Economic Test Feb. 20
  • 1. A product of the earth ("gift of nature") that people use to meet their needs is a:
A) natural resource
B) free enterprise
C) good
D) service
  • 2. The number limit on how many items of a particular can be imported from a particular country is the:
A) supply
B) quota
C) demand
D) tariff
  • 3. The economic system of communist countries is most closely related to which of the following:
A) market economy
B) mixed economy
C) command economy
D) traditional economy
  • 4. Which of the following is NOT one of the basic questions that alll economic systems must answer:
A) What to produce?
B) How to produce?
C) For whom to produce?
D) How much to produce?
  • 5. A market economy is very different from a command economic system or a traditional system. Which of the following is found in a market economy?
A) government control of industry
B) government control agriculture
C) free labor
D) competition between businesses
  • 6. In a command economy, economic decisions are made by:
A) producers
B) government
C) market
D) consumers
  • 7. Which is an example of human capital?
A) machinery
B) education
C) roads
D) factories
  • 8. Who owns the resources in a command economy?
A) individuals
B) the government
C) private businesses
D) no one
  • 9. How are the goods and services exchanged in a traditional economy?
A) through shortages and surpluses
B) through bartering
C) through prices and wages
D) through government regulation
  • 10. Which trade barrier sets up a complete ban on trading between countries?
A) quota
B) embargo
C) tariff
D) mountain
  • 11. There are no truly pure Market economic systems, but which of the following countries is the closest?
A) Germany
B) United States
C) Russia
D) Cuba
  • 12. What is an example of a physical trade barrier?
A) mountain
B) tariff
C) quota
D) embargo
  • 13. Which of the following BEST describes a market system?
A) The government provides food and housing to all workers.
B) A person can start any legal business and charge any price.
C) The government provides services, such as telephones and television.
D) Businesses are owned by the government.
  • 14. Which statement BEST describes the command economic system in the former Soviet Union?
A) Workers made most of the economic decisions for the country.
B) Individuals made economic decisions based on supply and demand.
C) The central government planned the economy for the entire nation.
D) Its economics were controlled mainly by the global economy.
  • 15. Why is it important for a country to invest in human capital?
A) Businesses cannot do all the training needd by workers to be successful.
B) A country needs money in order to pay its workers.
C) A country's economy is more successful when workers have good education and health care.
D) Workers enjoy getting extra training and job opportunities.
  • 16. What is an entrepreneur?
A) A student in a college.
B) A person who starts a new business.
C) A worker in a factory.
D) A leader of a country.
  • 17. When a government decides to increase a tariff, it increases the amount of tax placed upon:
A) people's property
B) imported goods
C) people's income
D) renewable resources
  • 18. How do Russia's harsh climate, size, and few navigable rivers affect its economic development?
A) Russia's natural resources are very difficult to use.
B) Russia can easily transport goods to Asia.
C) Russia is the richest nation on earth.
D) The land in Siberia is very easy to farm.
  • 19. What kind of economy do most democratic nations have?
A) command
B) traditional
C) market
D) mixed
  • 20. What do the economic systems of the United Kingdom, Germany, and Russia have in common?
A) All are examples of traditional economies.
B) All are examples of mixed economies.
C) All are examples of pure market economies.
D) All are examples of command economies.
  • 21. This is an economic system where people follow the occupation of their ancestors:
A) traditional
B) command
C) mixed
D) market
  • 22. As with any small island country, Cuba has fewer natural resources than countries such as Brazil. How does this fact effect Cuba's trade?
A) Does not need to import or export.
B) Needs to import more products.
C) Exports a wide variety of products.
D) Should import fewer products.
  • 23. The limit on how many items can be imported from a country is the:
A) tariff
B) demand
C) quota
D) supply
  • 24. The economic system of communist countries is most closely related to which of the followin?
A) command economy
B) market economy
C) mixed economy
D) traditional economy
  • 25. Which trade barrier discourages trade by placing a tax on imported goods?
A) embargo
B) tariff
C) subsidy
D) quota
  • 26. Brazil is building new factories and using new technology. These are examples of:
A) gross domestic product
B) opportunity costs
C) investment in capital goods
D) investment in human capital
  • 27. Jose is an auto mechanic in a nearby town. He has decided his own small town needs its own car repair shop, so he plans to open a new one near his home. Jose is an example of:
A) opportunity costs
B) trade surplus
C) gross domestic product
D) entrepeneur
  • 28. The North American Free Trade Agreement (NAFTA) was designed to promote free trade between the United States.
A) United States, Canada, and Mexico
B) the United States, the United Kingdom, and Germany
C) the United States, Canada, and the United Kingdom
D) the United States, Mexico, and the islands of the Caribbean
  • 29. When a country has a market economy, which of these statements correctly defines this system?
A) The government controls most of the businesses in the country.
B) Workers are guaranteeded a pay raise every year.
C) Basic goods in the country are provided to all people without charge.
D) Companies produce goods of their choice and consumers decide whether to buy the goods.
  • 30. Which of the following explanations would reflect a country a mixed economy (between a pure market and pure command)?
A) Prices and wages are solely regulated by a country's government.
B) A country's distribution of resources is based on inheritance.
C) A combination of a privately-owned industry and government control.
D) The government controls all businesses.
  • 31. What do the economic systems of the United Kingdom, Germany, and Russia have in common?
A) All are examples of pure market economies.
B) All are examples of pure command economies.
C) All are examples of mixed economies that are mostly command economies with some elements of market economies.
D) All are examples of mixed ecoonomies that are mostly market economies with some elements of command economies.
  • 32. The United Kingdom Customs Service has found toxic lead-based paint toys imported from a Chinese toy-making company. These toys are intended for sale in the United Kingdom. Exposure to the paint over a long period of time coul be fatal to children under 6 years old. What type of trade barrier would guarantee that no child in the United Kingdom would be exposed to the deadly lead-based paint?
A) quota
B) embargo
C) tariff
D) exchange rate
  • 33. In a traditional economic system people usually exchange goods or services rather than use money. Which of the following is an example of this exchange process?
A) bartering with a seller
B) using currency to pay
C) charging goods on a credit card
D) paying for services by check
  • 34. Brazil is building new factories and using newer technology. These are examples of
A) investment in human capital
B) opportunity costs
C) investment in capital goods
D) gross domestic product
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