DEPARTMENT ECONOMICS FINAL- Common
Assessment
_____ 1.
Factors of production include which of the following?
| a.
| land, labor, and capital
c. goods and services |
| b.
| technology products and entrepreneurship
d. all of the products produced in an economy |
____ 2.
The value of the next best alternative that has to be given up for the action that is chosen is the
|
a. | factor of production.
b. trade-off. | c. |
opportunity cost.
d. productivity. |
____ 13.
Another term for a capitalist system is a
| a. | command
economy. | c. | mixed economy.
|
| b. | market
economy. | d. | laissez-faire
system. |
____ 14.
According to Adam Smith,
| a. | the role
of the government is to allocate resources. |
| b.
| government should not interfere in the marketplace. |
| c. | a mixed economy combines all
of the benefits of a command and a market economy. |
| d.
| left to themselves, individuals would mishandle the economy.
|
____ 16.
It is easier to start your own business in a
| a. | command
economy. | c. | traditional
economy. |
| b. | controlled
economy. | d. | free enterprise
system. |
____ 18.
In a capitalist system, most property is
| a. | private
property. | c. | regulated
by the government. |
| b. | owned
by the government. | d. | owned
by banks. |
____ 20.
A laissez-faire system is one in which
| a. | government
controls the factors of production. |
| b. |
individuals and the government make economic decisions. |
| c. | government interference in the
economy is minimal. |
| d. | government purchases goods and services from consumers. |
____
21. What goods and services should be
produced, how they should be produced, and who should share in what is produced are three basic questions addressed by
| a. | market economies.
| c. | mixed economies.
|
| b. | command
economies. | d. | all
economies. |
____ 25.
According to the law of demand, when the price of an item goes up, the quantity demanded
| a.
| stays at the same level.
b. rises. | c. | falls.
d. adjusts |
____ 26.
According to the law of supply, higher prices prompt producers to
| a.
| increase demand. | c.
| produce less. |
| b.
| maintain current production. | d.
| produce more. |
____ 27.
When the price of a good is too high for consumers, they look for
| a.
| inelastic demand.
b. substitutes. | c. |
inflation.
d. luxury items. |
____ 29.
Diminishing marginal utility refers to the fact that
| a.
| demand declines as income falls. |
| b.
| additional satisfaction declines as additional units of an item are consumed.
|
| c. | people
have unlimited needs. |
| d. | in equilibrium, supply equals demand.
____ 39____
The ability of one country, using the same quantity of resources as another country, to produce a specific product
at a lower cost is known as | a. | import
advantage. | c. | absolute
advantage. | | b. | export
advantage. | d. | comparative
advantage. | ____ 41. A tariff is a |
a. | tax on exports.
| c. | quota
on imports. | | b. |
quota on exports. | d.
| tax on imports. | |
____ 56.
Marx believed that
| a. | communism
would eventually die out. |
| b. |
workers would eventually unite and overthrow capitalism. |
| c. | workers and owners of production
would unite to establish communism. |
| d.
| capitalists would crush the proletariat.
|
____ 65.
The most common characteristics of developing nations include rapid population growth, low literacy rates, and
| a. | poor health conditions.
| c. | well-defined property
rights. |
| b. | stable
governments. | d. | well-trained
labor pools. |
____ 74.
One important reason why direct foreign investment in the United States is high is that
| a.
| the United States is politically stable. |
|
b. | American companies are more profitable than companies
located elsewhere. |
| c. | many people have dollars to invest. |
| d.
| American companies are multinationals.
|
____ 93.
If demand for a product is very elastic,
| a. | quantity
demanded will fall when the price rises. |
| b.
| quantity demanded will remain largely unchanged when the price rises. |
| c. | quantity
demanded will rise when the price rises. |
| d.
| quantity demanded will not equal the quantity supplied.
|
____ 91.
Making a trade-off involves
| a. | making
an opportunity cost choice.
c. determining the value of the next best alternative |
|
b. | sacrificing one product for another.
d. explaining production
possibilities. |
