Statistics for Test of Economic Knowledge

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General Stats

This quiz has been taken 27 times
The average score is 33 of 40

Answer Stats

Question	Answer	% Correct
Why are diamonds more expensive than water even though water is necessary for life and diamonds are not?	Diamonds are more scarce than water.	96%
What is the most likely reason why a business would cut the price of a product it sells?	To encourage more people to purchase the product.	96%
The economic problem of scarcity means that for individuals, governments, and societies the	wants for goods and services are greater than the available resources to meet them.	96%
It will cost Amanda an extra $30 to purchase a warranty for a $400 new camera that she is buying. If Amanda decides to buy the warranty she has concluded that the	benefit of the warranty is greater than its cost.	92%
Chicken and fish are substitutes for each other. If the cost of raising chickens increases, then the price of chicken will	increase and people will buy more fish.	92%
Expansion of international trade usually	increases worldwide production.	92%
Which is true about who gets the goods and services that are produced?	No method of distributing goods and services will satisfy everyone.	92%
Which of the following is typically true?	People’s choices have consequences for the future.	92%
If a high tariff was placed on steel shipped into the U.S.,	U.S. consumers would pay more for steel.	92%
A market-clearing price occurs when	quantity demanded equals quantity supplied.	88%
At the end of winter, retail clothing stores still have many winter coats for sale. The retail store owner can eliminate the	surplus by lowering the price.	88%
Workers’ wages usually increase when	demand for the products they produce increases.	85%
Most entrepreneurs start a new business because they expect to	earn a profit.	85%
There used to be one producer of a good in a market and now there are many competing producers. What is most likely to be the result?	Lower product price.	85%
There is little government ownership of farms and businesses in the country of Mala. People may change jobs and start new businesses. The government does not control prices and wages. What type of economy is Mala?	Market economy.	85%
The price of DVDs will decrease if the	supply of DVDs increases.	85%
Government spending less than taxes collected during a year is called	a budget surplus.	81%
Advances in technology result in	an increase in productivity.	81%
In the United States, prices for most goods and services are determined by the actions of	businesses and consumers.	81%
A major economic role that government is supposed to perform in a market economy is to	maintain competition.	81%
Amy is saving ten percent of her income a month. The money she saved is primarily functioning as a	store of value.	81%
Most wages and salaries in the United States are determined by	supply and demand.	81%
Which is most likely to influence the level of competition in markets?	The number of buyers and sellers.	81%
Inflation is the term used to describe	a general increase in prices.	77%
Which of the following people would the U.S. government count as unemployed?	A high school graduate who has not yet found a job but continues looking.	77%
A sales tax is a tax on	consumption.	77%
Banks make most of their profits by charging	higher rates of interest to borrowers than they pay depositors.	77%
What usually causes the standard of living in a country to increase over time?	Increased output per worker.	77%
In what way is a fireworks display a public good?	It can be seen by those who do not pay for it.	77%
When comparing the standard of living in one nation’s economy to another nation’s economy, GDP is typically adjusted in each nation by dividing GDP by a nation’s	population.	77%
To know if an increase in wages over a period of time has led to an increase in the standard of living, we must also look at changes in	prices of goods and services.	77%
Which will result from an increase in the demand for construction workers?	An increase in the wage of construction workers.	73%
If there is a large decrease in demand for corn and no change in supply,	consumers will pay a lower price for corn.	73%
Specialization and trade lead to	lower costs of goods and services.	73%
Which one of the following is correct?	Most nations create their own currency for use as money.	73%
One consequence of scarcity is that	people have to make choices among alternatives.	73%
The control of the money supply is the main responsibility of the	Federal Reserve System.	69%
What does the gross domestic product (GDP) measure?	The market value of final goods and services produced in a year.	69%
Jody bought shares of stock in a company. She and the other stockholders voted to elect its board of directors. The company is a	corporation.	65%
The opportunity cost of a decision is the	value of the next best alternative not chosen.	58%