EOCT

Practice Test

The best definition of Economics is…

The study .

..

The study .

..

The study .

..

The study .

..

4% 4%

91%

0%

1. The study of how individuals spend their money

2. The study of resources and government

3. The study of the allocation of scarce resources

4. The study of the different types of economies

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21 22 23 24 25 26

Which is NOT a basic resource?

Land

Labor

Capita

l

Mone

y

0%

100%

0%0%

1. Land2. Labor3. Capital4. Money

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21 22 23 24 25 26

The supply curve goes ____________ and the demand curve goes ____________

Up / down

Down / up

Up / up

Down / Down

91%

0%4%4%

1. Up / down2. Down / up3. Up / up4. Down / Down

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Jen decides to go to the movies rather that go out eat at Zaxby’s. What is her opportunity cost of going to the movies?

The mov

ie ...

Spendin

g t...

The sati

sf...

The mon

ey ...

4% 0%

96%

0%

1. The movie ticket2. Spending time at

home3. The satisfaction of

Zaxby’s4. The money the

movie ticket cost

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Which of the following is NOT one of the basic economic Q’s?

Wha

t will

...

How will

i...

How much

s...

For whom w

...

0%

17%

65%

17%

1. What will be produced?

2. How will it be produced?

3. How much should be produced?

4. For whom will it be produced?

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In a market society ______________ makes decisions about how goods and services will be distributed whereas in a socialist society _________________ makes decisions about how goods and services will be distributed.

Indiv

idual...

Busines

ses..

.

Indiv

idual...

Gove

rnmen

t...

0% 0%

83%

17%

1. Individuals / corporations

2. Businesses / individuals

3. Individuals / government

4. Government / individuals

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Businesses receiving revenue from households is an exchange made in the

__________ market?

Product

Factor

Mone

y

Service

74%

13%

0%

13%

1. Product2. Factor3. Money4. Service

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A business buying the factors of production from a household happens within the

__________ market?

Product

Factor

Mone

y

Service

0% 0%5%

95%1. Product2. Factor3. Money4. Service

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What happens to Price and Quantity if Supply increases along a Demand curve?

Price r

ise...

Price d

rop...

Price r

ise...

Price d

rop...

5%

73%

9%14%

1. Price rises and quantity drops

2. Price drops and quantity drops

3. Price rises and quantity rises

4. Price drops and quantity rises

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21 22 23 24 25 26

A critical principal of capitalism is the idea of…

Communal o..

.

Voluntary .

..

Gove

rnmen

t...

Limite

d co..

.

4% 4%

17%

74%1. Communal

ownership2. Voluntary exchange3. Government

regulation4. Limited competition

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21 22 23 24 25 26

An assembly line can increase a factory’s productivity because it allows workers to…

Diversi

fy ...

Focus o

n a...

Put in ove

...

Use a

wide...

4% 4%4%

87%1. Diversify their skills2. Focus on a specific

task3. Put in overtime

hours on the job4. Use a wide range of

knowledge

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What is the difference b/w saving and investing?

Inve

sting ...

Savings a

r...

Savings a

r...

Inve

sting ...

0% 0%0%

100%1. Investing is spending later

2. Savings are deposits secured for a later undetermined use

3. Savings are hoping to get a return

4. Investing is self structured

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Which of the following is not a factor of production?

Land

Labor

Capita

l

Wag

es

0%

91%

0%9%

1. Land2. Labor3. Capital4. Wages

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This is a type of loan paid out over a considerable length of time. Usually 10, 15, or 30 years.

Bank

Financia

l

Mortg

age

Credit U

nion

0% 0%

100%

0%

1. Bank2. Financial3. Mortgage4. Credit Union

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Simple interest is determined by multiplying the rate by the ____________ whereas compound interest is determined

by multiplying the rate by the ____________.

Averag

e ba..

.

Orig

inal b...

Existin

g a...

Time /

ave..

.

0% 4%

17%

78%1. Average balance /

original loan amount2. Original balance /

current balance3. Existing amount owed /

original balance4. Time / average balance

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What is the most correct answer concerning minority issues over the last 60 years

regarding labor?

