BASIC ECONOMICS PRE-POST TEST
________1. Marti paid to get her haircut. At the hair salon, she also bought some shampoo.
Which is true about her purchases?
a. The haircut and the shampoo are both goods.
b. The haircut and the shampoo are both services.
c. The haircut is a good, and the shampoo is a service.
d. The haircut is a service, and the shampoo is a good.
_________2. Why do people make economic choices?
a. Their wants are greater than their resources. b. Their resources are greater than their wants.
c. Government makes them choose. d. Businesses make them choose.
___________3. What is opportunity cost?
a. The time you spend deciding what to buy.
b. The amount of money you pay for something.
c. The money you have left after you buy something.
d. The best thing you give up in order to get something else.
___________4. Which of the following would be the best example of a capital good?
a. sand
b. water
c. truck driver
d. cement truck
__________5. Erin wanted to buy five pairs of jeans, but decides to buy only two pairs so she
can save more money to buy a computer. Erin’s decision is an example of
a. paying interest.
b. borrowing money. c. making a tradeoff.
d. choosing a service.
__________6. In a market economy, which group has the most influence on what is produced?
a. Unions
. b. Banks.
c. Consumers.
d. Government.
__________7. A reward or penalty for how people behave is a.
a trade-off.
b. an incentive.
c. an economic want. d. a voluntary exchange.
__________8. Human capital consists of
a. stocks and bonds. b. plant and equipment. c. knowledge and skills. d. savings and investment.
________9. Alex trades his ice hockey stick for Sam’s soccer ball. What is this exchange called?
a. Barter.
b. Export.
c. Borrowing.
d. Allocation.
_________10. Kevin offers to trade two of his books for one of Julie’s games. Julie accepts
Kevin’s offer. After this trade is made, which is most likely true?
a. Julie is better off but Kevin is worse off. b. Kevin is better off but Julie is worse off.
c. Both of them are better off. d. Both of them are worse off.
___________11. The United States sells soybeans to Japan. Soybeans are
a. exported goods.
b. durable goods.
c. capital goods.
d. public goods.
______12. Specialization allows people to produce more goods and services because it results in
a. less trade. b. more jobs. c. lower wages.
d. higher productivity.
_________13. What can be a problem with specializing to produce bookmarks in a class project?
a. One of the students could get behind and slow down production.
b. Students will take more time to make the bookmarks.
c. It helps students develop special skills.
d. Students will make more bookmarks.
_________14. In a competitive market for bananas, what will most likely change to cause the
amount sellers produce to equal the amount buyers want to buy?
a. The price of bananas.
b. The quality of bananas.
c. The taxes paid on bananas.
d. The profit from selling bananas.
_________15. An increase in the price of a good or service usually leads to
a. no change in the amount people will buy.
b. a decrease in the amount people will buy.
c. an increase in the amount people will buy.
d. either an increase or a decrease in the amount people will buy.
________16. A market with only one seller of a good or service is called
a. demand.
b. competition.
c. a monopoly.
d. an economy.
________17. At a beach popular with local students, which situation would probably lead to the
lowest price for hotdogs?
a. Having many hotdog sellers.
b. Having only one hotdog seller.
c. Having more students who like hotdogs.
d. Having fewer students who like hamburgers.
_________18. A bank pays you for saving your money. What is this payment called?
a. Loan.
b. Profit.
c. Credit.
d. Interest.
____19. Juan has a weekly income of $600. He spends $200 a week to pay rent for his apartment
and spends $300 for all other goods and services. How much does Juan save each week?
a. $100.
b. $200.
c. $300.
d. $400.
________20. Why do most people use money to buy things instead of bartering to get them?
a. People like to spend their money.
b. Money is a productive resource.
c. Banks give people money.
d. Money is easier to use.
__________21. The value of a dollar depends on how much
a. you spend.
b. you can buy with it.
c. gold the government owns.
d. price changes on the stock market
_________22. Most people earn their income by exchanging their human resources for
a. rent.
b. interest.
c. profits or losses. d. wages or salaries.
__________23. Jobs usually pay a higher salary when
a. they have a job title.
b. more education is required.
c. people must be interviewed.
d. an ad has to be placed in a newspaper.
___________24. An entrepreneur is someone who
a. manages a bank.
b. starts a new business.
c. works for the government.
d. trades goods with foreign countries.
_____________25. Chris started a summer business selling tomatoes. He sold tomatoes for $300
and his business costs were $250. The $50 that was left over was his
a. price.
b. costs.
c. profit.
d. revenue.
____________26. One way to improve human capital is to
a. buy stocks. b. gain job experience.
c. sell new equipment. d. increase worker wages.
___27. Which of the following is most likely to improve the productivity of workers at a factory?
a. Increasing the taxes on their income.
b. Adding rules that increase work time.
c. Giving them more capital goods to use.
d. Hiring more workers for the same jobs.
_______28. Most of the money used to pay for police departments comes from
a. prices paid for police services.
b. taxes paid to the government.
c. insurance paid for police services.
d. donations given to police departments.
