EPF Unit 4 Test Review

Question 1

Centralized planning, lack of individual incentives, andability to quickly change economy are examples of a ___ economy.

Accepted Answer

command

Question 2

Adam Smith would most likely agree with the benefits of...

Accepted Answer

specialization

Question 3

In a market economy, how are the basic economic questions of what, how, and for whom to produce answered?

Accepted Answer

by consumer sovereignty and firms in the nation’s marketplace

Question 4

When a society invests in education, how is it improving its productivity?

Accepted Answer

by investing in human capital

Question 5

Which of these is the BEST example of a person who is an entrepreneur?

Accepted Answer

Justin, who opens a lemonade stand every summer.

Question 6

If Congress passed a law where all businesses pay 100% of employees’ healthcare costs, the likely result would be?

Accepted Answer

Businesses may be forced to raise their prices.

Question 7

An opportunity cost is

Accepted Answer

the next-best alternative you give up in order to do something else

Question 8

Which of these is a correct description of one of the ways in which a command economy differs from a market economy?

Accepted Answer

in a command economy, individuals have less economic freedom

Question 9

In a mixed economy, providing public goods, regulating market failures, & promoting economic growth is which groups job?

Accepted Answer

government

Question 10

A concave PPC shows increasingly more resources needed to increase the production of the 2nd product, which is known as

Accepted Answer

law of increasing opportunity cost

Question 11

Which of the following choices is an example of the productive resource called labor?

Accepted Answer

a service employee

Question 12

What does Point D on the PPC graph above indicate?

Accepted Answer

inefficient use of available resources

Question 13

The tools, skills, knowledge, and machines created and used by humans is known as

Accepted Answer

capital

Question 14

What does the saying, “There is no such thing as a free lunch” (TINSTAAFL) mean?

Accepted Answer

everything costs something

Question 15

The purpose of this production possibilities graph is to show

Accepted Answer

how limited resources can be used to produce a combination of items.

Question 16

A free enterprise system is also known as a

Accepted Answer

capitalist system

Question 17

Having different employees accomplish different tasks is an example of...

Accepted Answer

division of labor

Question 18

What basic economic problem do both higher-income nations and lower-income nations have in common?

Accepted Answer

scarcity of resources

Question 19

What is the primary purpose of job specialization?

Accepted Answer

increased efficiency and productivity

Question 20

What point on the PPC shows that this society wants to produce more sugar than pizza?

Accepted Answer

Point C

Question 21

In the production possibilities graph above, what MIGHT cause the curve (frontier) to move to the left (shift inward)?

Accepted Answer

A shortage of needed raw materials/ resources

Question 22

As an entrepreneur, your main objective for opening your own business is usually...

Accepted Answer

make a profit/ in it for the money!

Question 23

Which of the following is an example of a service?

Accepted Answer

receiving a check-up at the doctor’s office

Question 24

Public goods are funded by

Accepted Answer

taxes collected by the government

Question 25

Land, labor, capital, and entrepreneurship are the...

Accepted Answer

factors of production

Question 26

Which point(s) on the PPC demonstrate efficiency/ full employment?

Accepted Answer

Point A, B, and C

Question 27

Which of these is MOST LIKELY a result of a high unemployment rate in the United States?

Accepted Answer

increased demand for transfer payments / government assistance

Question 28

With non-fraudulent voluntary exchange, a buyer and seller agree to do business together

Accepted Answer

for the mutual benefit of both/ both win

Question 29

You're offered a Coke, Dr. Pepper, or 7-Up. You don’t like Coke, so you take Dr. Pepper. What's the opportunity cost?

Accepted Answer

the 7-Up

Question 30

In this PPC graph, what might cause the line (frontier) to shift outward to reach Point E?

Accepted Answer

new technological advances

Question 31

Benefits offered to encourage people to act in certain ways are

Accepted Answer

incentives

Question 32

Which of the following BEST represents capital investment?

Accepted Answer

purchasing carpet cleaning equipment

Question 33

According to the info. from the U.S. Department of Labor, which factor has the GREATEST impact on labor productivity?

Accepted Answer

Education and Skills

Question 34

The study of how individuals, institutions, and society make choices under the conditions of scarcity is

Accepted Answer

economics

Question 35

If a nation encourages entrepreneurship (think innovation taking place), then which of the following is likely to occur?

Accepted Answer

the development of many new products and process methods

Question 36

With capitalism, income distribution is determined by market forces

Accepted Answer

that reward productivity

Question 37

The United States government is LEAST LIKELY involved in the nation’s economy as a

Accepted Answer

planner deciding what to produce

Question 38

A marginal benefit is MOST related to what economic concept?

Accepted Answer

oppurtunity cost

Question 39

Which of these terms is the BEST synonym for the word “entrepreneur?”

Accepted Answer

risk-taker

Question 40

Why is the consumer considered "king" (or queen) in a capitalist economy?

Accepted Answer

consumers determine what products will be produced with their “dollar vote”

Question 41

Which of the following buys goods for personal use and utility?

Accepted Answer

consumer

Question 42

You begin to eat a snack. With each bite the snack is slightly less satisfying. Which law does this scenario represent?

Accepted Answer

law of diminishing marginal utility

Question 43

Davion is considering opening a store or renting the space. He decides to open the store. What is the oppurtunity cost?

Accepted Answer

the opportunity to rent it to another tenant

Question 44

A market economy has an advantage over a command economy in that the market economy

Accepted Answer

adjusts to consumer demands over time

Question 45

If a company sees greater output (goods/services) using the same # of inputs (resources), it has experienced increased

Accepted Answer

productivity

Question 46

How do private property rights contribute to a capitalist system?

Accepted Answer

individuals are free to own the resources used to produce goods

Question 47

Trinity has purchased an industrial oven which can accommodate twenty loaves of bread at a time. This oven represents..?

Accepted Answer

capital

Question 48

Mineral resources (iron, gold, etc.) in economics are categorized as

Accepted Answer

land

Question 49

The gov't taxing manufacturers for the amount of pollutants they release is an example of which regulatory function?

Accepted Answer

regulate negative externalities

Question 50

The opportunity cost of a move from Point A to Point B on the PPC graph above is...

Accepted Answer

the decreased production of pizza

EPF Unit 4 Test Review

Questions 50

EPF Unit 4 Test Review

Questions 50