three basic economic questions that need to be answered: what to produce, how to produce, and for whom to produce. The question "What goods should be produced?" directly addresses one of these basic economic questions.
To answer this question correctly, you need to understand the three basic economic questions and be able to identify which question is being asked. Review the concept of the three basic economic questions in the topic "Distributing Goods and Services" to gain a better understanding of this concept.
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