Economics

Of the four major sectors of the economy, ____________ plays the largest role.

• government

• household

• banking

• businesses

Which is an example of voluntary exchange?

• Nazair wants to sell Freddy a new bike. Freddy likes the bike, pays Nazair, and leaves with his new purchase

• Amarion and Maisie argue over the price of Amarion's flowers. Maisie thinks they're too much and doesn't buy them.

• Lilya buys eggs from Davon for $3 but when she opens the carton most of the eggs are broken.

• Astra agrees to water Kamora's flowers for $5. When the job is done Kamora pays her $4.

Which sector of the economy provides labor to resource markets and demands goods and services?

• government

• household

• banking

• businesses

For ten years, Mario's Pizza has been the only pizza parlor in Smallville. Customers often complained about the price of a pizza at Mario's. Last month, though, a new restaurant, The Leaning Tower of Pizza, opened up just one block away from Mario's Pizza. It is the MOST LIKELY that the price of pizza at Mario's....

• will decrease

• will increase

Yusif needs a new pair of soccer cleats for the upcoming season but he is on a very tight budget. Yusif has always worn cleats from Company X but is also interested in cleats from Company Y, which are sold at a lower price than Brand X's. Both companies' cleats are high quality, made of the same materials, and look almost identical to one another.

Which pair of cleats will Yusif likely purchase and why?

• He will buy the cleats from Company Y because they will likely be less popular than the cleats from Company X.

• He will buy the cleats from Company Y because they are less expensive than the cleats from Company X.

• 
  He will buy the cleats from Company X because they are more expensive than the cleats from Company Y.

• He will buy the cleats from Company X because they will likely last much longer than the cleats from Company Y.

Tasha and her husband have a lot of hobbies and interests, and with their bills, sometimes their expenses are more than what they make each month. The couple shares a car, which means that sometimes they have to spend extra money on other transportation to get to work or to run errands.

What would MOST help Tasha and her husband improve their finances?

• They should take out a loan from the bank in order to buy a new car.

• They should stop paying their bills until they have saved enough for a car.

• They should create a personal budget to identify how they can reduce spending.

• They should apply for a new credit card so that they can spend more each month.

Pedro, who recently turned 16, got a job as a salesperson at a shoe store. Which of the following statements is correct?

• Pedro will receive income in exchange for his labor, which will allow him to retire before he is 20.

• Pedro will receive income in exchange for his labor, which he can use to purchase goods he wants.

• The shoe store will receive income from Pedro, which will allow the owners to earn greater profits.

• The shoe store will receive income from Pedro, which the owners can use to purchase more shoes.

Banks in the United States create MOST of their profits by

• foreclosing on real estate.

• investing in the stock market.

• selling real estate that they hold.

• loaning money to individuals and businesses.

Which of the following is an example of a price incentive?

• A gallon of milk only cost $1.50 ten years ago, but today it costs $2.25.

• An employer gives an employee a raise to reward her for her hard work.

• A store usually sells candy bars for $1.00, but today is selling them for $0.75.

• A stockbroker buys a share of stock and sells it later in order to make a profit.

Brady is paid $100 a month to watch his neighbors' children whenever his neighbors have to work late. This is the only money he makes each month. Brady spends $60 a month for internet, and another $75 for cable television. Based on this information, which of the following is true?

• By decreasing his monthly expenses, Brady will increase his monthly income.

• Brady must decrease his monthly income or increase his monthly expenses.

• Brady must increase his monthly income or decrease his monthly expenses.

• By increasing his monthly expenses, Brady will decrease his monthly income.