There hav

e...

There hav

e...

There hav

e...

There hav

e...

0% 0%

96%

4%

1. There have been less women entering the work force since WWII.

2. There have been less ethnic groups entering the work force since WWII.

3. There have been more women and African American entering the workforce since WWII and the Civil Rights movement of the 60’s.

4. There have been less African American entering the workforce since the Civil Rights movement.

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21 22 23 24 25 26

A good example of the effect of learning on income would be that…

Employers

...

Work

ers w

h...

Only

job a...

People

wit...

4%

83%

9%4%

1. Employers who learn to perform high-risk jobs always get paid more

2. Workers who learn to make high-demand products are well paid

3. Only job applicants with high school diplomas get job interviews

4. People with college degrees usually earn more that those with less education

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Alex and Dylan mow and trim lawns. Currently, each man mows and trims a lawn by himself, but the process takes a

long time. They would MOST LIKELY improve their efficiency if

Alex an

d D...

Alex m

ows ...

Alex tr

ims..

.

Alex an

d D...

4% 4%4%

87%1. Alex and Dylan mow a lawn

and them trim it together2. Alex mows a lawn while

Dylan trims the same lawn3. Alex trims Dylan’s lawn while

Dylan trims Alex’s lawn4. Alex and Dylan reduce the

number of lawns they mow and trim

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Who sets EQ price and quantity?

Produce

rs

Consumers

Both produ...

The suppli

er

0% 0%

100%

0%

1. Producers2. Consumers3. Both producers

and consumer4. The supplier

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Changes in technology affect the ______________ curve?

Supply

Deman

d

Both curve

s

Neithe

r curve

78%

4%

17%

0%

1. Supply2. Demand3. Both curves4. Neither curve

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Changes in income affect which curve

Supply

Deman

d

Both curve

s

Neithe

r curve

0% 4%13%

83%1. Supply2. Demand3. Both curves4. Neither curve

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If David’s cost of inputs goes up for his Chicken Finger Business, this will affect his ___________ curve and the

EQ price will ___________ and the EQ quantity will____________.

Deman

d / R...

Supply / R

...

Deman

d / d...

Supply / d

...

4% 0%4%

91%1. Demand / Rise,

drop2. Supply / Rise,

drop3. Demand / drop,

rise4. Supply / drop, rise

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If another similar company sets up business across the street from David’s Chicken Fingers, this will cause his ________________ curve to ____________ which will then cause his EQ price to ____________

and his EQ quantity to _____________.

Deman

d / r...

Supply / r

...

Deman

d / d...

Supply / d

...

9%0%

91%

0%

1. Demand / rise / rise, drop

2. Supply / rise / rise, drop

3. Demand / drop / drop, drop

4. Supply / drop / rise, rise

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An example of a price ceiling is _____________. This usually happens

___________ the EQ point.

Wag

es / b

elow

Minim

um W

a...

Rent c

ontr...

Rent c

ontr...

0% 4%

91%

4%

1. Wages / below2. Minimum Wage /

above3. Rent control /

below4. Rent control /

above

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An example of a price floor is

Rent c

ontrol

Wag

es

Minim

um w

age

Capita

l

0% 0%

87%

13%

1. Rent control2. Wages3. Minimum wage4. Capital

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Which of the following is NOT one of the uses of money?

Med

ium of ...

Standard

o...

Store of v

...

Source of ..

.

13%

61%

13%13%

1. Medium of Exchange

2. Standard of value ( AKA – unit of account)

3. Store of value4. Source of Capital

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Which of the following usually gets the best return?

CD (cert

if...

Saving ac

c...

Checkin

g a...

Mone

y mark

...

87%

4%0%9%

1. CD (certificate of deposit)

2. Saving account3. Checking account4. Money market

account

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The following is NOT one of the three types of business structures?

Sole pr

opr...

Partne

rships

Corporat

ions

They ar

e a...

