Semester Pre- Assessment

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The opportunity cost of a new public high school is the

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other goods and services that must be given up for the new school.

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Which one of the following do economists consider to be an example of capital goods? A. Money in a bank, B. Machines in an auto plant., C. Corporate bonds of an oil company, D. Common stocks in a computer business

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Machines in an auto plant.

Front

What is meant by the statement that every economic system faces the problem of scarcity?

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There are never enough productive resources to satisfy all human wants.

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From an economic point of view, which approach to controlling pollution is most efficient? Options: A. Abolish the use of toxic chemicals in all production., B. Use economic resources to eliminate all pollution., C. Adopt laws and regulations that prohibit economic activities that cause pollution problems., D. Reduce pollution as long as the additional benefits are greater than the additional costs.

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Reduce pollution as long as the additional benefits are greater than the additional costs.

Front

The essential difference between a command economy and a market economy is that in a market economy

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buyers and sellers determine resource allocation.

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Which is a basic economic question that must be answered by all economic systems? Options: A. What will be the share of profits that go to businesses?, B. What will be the amount of the minimum wage for workers?, C. How will goods and services be produced?, D. How will government collect income taxes?

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How will goods and services be produced?

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Profits are equal to total

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revenue minus total cost.

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If the government decides to reduce the payroll taxes on the wages and salaries of workers, then there will most likely be

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an increase in consumption.

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A high school student buys a sweatshirt from a store. The sweatshirt is on sale at a 20 percent discount off the regular price. In this exchange,

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the student and the store benefit.

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If Nation A adopts public policies that restrict imports from another nation that is a major trading partner, then in Nation A

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consumers will pay higher prices for products.