________29. What does inflation mean?
a. Fewer people have jobs.
b. More people have jobs.
c. A fall in most prices.
d. A rise in most prices.
_________30. To be counted as unemployed, a person does not have a job and
a. receives money from government. b. is looking for work. c. has few job skills. d. is poor.
________31. Which is an example of a service?
a. A taxi ride. b. A new shirt.
c. A computer.
d. A washing machine.
_________32. Scarcity means
a. not wanting more of something.
b. there is enough of something for everyone.
c. not having as much of something as someone else.
d. there is not enough of something for all people who want it.
________33. The opportunity cost of going to a movie is
a. the value you get for seeing the movie.
b. what you give up to go to the movie.
c. the cost of showing the movie.
d. the cost of making the movie.
__________34. Machines and tools used to make products are called
a. public goods.
b. credit goods.
c. capital goods.
d. consumer goods.
__________35. Randy can use his money to buy six games or six shirts. He decides to buy three
games and three shirts. This decision would be an example of
a. buying now and saving later.
b. making an all or nothing choice.
c. trading off one good for another.
d. economic resources being greater than economic wants.
_________36. Which is true about who gets the goods and services that are produced?
a. Most societies have an equal distribution of goods and services.
b. No method of distributing goods and services will satisfy everyone.
c. All methods of distributing goods and services will satisfy everyone.
d. All societies use the same method for distributing goods and services.
__________37. A reward or penalty for how people behave is
a. a trade-off. b. an incentive. c. an economic want.
d. a voluntary exchange.
___________38. Human capital consists of
a. stocks and bonds. b. plant and equipment. c. knowledge and skills. d. savings and investment.
____39. Your friend has a game you want. To get it from her, you will have to give her
something
a. you don’t want anymore.
b. she wants more than the game.
c. you value more than the game.
d. that costs the same as the game.
____________40. International trade usually
a. decreases worldwide living standards.
b. increases worldwide unemployment.
c. decreases worldwide cooperation.
d. increases worldwide production.
_______41. The United States buys airplanes from Brazil. For the United States, these airplanes
would be an example of
a. an imported good. b. an exported good. c. a natural resource. d. human capital.
______42. Specialization allows people to produce more goods and services because it results in
a. less trade.
b. more jobs. c. lower wages.
d. higher productivity.
_________43. Specialization and trade lead to
a. less economic interdependence.
b. lower costs of goods and services.
c. fewer choices of goods and services.
d. fewer exchanges of goods and services.
____________44. When buyers and sellers trade with one another, this is called a.
a market.
b. production. c. an economy.
d. specialization.
____________45. An increase in the price of a good or service usually leads to
a. no change in the amount people will buy.
b. a decrease in the amount people will buy.
c. an increase in the amount people will buy.
d. either an increase or a decrease in the amount people will buy.
___________46. A market with only one seller of a good or service is called
a. demand.
b. competition.
c. a monopoly.
d. an economy.
_____________47. In our economy, competition
a. helps keep prices down.
b. helps prevent recessions.
c. means that all workers will have jobs.
d. means that all businesses will make a profit.
___________48. Jason borrows money from a bank by taking out a loan. The payment Jason
makes for the use of the money from a bank is
a. investment.
b. interest.
c. credit.
d. profit.
__________49. The part of a person’s income that is not spent on goods or services or paid to
the government is called
a. saving.
b. credit.
c. profit.
d. interest.
__________50. Why do most people use money to buy things instead of bartering to get them?
a. People like to spend their money.
b. Money is a productive resource.
c. Banks give people money.
d. Money is easier to use.
_____________51. The value of a dollar depends on how much
a. you spend.
b. you can buy with it.
c. gold the government owns.
d. price changes on the stock market.
_________52. The payment for work people do is called
a. wages.
b. profit.
c. saving.
d. interest.
________53. Most skilled workers are paid more than unskilled workers because skilled workers
a. are in greater supply.
b. have more bills to pay.
c. have spent fewer years in school.
d. produce more than unskilled workers.
_________54. Ms. Reed teaches fifth grade. She decides to stop teaching and start her own
business selling sports equipment. Ms. Reed has decided to become
a. an entrepreneur.
b. an administrator. c. an accountant.
d. an employee.
___________55. Which one of the following businesses made a profit?
a. Sales $10; Costs $15. b. Sales $24; Costs $25. c. Sales 10; Costs $10. d. Sales $20; Costs $15.
__________56. Muriel is a babysitter. Which is a way Muriel can increase her human capital?
a. Babysit only one child at a time.
b. Charge a higher price for her baby sitting.
c. Attend a class to improve her babysitting skills.
d. Purchase toys to use with the children she babysits.
___________57. The main reason that businesses update their equipment is to
a. keep their employees.
b. impress their competition.
c. raise their cost of production.
d. increase worker productivity.
____________58. Taxes are used to pay for the
a. costs of businesses.
b. interest paid by banks.
c. services of government.
d. wages of factory workers.
____________59. What does inflation mean?
a. Fewer people have jobs.
b. More people have jobs.
c. A fall in most prices.
d. A rise in most prices.
