Understanding Economics Basics: A Comprehensive Overview

1. Economics: EOCT Practice Game

2. Economics may best be defined as aa) study of efforts to satisfy seemingly unlimited wants with scarce resourcesb) branch of sociologyc) scientific study of supply and demandd) limited description of economic activities

3. Three basic economic questions area) What?, How?, and When?b) What?, How?, and For Whom?c) What?, Where?, and When?d) Why?, What?, and How?

4. A popular model used to illustrate the concept of opportunity cost is calleda) entrepreneurshipb) factors of productionc) laissez-faired) the production possibilities frontier

5. A basic requirement for survival is aa) needb) opportunity costc) wantd) factors of production

6. Land, labor, capital, and entrepreneurship are thea) results of supply and demandb) basis of employmentc) results of productiond) factors of production

7. An economy operating at its production possibility frontier is operatinga) with high unemploymentb) with minimum growthc) at full potentiald) on quota-filling production

8. A risk-taker in search of profits is called a(n)a) economistb) conspicuous consumerc) entrepreneurd) capitalist

9. A great variety of goods and services is characteristic ofa) a market economyb) traditional economyc) all economic systemsd) a command economy

10. The American economic system can be described as having aa) command economyb) traditional systemc) quota systemd) free enterprise system

11. In a modified free enterprise economya) entrepreneurship is prohibitedb) there is no government interventionc) there is some government interventiond) no one can hold private property

12. Choices in a command economy are made bya) private businessb) government agenciesc) assembly line workersd) competition

13. An organized way of providing for the wants and needs of people is known asa) an economic systemb) economic interdependencec) a fixed incomed) the profit motive

14. Which of the following is NOT an economic social goal?a) entrepreneurshipb) economic efficiencyc) economic growthd) price stability

15. Which of the following is NOT an economic social goal?a) entrepreneurshipb) economic efficiencyc) economic growthd) price stability

16. Which group of people ultimately determines the products that a free enterprise economy produces?a) property ownersb) consumersc) local officialsd) Congress

17. The most common form of business organization in the United States is thea) corporationb) sole proprietorshipc) partnershipd) cooperative

18. Voting shareholders in a company holda) preferred stockb) common stockc) corporate bondsd) dividends

19. The price paid to use another’s money is calleda) interestb) principalc) dividendsd) stocks

20. When corporations are chartered, they must register with thea) county officialsb) Board of Directorsc) state of incorporationd) shareholders

21. An advantage of a merger between two companies isa) improved production and efficiencyb) establishing a voluntary transactionc) establishing a legal monopolyd) increasing cost

22. Diversification is an advantage ofa) all corporationsb) private ownershipc) conglomeratesd) cooperatives

23. One weakness of the sole proprietorship is that thea) business depends solely on the ownerb) owner has no controlc) owner has too many partnersd) business is in constant danger of bankruptcy

24. Which of the following is NOT an economic social goal?a) entrepreneurshipb) economic efficiencyc) economic growthd) price stability

25. Churches and schools are considered to bea) service organizationsb) nonprofit organizationsc) service co-opsd) horizontal mergers

26. As a consumer, if the price of apples double and your salary remains the same, you would probablya) buy more complementary goodsb) buy more applesc) buy fewer applesd) buy the same number of apples

27. If the price of a product decreases and consumers buy more of the product,a) the product is a complementary goodb) a change in demand has taken placec) there has been an increase in demandd) a change in quantity demanded has taken place

28. The satisfaction a consumer enjoys by purchasing one more unit of a product is calleda) marginal utilityb) trade-offsc) personal satisfactiond) cause and effect

29. The statement “the demand for an economic product varies inversely with its price” is a definition ofa) the Law of Supply and Demandb) the Law of consumptionc) the Law of Demandd) laissez faire

30. Demand is based on consumer purchase, whereas supply is based ona) producers offering products for saleb) the ability to purchasec) the willingness to purchased) offering a wide range of prices

31. If the price of a product falls, producers will generallya) increase inputb) offer more for salec) hold a clearance saled) offer less for sale

32. In a market economy, a high price is a signal fora) producers to offer less and consumers to buy moreb) producers to supply more and consumers to buy lessc) producers to buy mored) government to step in and protect consumers

33. How do you know when a market is at equilibrium?a) demand equals supplyb) supply is greater than demandc) demand is greater than supplyd) the government has set price ceilings

34. Price competition is a characteristic of aa) corporate stateb) market economyc) command economyd) traditional economy

35. In pure competition,a) buyers and sellers act together.b) buyers and sellers deal in a variety of products.c) buyers and sellers have little knowledge of the items for sale.d) a large number of buyers and sellers exist.

36. Mergers and acquisitions might result ina) increases in consumer demandb) smaller companiesc) inadequate competitiond) more competition

37. In an oligopoly,a) prices are kept artificially lowb) advertising is limitedc) pure competition decides successd) there are few suppliers

38. To be counted in the civilian labor force, a person must bea) a member of the militaryb) already employed and between the ages of 16 and 65c) employed or looking for work, and between the ages of 16 and 65d) male and more than 18 years old

39. A meeting of representatives for labor and management to negotiate contracts is calleda) macroeconomicsb) collective bargainingc) arbitrationd) seizure

40. What type of union is made up of all workers, regardless of the job each person performs?a) industrial unionb) company unionc) craft uniond) trade union

41. Since World War II, union membership in the United States has beena) declining b) at an all-time highc) remaining constantd) increasing

42. The President may intervene in labor disputesa) whenever management is involvedb) only when federal workers are involvedc) if national security is affectedd) only on an interstate level

43. The use of a third party to make suggestions and advice in labor-management disputes is calleda) closed shopb) mediationc) featherbeddingd) open shop

44. John earns $10,000 annually and pays $1000. Mary earns $60,000 during the same period and pays taxes of $20,000. The tax they both paid was a _________ tax.a) regressiveb) marginalc) progressived) proportional

45. FICA includes taxes to pay fora) Social Security and unemploymentb) Social Security and Medicarec) private schoolsd) highways and welfare

46. The largest source of tax revenue for state governments is thea) real estate taxb) license feesc) entertainment taxd) sales tax

47. What are the three buying principles?a) comparing prices, using advertisements, reading consumer reportsb) reading product literature, using discount stores, watching for salesc) gathering information, using advertising, comparison shoppingd) watching for sales, comparing prices, making decisions

48. The larges source of income for city governments is thea) sales taxb) income taxc) property taxd) intergovernmental revenues

49. In recent years, the fastest growing portion of the federal budget is the category ofa) entitlementsb) agriculturec) national defensed) international affairs

50. The federal budget is first prepared by thea) Presidentb) Secretary of the Treasuryc) House Appropriations Committeed) Congress