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Unit 7 Practice Questions
Unit 7 Practice Questions
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1
Scarcity is –
D. what is given up when a choice is made
A. the interaction of supply and demand
B. the inability to satisfy all wants at the same time
C. selecting an item from a set of alternatives
2
Which elected or appointed body oversees the daily operation of Orange County Public Schools K – 12?
D. Sanitation Board
C. School Board
A. Town Council
B. VA General Assembly
3
Due process of law is –
A. protection against unfair laws and unfair government actions
C. the Supreme Court’s right to decide a law's constitutionality
B. the principle of the consent of the governed
D. treating all groups equally
4
Which statement best describes how the forces of supply and demand work?
B. When an item in demand is in short supply, its price rises.
D. When the supply of an item increases, demand for it also increases
A. The more demand there is for an item, the more its price will fall.
C. When the forces of supply and demand are in balance, prices fall.
5
Identify the characteristics of a free market economy:
B. Profit motive
A. Private ownership of property
C. Individual choice
D. Centrally-planned economy
6
Which of the following is least likely to exist in a command economy?
D. High priority for military
A. Consumer sovereignty
B. A good system of education
C. Government regulation
7
The way that resources, products, and money flow among households and businesses is called –
A. entrepreneurship
C. a corporation
D. partnership
B. circular economic flow
8
Which of the following do free market economists believe is most essential for a healthy and prosperous economy?
D. Public ownership of major resources
C. Protection against foreign competitors
A. Government-imposed price controls
B. Competition
9
What type of economic system is based on private ownership of property and the profit motive?
D. subsistence
A. traditional
B. command
C. free market
10
What do the FCC, SEC, and FTC all have in common?
D. These agencies do not oversee the way individuals and firms do business.
B. These agencies only oversee the way individuals do business.
C. These agencies oversee the way individuals and firms do business.
A. These agencies only oversee the way firms do business.
11
The government's income last year was $2019bn and its expenditures were $1835bn. What does that suggest?
C. It had to raise social security payments
D. It had less income from taxes than it spent on defense
A. It had a surplus
B. It had to borrow money to cover costs
12
In what type of economy are governments, businesses, and individuals all decision makers?
B. mixed
D. traditional
C. command
A. free market
13
How does scarcity of resources affect consumers?
D. Scarcity has no effect on the consumers.
C. Imported goods become more costly than goods made in the United States.
A. Consumers need to be prepared for large price swings.
B. Consumers need to decide what to buy and what to do without.
14
Pam decides to invest money in the stock market instead of building a new home. What is her opportunity cost?
D. The cost of the lottery ticket
C. The cost of the new home
B. The time she could spend surfing
A. The interest she earns on the money
15
The type of business organization that limits the owners' risk to the amount of money invested is –
A. a corporation.
C. a proprietorship.
B. an entrepreneurship.
D. a partnership.
16
The Virginia legislature is called the—
A. State Congress
B. State Assembly
D. General Congress
C. General Assembly
17
Which amendment to the Constitution of the United States defines citizenship?
A. Tenth
D. Twentieth
B. Fourteenth
C. Fifteenth
18
Which of the following terms best describes the United States economy today?
C. command
D. cooperative
B. mixed
A. traditional
19
Individual consumers, not the government, make decisions about what will be produced in –
C. a command economy
B. a free market economy
D. a federal economy
A. a communist system
20
An important function of banks is to –
B. sell and buy stocks and bonds for their clients
D. use money deposited by individuals to make loans to businesses
C. sell postage stamps
A. safeguard the income taxes paid to the Treasury Department
21
Which of the following phrases best characterizes a command economy?
A. consumer choice
D. supply and demand
B. economic freedom
C. government control
22
“Buy one – get one free!” is an example of which principle of the American economic system in action?
B. scarcity
D. monopolies
A. opportunity cost
C. incentives
23
Select three factors that could cause a decrease in demand for a product if its price remained the same.
C. Better substitutes have become available at lower prices
A. Income levels have changed so the product is no longer affordable
D. The product is not as desired as it once was
B. The product is the only available one of its kind
24
What kind of resource is oil?
B. A labor resource
C. An entrepreneurship resource
D. A natural resource
A. A capital resource
25
Who is the head of the executive branch of the Virginia government?
B. the Chief Justice
C. the Governor
D. the Attorney General
A. the President
26
The government decides how much money workers should receive at a car dealership. What type of economic system is that?
D. Free market
B. Mixed
C. Traditional
A. Command
27
Scarcity leads individuals and businesses to –
D. produce goods without the factors of production.
B. make choices as to how to use limited resources.
A. choose between supply and demand.
C. give up their opportunity cost.
28
Select the three basic questions of economics.
C. How will it be produced?
A. What will be produced?
D. Who will produce it?
B. Why will it be produced?
29
In a free market economy, how are decisions reached about what gets made and how much goods sell for?
B. By the government
A. By community tradition
D. By the stock market
C. By the forces of supply and demand
30
A person born in any U.S. state or territory automatically becomes a(n)--
A. alien
C. naturalized citizen
B. native-born citizen
D. permanent resident
31
What is the most important difference between a market economy and a command economy?
B. The importance of national defense
D. The skill level of the labor force
C. The government role in decision making
A. The difference in the quality and quantity of available services
32
A corporation is owned by –
D. its board of directors
B. consumers
A. the government
C. its stockholders
33
“Combining human, natural, capital, and entrepreneurship resources to make goods or services.” This is a definition of –
C. production
B. supply and demand
D. consumption
A. incentives
34
“I take risks in business to try to make a profit.” Which term would best describe that individual?
B. Corporation
D. Attorney
A. Entrepreneur
C. Bureaucrat
35
“The using of goods and services.” This is a definition of –
B. supply and demand
D. consumption
A. incentives
C. production
