Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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Manufactured goods needed to produce other goods and services are
called a. | nondurable
goods. | c. | Gross Domestic
Product (GDP). | b. | capital goods. | d. | consumer goods. | | | | |
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2.
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You
live in a country that is not operating on the production possibilities curve but inside it. What
conclusion can you make about the economy? a. | prices are low | c. | all resources are being utilized | b. | prices are
high | d. | some resources
are idle | | | | |
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3.
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Which
statement best explains the relationship between scarcity and value? a. | The more scarce
a product is, the less value it has. | b. | The more scarce a product is, the more value it
has. | c. | The more scarce
a product you want, the more value you place on it. | d. | The more scarce
a product you want, the less value you place on it. | | |
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4.
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What
is the reason for economics? a. | People don't know how to make economic decisions without
help. | b. | People have more wants than resources to satisfy
them. | c. | People are greedy and have to be
controlled. | d. | People are good workers but poor at planning
purchases. | | |
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5.
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Which
statement describes a transaction in the product market? a. | A student
purchases a notebook for school. | b. | A business hires a student to stock store
shelves. | c. | A parent requires his/her child to perform chores before
playing outside. | d. | The government requires payment of taxes before purchase of
other items. | | |
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6.
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Which
of the following describes a transaction in the factor market? a. | A student
purchases a notebook for school. | b. | A business hires a student to stock store
shelves. | c. | A parent forces his/her child to finish chores before playing
outside. | d. | The government forces someone to sell his/her home to pay
overdue taxes. | | |
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7.
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In
the circular flow model, where do businesses get their revenue? a. | from consumer
spending on goods and services | b. | from the government | c. | from the factor
market | d. | from spending on land, labor, capital and
entrepreneurship | | |
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8.
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Which
of the following statements are true about economic growth? a. | decreases in
prices help economic growth | b. | decreases in productivity help economic
growth | c. | increases in prices help economic
growth | d. | increases in productivity help economic
growth | | |
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