4%

74%

13%9%

1. Sole proprietorships

2. Partnerships3. Corporations4. They are all types

of business structures

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Which NOT a characteristic of a sole proprietorship

One p

erson

...

One p

erson

...

Shared own...

Dividen

ds ...

5%

23%

68%

5%

1. One person reaps reward

2. One person held responsible

3. Shared ownership4. Dividends paid

annually

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A _______________ represents all the possible combinations of goods and services that an economy is

able to produce with a fixed amount of resources.

1. Linear Graph2. Supply and

Demand graph3. Production

Possibilities Curve4. Production

Capacity Table

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Negotiating with management on behalf of its employees is called…

Arbitr

ation

Med

iation

Corporat

e ...

Collecti

ve...

0% 0%0%0%

1. Arbitration2. Mediation3. Corporate

discrepancy4. Collective

Bargaining

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Which of the following is the correct order according to the characteristics listed? One seller / few sellers / large # of firms / unlimited # of firms

Olig

opoly

...

Mono

poly /...

Perfec

t Co..

.

Mono

poly /...

0% 0%0%0%

1. Oligopoly / Monopoly / Perfect Competition / Monopolistic Competition

2. Monopoly / Perfect Competition / Monopolistic Competition / Oligopoly

3. Perfect Competition / Oligopoly / Monopolistic Competition / Monopoly

4. Monopoly / Oligopoly / Monopolistic Competition / Perfect Competition

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With regard to current labor issues, our Nation has…

Shifted to

...

Shifted to

...

Become l

es...

Become l

es...

0% 0%0%0%

1. Shifted to more service jobs

2. Shifted to more manufacturing jobs

3. Become less competitive globally

4. Become less mobile

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The Taft-Hartley Act of 1947 was generally viewed negatively by labor unions because

it…

Mad

e it il

...

Disban

ded ...

Establis

he...

Exempted

m...

0% 0%0%0%

1. Made it illegal to require workers to join the unions before being hired

2. Disbanded the American Federation of Labor

3. Established right-to-work laws in all states

4. Exempted many assembly line workers from the national minimum wage laws

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Organizers of many high-interest sporting events such as the Super Bowl and the World Series usually set ticket prices lower than the usual

equilibrium price, citing fairness to the public as their concern. What names do economists give to the resulting set price and disequilibrium

situation?

Price c

eil...

Price c

eil...

Price f

loo...

Price f

loo...

0% 0%0%0%

1. Price ceiling; surplus2. Price ceiling;

shortage3. Price floor; shortage4. Price floor; surplus

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___________ is often property (like a house or farm) that the bank will receive if a

monetary loan is not paid

Mortg

age

Land

Real e

state

Collater

al

0% 0%0%0%

1. Mortgage2. Land3. Real estate4. Collateral

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

Which of the following is NOT part of GDP?

Consumer

E...

Gove

rnmen

t...

Taxes

Net Exp

orts

0% 0%0%0%

1. Consumer Expenditures

2. Government Expenditures

3. Taxes4. Net Exports

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

The base year’s value is always…

1 0 50 100

0% 0%0%0%

1. 12. 03. 504. 100

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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Demand for all goods and services within a nation combines to form

Deman

d

Quan

tity D

...

Aggregate

...

GDP de

mand

0% 0%0%0%

1. Demand2. Quantity

Demanded3. Aggregate

Demand4. GDP demand

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

The aggregate supply curve is…

Downward s

...

Upward sl

o... Flat

Vertica

l

0% 0%0%0%

1. Downward sloping2. Upward sloping3. Flat4. Vertical

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

When a person is out of work b/c their skills don’t match the job, this is called

___________ unemployment

Cyclic

al

Seaso

nal

Frictio

nal

Structu

ral

0% 0%0%0%

1. Cyclical2. Seasonal3. Frictional4. Structural

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

When a person is out of work due to a period of layoffs and recession, we call this

______unemployment

Cyclic

al

Seaso

nal

Frictio

nal

Structu

ral

0% 0%0%0%

1. Cyclical2. Seasonal3. Frictional4. Structural

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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Rising costs can create this type of inflation

Cost push

Cost pull

Deman

d pull

Cost ap

pro...

