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A product of the earth (“gift of nature”) that people use to meet their needs is a A good.B natural resource. C free enterprise. D service.

The number limit on how many items of a particular product can be imported f rom a particular country is theA demand.B quota. C supply. D tariff.

The economic system of communist countries is most closely related to which of the following:A Command economy.B Market economy.C Traditional economy. D Mixed economy.

Which of the following is NOT one of the basic questions that all economic systems must answer:A What to produce? B How to produce?C How much to produce?D For whom to produce?

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A market economy is very dif f erent f rom a command economic system or a traditional system. Which of the following is found in a market economy?A Free laborB Competition between businesses C Government control of industryD Government control of agriculture

In a command economy, economic decisions are made by theA consumers.B market.C government. D producers.

Which is an example of human capital? A EducationB RoadsC FactoriesD Machinery

Who owns the resources in a commandeconomy?A the government B no oneC individualsD private businesses

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How are goods and services exchanged in a traditional economy?A through prices and wagesB through government regulation C through barteringD through shortages and surpluses

Which trade barrier sets up a complete ban on trading between countries?A mountainB tariff C quotaD embargoThere are no truly pure Market economic

systems, but which of the following countries is the close?A Cuba B Russia C ChinaD United States

What is an example of a physical tradebarrier? A quota B tariffC mountainD embargo

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Which of the following BEST describes a market system? A The government provides services, such as telephones and television.B A person can start any legal business and charge anyprice.C The government provides food and housing to all workers.D Businesses are owned by the government.

Why is it important f or a country to invest in human capital? A A country needs money in order to pay its workers.B Workers enjoy getting extra training and job opportunities. C Businesses cannot do all the training needed by workers to be successful.D A country’s economy is more successful when workers have good education and health care.

What is an entrepreneur?A A person who starts a new business. B A leader of a country.C A worker in a factory.D A student in college.

When a government decides to increase a tariff, it increases the amount of a tax placed uponA people’s income. B imported goods.C renewable resources. D people’s property.

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Most democratic nations have

economies.A mixed.B traditional. C command.D market.

This is an economic system where people follow the occupation of their ancestors: A command.B market. C mixed.D traditional.

What is a literate adult LEAST likely to have?A good health careB a high-paying jobC access to modern technology D uneducated children

What is a main reason for people to exchange currency?A to have foreign moneyB to use American dollars to tradeC to make more money by trading currenciesD to buy and sell goods and services with othercountries

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Which of the following would be MOST helpful to improving a country’s standard of living?A decreasing the literacy rate B increasing the literacy rateC reducing the number of factoriesD creating more low-paying job

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 ofA Trade surplus B EntrepreneurC Gross domestic product D Opportunity Costs

Which is an example of a company investing in capital goods?A providing health care for workersB providing classes for workers to learn new skills C keeping an old machine to see if it will last longer D buying new computers to build products more quickly

What are the three economic systems? Define each one.

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What are the three types of trade barriers? Define each one.

What are the four factors of production? Give an example of each one.

How does a country’s literacy rate affect its standard of living?

Explain why there are no countries with a truly pure Market economy?

Name: ________________________

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1 B 2 B 3 A 4 C

5 B 6 C 7 A 8 A

9 C 10 D 11 D 12 C

13 B 14 D 15 A 16 B

17 A 18 D 19 D 20 D

21 B 22 B 23 D 24 Command-government controls everything, Traditional-based on customs& beliefs of past, Market-citizens make all economic decisions

25 Tariff-tax on imported goods, Quota-limit on imported goods, Embargo- complete ban on trading

26 Natural Resources-trees, Capital Resources-computers, Human Capital- education, Entrepreneur-Walt Disney

27 High literacy rate = high standardof living (quality of life for citizens)

28 The government is involved in some way in every economy—for example, the government regulates the safety of goods produced.