Economic Test Feb. 20
  • 1. A product of the earth ("gift of nature") that people use to meet their needs is a:
A) service
B) free enterprise
C) good
D) natural resource
  • 2. The number limit on how many items of a particular can be imported from a particular country is the:
A) demand
B) tariff
C) quota
D) supply
  • 3. The economic system of communist countries is most closely related to which of the following:
A) traditional economy
B) command economy
C) market economy
D) mixed economy
  • 4. Which of the following is NOT one of the basic questions that alll economic systems must answer:
A) How to produce?
B) How much to produce?
C) For whom to produce?
D) What 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) competition between businesses
B) free labor
C) government control agriculture
D) government control of industry
  • 6. In a command economy, economic decisions are made by:
A) consumers
B) producers
C) government
D) market
  • 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) the government
B) individuals
C) no one
D) private businesses
  • 9. How are the goods and services exchanged in a traditional economy?
A) through prices and wages
B) through bartering
C) through shortages and surpluses
D) through government regulation
  • 10. Which trade barrier sets up a complete ban on trading between countries?
A) embargo
B) quota
C) mountain
D) tariff
  • 11. There are no truly pure Market economic systems, but which of the following countries is the closest?
A) Cuba
B) Russia
C) United States
D) Germany
  • 12. What is an example of a physical trade barrier?
A) embargo
B) quota
C) mountain
D) tariff
  • 13. Which of the following BEST describes a market system?
A) Businesses are owned by the government.
B) The government provides services, such as telephones and television.
C) A person can start any legal business and charge any price.
D) The government provides food and housing to all workers.
  • 14. Which statement BEST describes the command economic system in the former Soviet Union?
A) The central government planned the economy for the entire nation.
B) Workers made most of the economic decisions for the country.
C) Its economics were controlled mainly by the global economy.
D) Individuals made economic decisions based on supply and demand.
  • 15. Why is it important for a country to invest in human capital?
A) Workers enjoy getting extra training and job opportunities.
B) A country's economy is more successful when workers have good education and health care.
C) A country needs money in order to pay its workers.
D) Businesses cannot do all the training needd by workers to be successful.
  • 16. What is an entrepreneur?
A) A person who starts a new business.
B) A worker in a factory.
C) A student in a college.
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) renewable resources
C) imported goods
D) people's income
  • 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) market
C) traditional
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 command economies.
C) All are examples of pure market economies.
D) All are examples of mixed economies.
  • 21. This is an economic system where people follow the occupation of their ancestors:
A) market
B) mixed
C) command
D) traditional
  • 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) Exports a wide variety of products.
C) Should import fewer products.
D) Needs to import more products.
  • 23. The limit on how many items can be imported from a country is the:
A) supply
B) demand
C) tariff
D) quota
  • 24. The economic system of communist countries is most closely related to which of the followin?
A) command economy
B) traditional economy
C) market economy
D) mixed economy
  • 25. Which trade barrier discourages trade by placing a tax on imported goods?
A) quota
B) tariff
C) subsidy
D) embargo
  • 26. Brazil is building new factories and using new technology. These are examples of:
A) opportunity costs
B) gross domestic product
C) investment in human capital
D) investment in capital goods
  • 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) entrepeneur
B) gross domestic product
C) opportunity costs
D) trade surplus
  • 28. The North American Free Trade Agreement (NAFTA) was designed to promote free trade between the United States.
A) the United States, Mexico, and the islands of the Caribbean
B) United States, Canada, and Mexico
C) the United States, Canada, and the United Kingdom
D) the United States, the United Kingdom, and Germany
  • 29. When a country has a market economy, which of these statements correctly defines this system?
A) Basic goods in the country are provided to all people without charge.
B) The government controls most of the businesses in the country.
C) Companies produce goods of their choice and consumers decide whether to buy the goods.
D) Workers are guaranteeded a pay raise every year.
  • 30. Which of the following explanations would reflect a country a mixed economy (between a pure market and pure command)?
A) A combination of a privately-owned industry and government control.
B) Prices and wages are solely regulated by a country's government.
C) The government controls all businesses.
D) A country's distribution of resources is based on inheritance.
  • 31. What do the economic systems of the United Kingdom, Germany, and Russia have in common?
A) All are examples of mixed ecoonomies that are mostly market economies with some elements of command economies.
B) All are examples of pure command economies.
C) All are examples of pure market economies.
D) All are examples of mixed economies that are mostly command economies with some elements of market 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) exchange rate
B) quota
C) embargo
D) tariff
  • 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) using currency to pay
B) charging goods on a credit card
C) bartering with a seller
D) paying for services by check
  • 34. Brazil is building new factories and using newer technology. These are examples of
A) investment in capital goods
B) investment in human capital
C) gross domestic product
D) opportunity costs
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