Economics Assessment

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Economics Assessments 1.1.1 Scarcity, Choice, Opportunity Costs, and Comparative Advantage – Using examples, explain how scarcity, choice, opportunity costs affect decisions that households, businesses, and governments make in the market place and explain how comparative advantage creates gains from trade. 1. Willie loves ice cream. He has found a store that sells ice cream cones at a bargain price of $0.50 each. He has just eaten two of these cones but has not decided to buy a third one. Which of the following statements best explains the economic principle at work in Willie’s decision not to buy a third cone? A. Consumers weigh the additional costs and benefits before choosing to buy more goods. B. Consumers…show more content…
Tasha applies for a job as an engineer. D. The city of Upland builds a new nursing home. Answer: B 3. Recently, the hourly wage that parents are willing to pay babysitters increased dramatically. Higher pay will most likely cause which of the following changes in how babysitters divide their out-of-school time between babysitting and other activities? Time Spent Time Spent Babysitting on Other Activities A. No change Decrease B. Increase Decrease C. Decrease No change D. Increase Increase Answer: B 1.2.1 Business structures-Compare and contrast the functions and constraints facing economic institutions including small and large businesses, labor unions, banks, and households. 1. Which is the first step a labor union takes when negotiating contracts with employers? A. Engage in collective bargaining B. Start a plant lockout C. Demand binding arbitration D. Call for a strike Answer: A 2. If one of a firm’s fixed costs rises, A. its profit-maximizing output level will increase. B. its profit-maximizing output level will decrease. C. its profit-maximizing output level will not change. D. it would likely increase its price. Answer: C 3. What is one way to lower the cost of production? A. Hire additional workers B. Create new technologies C. Use more resources D. Cut more resources
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