PATERSON PUBLIC SCHOOLS

Economics Pre-Assessment

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Economics Pre Assessment

Directions: Choose the correct response for each question. Make sure that your answer is clearly marked. Each question is worth 2 points.

1. The study of how people seek to satisfy their needs and wants by making choices is the definition of a. Economics b. Scarcity c. Entrepreneur d. Macroeconomics

2. Economies that countries like China, North Korea, and Cuba are a. Market economies b. Command economies c. Mixed economies d. Traditional economies

3. The diagram below illustrates a. A circular flow model b. Lorenz curve c. Business cycle d. Demand curve

4. This Law states that as prices go up so does quantity supply. a. Law of Demand b. Law of Supply and Demand c. Law of Supply d. Law of Decreasing cost

5. When costs are known for businesses and they able to accurately account for them, these costs are known as a. Variable costs b. Mixed costs c. Law of increasing costs d. Fixed costs

6. This type of business organization is a legal entity owned by individual stockholders a. Partnerships b. Sole proprietorships c. Cooperatives d. Corporations

7. When firms supply meets their demand for products it is known as a. Equilibrium b. Disequilibrium c. Law of supply and demand d. Equilibrium wage

8. One of the most basic concepts of investing to insure one is spreading out risk is called a. Stocks b. Bonds c. Mutual funds d. Diversification

9. If an investor buys a stock for $50 per share and purchases 100 shares, what is the investor’s principal investment? a. $500 b. $20 c. $5,000 d. $50,000

10. Gross domestic product or GDP is a way economists study the economy of a country. GDP is an evaluation of a. The dollar value of all final goods and services produced within a country’s borders in a given year b. The debt amount of a country within a given year c. The dollar value of all final goods but not services within a country’s borders in a given year d. The dollar value of all final services provided but not goods within a country’s borders in a given year.

11. Adam Smith was a Scottish philosopher that believed in the concept laissez faire. Which economic system would he preach that would be the most beneficial to consumers. a. Command economy b. Mixed economy c. Market economies d. Traditional economies

12. This market is dominated by a single seller a. Perfect competition b. Monopolistic competition c. Oligopoly d. Monopoly

13. When countries choose to produce more or less of military goods or consumer goods, this concept is called a. Guns or butter b. Factor market c. Cash transfers d. Operating cost

14. The concept of opportunity cost a. Suggests that a major increase in public health care spending means an expansion in other areas will be harder to achieve b. Suggests that all of our needs can be achieved c. Is only relevant in a capitalist economy like the United States d. Would be irrelevant if we eliminated poverty

15. The circular flow of goods and incomes shows the relationship between a. Income and money b. Wages and salaries c. Firms and households d. Goods and services 16. Humans wants are a. Always fixed b. Limited c. Unlimited d. Likely to decrease over time

17. If one car company takes over another car company this is an example of what type of integration? a. Vertical b. Horizontal c. Conglomerate d. Literal

18. In perfect competition a. The products firms offer are very similar b. Products are heavily differentiated c. A few firms dominate the market d. Consumers have limited information

Open-Ended

19. Short Answer: You are expected to answer the question in 3-5 sentences

Below is a quote by Robert Kiyosaki. Explain what he is referring to…

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for”

20. Essay. You are expected to answer this question in 3-4 paragraphs

Describe three services that the government provides to its citizens. Identify some of the opportunity costs providing each of those services

Scoring

Multiple Choice #1-18 2pts each Short Answer #19 4pts Essay #20 6pts

Answer sheet Econ Pre

1. A 6.1.12.C.15.b 2. B 6.1.12.C.15.b 3. C 6.1.12.C.6.C 4. C 6.1.12.C.9.b 5. D 6.1.12.C.9.b 6. D 6.1.12.C.5.B 7. A 6.1.12.C.9.c 8. D 6.1.12.C.6.C 9. C 6.1.12.C.6.C 10. A 6.1.12.C.9.b 11. C 6.1.12.C.9.c 12. D 6.1.12.C.5.B 13. A 6.1.12.C.9.a 14. A 6.1.12.C.9.a 15. C 6.1.12.C.6.C 16. C 6.1.12.C.15.b 17. B 6.1.12.C.9.b 18. A 6.1.12.C.9.c 19. 4 point rubric 6.1.12.C.6.C 20. 6 point rubric 6.1.12.C.9.a