AnswersMI-Economics CRIntroduction to Economics

Introduction to Economics — Unit test Answers

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1
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The difference in income between the richest and poorest citizens is called

A
a command economy.
B
unemployment.
C
private property.
D
the wealth gap.
2
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This graph shows the division of wealth in the United States in 2010.Based on this graph, how much wealth did the top 20 percent of the population hold?

Question illustration
A
about 35 percent
B
about 55 percent
C
about 80 percent
D
about 90 percent
3

[BLANK]

A
A
B
B
C
C
4

How does a high unemployment rate affect the economy?

A
A high unemployment rate has no effect.
B
A high unemployment rate has little effect.
C
A high unemployment rate has a very positive effect.
D
A high unemployment rate has a very negative effect.
5

Jose realized that the only dining options in his community are at local restaurants where the wait time is often excessive. He decides to purchase and operate his own food truck in the area. Which indicates that Jose is exercising free enterprise?

A
Jose allows the other dining establishments to set his menu.
B
Jose shares ownership with the local government which will also determine its location.
C
Jose can control how he conducts his food truck business.
D
Jose parks his food truck five miles from the closest eat-in restaurant to avoid competition.
6

This graph shows the changing unemployment rate in the United States.From 2001 to 2011, unemployment in the United States

Question illustration
A
stayed the same.
B
slightly changed.
C
sharply increased.
D
sharply decreased.
7

Study the graph.In what time period did hydroelectric power usage reach its peak?

Question illustration
A
1970–1980
B
1980–1990
C
1990–2000
D
2000–2010
8

Gabriela owns a company that makes silk scarves. She buys the silk from an overseas supplier and is subject to a tax on imported goods. Gabriela most likely lives in

A
a closed economy with limited government regulation.
B
a pure market economy with no government regulation.
C
a command economy with heavy government regulation.
D
a mixed market economy with some government regulation.
9

One of the main questions of economics involves deciding upon the method for

A
distributing goods and services.
B
creating goods and services.
C
pricing goods and services.
D
enhancing goods and services.
10

One method for studying opportunity cost is to think in terms of

A
risk and ability.
B
pros and cons.
C
tradeoffs
D
trial and error.
11

Which factor should be most important if you are considering purchasing a new video game?

A
the number of games available for purchase
B
the quality of the games produced by that manufacturer
C
the popularity of the video game with your friends
D
the other things you could do with your money instead
12

Which consideration must a society address when deciding for whom to produce a potentially scarce or limited resource?

A
Who can be most creative with the product?
B
Who has the largest resource pool?
C
Who has the greatest need?
D
Who can bring in the greatest profit?
13

The chess club needs to raise money for tournament uniforms. Some members want to sell energy drinks at a football game to raise funds, but others want to organize a car wash in the school parking lot. Based on the concept of scarcity, which thought should drive members' decision-making process to determine how to fundraise?

A
Where will unsold energy drinks be stored?
B
Is there enough consumer demand for a car wash?
C
Will the concession stand be open during the big game?
D
Are there enough volunteers to work a car wash?
14

What is one downside for consumers to competition in a free-enterprise system?

A
Consumers must be knowledgeable.
B
Consumers have limited choices.
C
The quality of goods often suffers.
D
The price of goods often decreases.
15

Why does the US government create regulatory agencies? Check all that apply.

A
to create fair competition between producers
B
to limit the knowledge of certain consumers
C
to allow producers to have greater freedom
D
to protect consumers’ health and safety
E
to prevent the formation of monopolies
16

Ivan works for an automobile factory that exports cars around the world. The government manages the factory, and he lives in housing provided by the city. Ivan most likely lives in

A
a closed economy with limited government regulation.
B
a pure market economy with no government regulation.
C
a command economy with heavy government regulation.
D
a mixed market economy with some government regulation.
17

Which is an example of regulation in the automobile industry?

A
the creation of fuel-efficiency standards for cars
B
the installation of satellite radio systems in some cars
C
the usage of multiple-year warranties to cover repairs
D
the production of hybrid models that conserve gasoline
18

Becoming informed about economics helps a person understand the

A
reasons a command economy is ideal.
B
role of government in regulating production.
C
why consumers receive tax revenue.
D
reasons an economy must always be completely regulated.
19

In a free-enterprise system, producers decide

A
how much to charge.
B
which services to buy.
C
where to shop for goods.
D
which goods interest them.
20

How does a production possibility chart assist in outlining opportunity cost?

A
It compares profit potential of one product to another.
B
It compares production cost of one product to another.
C
It compares production numbers of one product to another.
D
It compares consumer demand of one product to another.

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