Econ Test 1 Review

Question 1

Which of the following is NOT one of the Three Basic Questions every economy must answer?

Accepted Answer

How Much Will be Produced?

Question 2

Which form of business creates a separate legal person?

Accepted Answer

Corporation

Question 3

This term refers to output per worker. In simpler words, how much each person is able to make.

Accepted Answer

Productivity

Question 4

If new producers enter the market:

Accepted Answer

Competition will increase

Question 5

As Consumption Increases, Marginal Benefit:

Accepted Answer

Decreases

Question 6

In this economy a central governmental authority decides how to use a country’s resources.

Accepted Answer

Command Economy

Question 7

The amount paid by the consumer to purchase an item is called

Accepted Answer

Price

Question 8

In this economy decisions are made largely by custom and historical precedent.

Accepted Answer

Traditional Economy

Question 9

If the cost of producing a good decreases, but all else is the same, quantity produced will:

Accepted Answer

Increase

Question 10

The invisible hand theory assumes that:

Accepted Answer

Participants in an economy act in their own self interest

Question 11

A restaurant owner represents which Factor of Production?

Accepted Answer

Entrepreneurship

Question 12

Which of the following is NOT required for a good to be considered scarce?

Accepted Answer

Expensive

Question 13

The amount spent by the producer to make the product.

Accepted Answer

Cost

Question 14

This is what you give up to get your first choice.

Accepted Answer

Opportunity Cost

Question 15

This form of business can raise additional money by selling shares of stock

Accepted Answer

Corporation

Question 16

What economic theory is Adam Smith best known for?

Accepted Answer

The Invisible Hand

Question 17

Which of the following does not happen when producers compete?

Accepted Answer

Higher Prices

Question 18

A teacher represents which Factor of Production?

Accepted Answer

Labor

Question 19

If the cost of producing a good increases, but all else is the same, producer’s profit will:

Accepted Answer

Decrease

Question 20

This is the type of economy where individuals own and decide what to do with resources.

Accepted Answer

Market Economy

Question 21

Oil represents which Factor of Production?

Accepted Answer

Land

Question 22

The income generated by the sale of goods and services is called:

Accepted Answer

Revenue

Question 23

Trains represent which Factor of Production?

Accepted Answer

Capital

Question 24

Limited creative potential is a disadvantage of which form of business?

Accepted Answer

Franchise

Econ Test 1 Review

Questions 24

Econ Test 1 Review

Questions 24