0% 0%0%0%

1. Cost push2. Cost pull3. Demand pull4. Cost appropriate

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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Which of the following tools of the FED has the most immediate affect on the money

supply

Changing

t...

Open

mark

e...

Raising

re...

None of th

...

0% 0%0%0%

1. Changing the discount rate

2. Open market operations

3. Raising reserve requirements

4. None of the above

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What problem might policymakers be trying to address if they increase funding of training programs covering skills such as computer repair, programming and networking?

Frictio

nal...

Structu

ral...

Cyclic

al u...

Seaso

nal u

...

0% 0%0%0%

1. Frictional unemployment

2. Structural unemployment

3. Cyclical unemployment

4. Seasonal unemployment

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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Government officials adopt an expansionary fiscal policy. Which action would be most

consistent with this policy

Raising

th...

Buying gov..

.

Incre

asing..

.

Raising

pe...

0% 0%0%0%

1. Raising the discount rate

2. Buying government bonds

3. Increasing government spending

4. Raising personal income tax rates

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Over a two-year period, the nation of Parthia experiences a steep decline in the unemployment rate, a rise in real GDP,

and a stabilized price level. Parthia appears to be…

At the s

ta...

At the b

eg...

Stagnati

ng...

In th

e mid...

0% 0%0%0%

1. At the start of a recession

2. At the beginning of a recession

3. Stagnating economically

4. In the middle of a boom period

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If the unemployment rate is rising and the GDP is falling, the fiscal policy that the federal government

should MOST likely follow is

Decrea

sing...

Decrea

sing...

Decrea

sing...

Decrea

sing...

0% 0%0%0%

1. Decreasing taxes2. Decreasing

spending3. Decreasing the

money supply4. Decreasing the

reserve requirement

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The nation of Welton needs to build a new dam to control flooding near its largest city. If Welton is a purely market economy, then these new improvements will be MOST

likely be left up to

The gove

rn...

The ind

ivi...

Anyone w

ho...

The owners

...

0% 0%0%0%

1. The government2. The individuals who are

willing to pay for the new dam

3. Anyone who would benefit from the dam

4. The owners of the property on which the dam would be built

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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A nation that has a comparative advantage in the production of some product should

Mak

e all t

...

Special

ize...

Avoid tr

ade

Man

ufactur

...

0% 0%0%0%

1. Make all the products it is good at

2. Specialize in making that product that it is best at

3. Avoid trade4. Manufacture more

and export less

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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This limits the amount of goods that can be brought into a country

Embargo

The SEC

NAFTA

Quota

s

0% 0%0%0%

1. Embargo2. The SEC3. NAFTA4. Quotas

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

Over the course of one year, the Japanese yen depreciates relative to the euro; which group of people would benefit

the most from this occurrence?

Europea

n c...

Europea

n c...

Japan

ese c

...

Japan

ese c

...

0% 0%0%0%

1. European consumers of European goods

2. European consumers of Japanese goods

3. Japanese consumers of Japanese goods

4. Japanese consumers of European goods

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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Those in favor of protectionist trade policies would MOST likely

Support

a ...

Call fo

r f...

Cite th

e n...

Believ

e th...

0% 0%0%0%

1. Support a reduction in tariffs

2. Call for fewer import restriction

3. Cite the need to preserve domestic industries

4. Believe that restrictions harm consumers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

Milo farms the same small plot of land his ancestors farmed. He exchanges wheat for products he needs from local producers. The

exchange value of the wheat changes little since the trade is governed by custom. What kind of economic system is Milo operating in?

Command

Traditio

nal

Mark

et

Capita

list

0% 0%0%0%

1. Command2. Traditional3. Market4. Capitalist

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

21 22 23 24 25 26 27 28 29 30

A tariff placed on foreign steel imports represents

A barrier

...

A balance

...

A subsid

y ...

An incr

eas..

.

0% 0%0%0%

1. A barrier to trade2. A balance of

payments deficit3. A subsidy to

domestic producers4. An increase in

domestic production

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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