AnswersHSA 26-27 EconomicsCase Study: Starting a Business

Case Study: Starting a Business — Unit test Answers

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Sabrina’s Soccer produces soccer balls and soccer nets, which are sold at sporting goods stores. Which factors directly affect the company’s profit? Check all that apply.

A
a stocking up on soccer cleats and uniforms
B
a rise in the number of soccer leagues
C
a decrease in the cost of raw materials
D
the opening of two sporting goods stores
E
the push for physical activities in schools
2
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The graph shows the average household income for a community named Anytown. Anytown households that earn more than $75,000 tend to buy sports equipment, while households that earn less than $75,000 tend to buy TVs. Which new business would be most likely to succeed?

Question illustration
A
a car dealership
B
an electronics store
C
an office supply store
D
a sporting goods store
3

Carmen wants to open her own coffee shop. She has narrowed down a list of wholesale retailers and their cost per pound of coffee beans. Whole Sale Company Cost per lb.Café con Leche$8.50Beans Brothers$7.50Colombian Co.$11.25Turkish Coffee Company$6.25Which company has the comparative advantage in cost per pound of coffee?

A
Café con Leche
B
Beans Brothers
C
Colombian Co.
D
Turkish Coffee Company
4

Which best summarizes how consumer demand changes?

A
Consumer demand changes over time based on few factors.
B
Consumer demand changes often based on many factors.
C
Consumer demand changes over time based on specific factors.
D
Consumer demand changes often based on few factors.
5

Which best describes how consumers may benefit from specialization?

A
Consumers can only purchase high-quality goods.
B
Consumers have more price options.
C
Consumers receive more sale offers.
D
Consumers find products at lower prices.
6

The graph shows a demand curve.The graph shows the demand curve shifting from D (orange) to D₁ (blue), with the new curve located to the left of the original curve.Which statement best explains this change?

Question illustration
A
A decrease in quantity demanded caused by an increase in the product's price.
B
A decrease in demand caused by a fall in income or a fall in the price of a substitue good.
C
An increase in demand caused by higher consumer income.
D
A movement along the demand curve caused by a price change.
7

In order to compete successfully, a producer must produce goods that are

A
more expensive than those of competitors.
B
of a lesser quality than those of competitors.
C
of a higher quality than those of competitors.
D
created without worrying about the costs of production.
8

This graph shows a supply curve.What happens when the price of a good increases?

Question illustration
A
The quantity of goods that are produced increases.
B
The producer of the good is certain to make less money.
C
The quantity of goods that are produced decreases.
D
The quantity of goods that are produced stays about the same.
9

What happens when the quantity of a good supplied at a given price is greater than the quantity demanded?

A
excess supply
B
stable prices
C
exact equilibrium
D
increased production
10

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total profit the company earns after selling 100 boards?

A
$300
B
$350
C
$3,000
D
$3,500
11

The graph shows a supply curve.Which change is illustrated by the shift taking place on this graph?

Question illustration
A
an increase in demand
B
a decrease in demand
C
an increase in supply
D
a decrease in supply
12

This table shows the production possibility schedule for several toothpaste companies. Toothpaste company Large tubes Small tubes 1 Sparkling 100 per hour 200 per hour 2 Bright White 100 per hour 250 per hour 3 Fresh! 200 per hour 250 per hour 4 Mmmint 150 per hour 150 per hour Use the numbers to place the companies in order of greatest comparative advantage to least comparative advantage in producing small tubes of toothpaste.

A
2, 1, 3, 4
B
1, 2, 3, 4
C
4, 3, 1, 2
D
2, 1, 4, 3
13

According to the law of demand, as prices decrease, the quantity demanded

A
decreases.
B
increases.
C
stays the same.
D
disappears.
14

Which best describes how the government sanctions technological monopolies?

A
by creating the technology itself
B
by prohibiting others from entering the market
C
by issuing a patent for the technology
D
by authorizing one producer
15

A survey of hobbies and purchases can help a producer

A
assess demand to choose a business.
B
identify the marginal benefit to make a profit.
C
decide the production costs to make a good.
D
determine the remaining supply to lower costs.
16

The law of demand applies most directly to which group?

A
buyers
B
sellers
C
producers
D
lawmakers
17

The graph shows a demand curve.What does the data shown in this graph represent?

Question illustration
A
a decrease in quantity demanded as prices decrease
B
an increase in price as quantity demanded decreases
C
a decrease in income as quantity demanded increases
D
an increase in quantity demanded as prices decrease

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