In a restaurant, cash registers,freezers, and grills areA economic goods.B free goods.C consumer goods.D capital goods.

Scarcity is the result of limitedresources andA the failure to produce whatconsumers want.B the lack of adequate technologicalprogress.C overpopulation in industrialcountries.D unlimited wants and needs.

In order for a product to have value it must have utility. Utility is the capacity toA produce industrial products.B provide a service in the market.C receive goods and services.D be useful and provide satisfaction.

The more units of a certaineconomic product a personacquires, the less eager that personis to buy more of that product.According to economists, this isthe principle of

A substitution effect.B income effect.C variable proportions.D diminishing marginal utility.

Dina likes two skirts, one red andone blue. She has enough moneyfor one, so she buys the red skirt.The blue skirt is the

A capital good.B limited resource.C opportunity cost.D commodity.

To maintain or increaseproduction in the dairy industry,the government provides

A productivity.B regulations.C subsidies.D rationing.

Which of the following would be amonetary incentive?

A a company carB a larger officeC an employee loungeD an assigned parking space

Which of the following would be anon-monetary incentive?

A overtimeB an office with a viewC an increased benefits packageD paid vacation

The economist who identified thatself-interest and competition drivea market economy was

A Thomas Malthus.B Milton Friedman.C Alan Greenspan.D Adam Smith.

Private property is an incentive ina market economy since itprovides the ability to

A avoid paying taxes on annualearnings.B enjoy productivity at the worksite.C keep any earned rewards.D share the benefits of publicservices.

Fundamental to capitalism is theability of individuals andbusinesses to own and control

A natural resources.B private property.C public utilities.D transportation facilities.

Which belief suggests thatgovernment should not interfere inits country’s business or economicaffairs?

A scarcityB voluntary exchangeC laissez-faireD quotas

Demand for goods will be more elastic if the goods

A are essential.B have many substitutes.C have no complements.D are trendy.

A local restaurant determines thathamburgers have a price elasticityof +2.0. If hamburger prices dropfrom $2.00 to $1.50, the restaurantwill supply how manyhamburgers?

A 50 percent more hamburgersB 25 percent less hamburgersC 25 percent more hamburgersD 50 percent less hamburgers

What happens to the demand for aluxury good when its priceincreases?A consumer demand will remain thesameB consumer demand will increaseC consumers will buy morecomplementary goodsD consumers will buy moresubstitute goods

Productivity is increased byspecialization because itA reduces employees needed.B reduces the work load ofemployees.C increases workers’ skills.D increases dependency on foreigncountries.

A hurricane hits the coast ofFlorida and subsequent weatherconditions destroy half of theoranges produced in orangeorchards. What happens to theprice and quantity of oranges onthe market?A The supply of oranges decreases,and the price of oranges increases.B The supply of oranges increases,and the price of orangesdecreases.C The supply of oranges decreases,and the price of orangesdecreases.D The supply of oranges increases,and the price of oranges increases.

Monopolies are

A price takers.B price setters.C competitive.D illegal.

What results when competitorsundercut the market price in anattempt to gain an advantage?

A interdependent pricingB price competitionC price leadershipD price war

In a competitive economy theadjustment process helps establisha relatively stable price wherequantity demanded is the same asquantity supplied. This point inthe market is called

A correction.B elasticity.C equilibrium.D surplus.

If Congress limits the number offoreign automobiles that enter theUnited States, prices of foreignautomobiles will

A increase because of technologycosts.B increase because of decrease insupply.C decrease because of newtechnology.D decrease because of increaseddomestic supply.

The role of an entrepreneur in amarket economy includes all thefollowing exceptA to take on the risk of enterprisewith his or her own resources insearch for profit.B to bring together the factors ofproduction to create a desiredproduct or service.C to lobby government for strongerbusiness regulations.D to explore and developed new, orunrecognized, markets andproducts.

When the sale of a product is nolonger generating a profit, thecompany producing the product ismost likely to

A continue making the product as itis and hope that consumer valueschange.B improve or alter the product tomeet the needs and interests ofconsumers.C petition the government forregulations that eliminatecompeting products.D decrease advertising costs to savemoney on the low-profit product.