Economics

Economics is best defined as: (Select ONE)

• The studies of how people make choices to satisfy their wants.

• The study of individual self-interests.

• The study of how government can most efficiently raise funds by taxation.

• The process by which goods are sold on free markets.

As the demand for T-shirts increases, how will T-shirt producers likely respond?

• Lay off T-shirt workers to reduce production costs.

• Make fewer T-shirts to meet their income goals.

• Buy more cotton fabric to produce more T-shirts.

• Increase advertising spending to increase T-shirt sales.

During the holiday season, more people decide to purchase DVDs. What action will DVD producers take in response?

• They will produce more copies of DVDs.

• They will produce fewer copies of DVDs.

• They will hire fewer workers.

• They will use less plastic in production.

Which situation would give a business more control over the price of its product?

• an increase in the cost of labor

• an increase in the cost of capital goods

• a decrease in competition in the market

• a decrease in consumers' income

I own an oil refinery. Summer is coming, and people are going to be driving everywhere!  They're going to need LOTS of gasoline.

Will the price go up?

• Yes

• No

I just invented the world's first self-folding chair!  It folds itself up and puts itself away. Nobody else makes anything like it!

Will the price go up?

• Yes

• No

I sell rocks for a landscaping company. But this year it seems that everyone just wants to buy Gnomes for their garden. What am I going to do with all these rocks? What should this person do?

• Sell them at a discount

• Use them for landscaping projects

• Wait for the trend to change

• Give them away for free

Which of the following statements describe features of a market economy? Choose all that apply.

• A) The government harnesses the power of self-interest for the good of society

• B) A central authority makes decisions about production and consumption

• C) The pursuit of one's own self-interest sometimes results in market failure

• D) Growth in a market economy is steady and without fluctuations

Centralized Government Controls are most closely associated with: (Select ONE)

• Command Economy.

• Traditional Economy.

• Mixed Economy

• Free-Enterprise Economy.

In a Market Economy, how does Competition benefit Consumers?

• A) In a communist system, citizens can vote for issues or candidates how they see fit.

• B) Consumers make the decision on what producers are able to purchase.

• C) Consumers will see better prices and quality of products in a competitive market.

• D) Producers are not concerned with what consumers want in a competitive market.