_____________60. Which of the following would be counted as unemployed?
a. A retired teacher.
b. An adult in prison.
c. An adult looking for a first job.
d. A factory worker at an auto plant.
________1. Marti paid to get her haircut. At the hair salon, she also bought some shampoo.
Which is true about her purchases?
a. The haircut and the shampoo are both goods.
b. The haircut and the shampoo are both services.
c. The haircut is a good, and the shampoo is a service.
d. The haircut is a service, and the shampoo is a good.
_________2. Why do people make economic choices?
a. Their wants are greater than their resources. b. Their resources are greater than their wants.
c. Government makes them choose. d. Businesses make them choose.
___________3. What is opportunity cost?
a. The time you spend deciding what to buy.
b. The amount of money you pay for something.
c. The money you have left after you buy something.
d. The best thing you give up in order to get something else.
___________4. Which of the following would be the best example of a capital good?
a. sand
b. water
c. truck driver
d. cement truck
__________5. Erin wanted to buy five pairs of jeans, but decides to buy only two pairs so she
can save more money to buy a computer. Erin’s decision is an example of
a. paying interest.
b. borrowing money. c. making a tradeoff.
d. choosing a service.
__________6. In a market economy, which group has the most influence on what is produced?
a. Unions
. b. Banks.
c. Consumers.
d. Government.
__________7. A reward or penalty for how people behave is a.
a trade-off.
b. an incentive.
c. an economic want. d. a voluntary exchange.
__________8. Human capital consists of
a. stocks and bonds. b. plant and equipment. c. knowledge and skills. d. savings and investment.
________9. Alex trades his ice hockey stick for Sam’s soccer ball. What is this exchange called?
a. Barter.
b. Export.
c. Borrowing.
d. Allocation.
_________10. Kevin offers to trade two of his books for one of Julie’s games. Julie accepts
Kevin’s offer. After this trade is made, which is most likely true?
a. Julie is better off but Kevin is worse off. b. Kevin is better off but Julie is worse off.
c. Both of them are better off. d. Both of them are worse off.
___________11. The United States sells soybeans to Japan. Soybeans are
a. exported goods.
b. durable goods.
c. capital goods.
d. public goods.
______12. Specialization allows people to produce more goods and services because it results in
a. less trade. b. more jobs. c. lower wages.
d. higher productivity.
_________13. What can be a problem with specializing to produce bookmarks in a class project?
a. One of the students could get behind and slow down production.
b. Students will take more time to make the bookmarks.
c. It helps students develop special skills.
d. Students will make more bookmarks.
_________14. In a competitive market for bananas, what will most likely change to cause the
amount sellers produce to equal the amount buyers want to buy?
a. The price of bananas.
b. The quality of bananas.
c. The taxes paid on bananas.
d. The profit from selling bananas.
_________15. An increase in the price of a good or service usually leads to
a. no change in the amount people will buy.
b. a decrease in the amount people will buy.
c. an increase in the amount people will buy.
d. either an increase or a decrease in the amount people will buy.
________16. A market with only one seller of a good or service is called
a. demand.
b. competition.
c. a monopoly.
d. an economy.
________17. At a beach popular with local students, which situation would probably lead to the
lowest price for hotdogs?
a. Having many hotdog sellers.
b. Having only one hotdog seller.
c. Having more students who like hotdogs.
d. Having fewer students who like hamburgers.
_________18. A bank pays you for saving your money. What is this payment called?
a. Loan.
b. Profit.
c. Credit.
d. Interest.
____19. Juan has a weekly income of $600. He spends $200 a week to pay rent for his apartment
and spends $300 for all other goods and services. How much does Juan save each week?
a. $100.
b. $200.
c. $300.
d. $400.
________20. Why do most people use money to buy things instead of bartering to get them?
a. People like to spend their money.
b. Money is a productive resource.
c. Banks give people money.
d. Money is easier to use.
__________21. The value of a dollar depends on how much
a. you spend.
b. you can buy with it.
c. gold the government owns.
d. price changes on the stock market
_________22. Most people earn their income by exchanging their human resources for
a. rent.
b. interest.
c. profits or losses. d. wages or salaries.
__________23. Jobs usually pay a higher salary when
a. they have a job title.
b. more education is required.
c. people must be interviewed.
d. an ad has to be placed in a newspaper.
___________24. An entrepreneur is someone who
a. manages a bank.
b. starts a new business.
c. works for the government.
d. trades goods with foreign countries.
_____________25. Chris started a summer business selling tomatoes. He sold tomatoes for $300
and his business costs were $250. The $50 that was left over was his
a. price.
b. costs.
c. profit.
d. revenue.
____________26. One way to improve human capital is to
a. buy stocks. b. gain job experience.
c. sell new equipment. d. increase worker wages.
___27. Which of the following is most likely to improve the productivity of workers at a factory?
a. Increasing the taxes on their income.
b. Adding rules that increase work time.
c. Giving them more capital goods to use.
d. Hiring more workers for the same jobs.
_______28. Most of the money used to pay for police departments comes from
a. prices paid for police services.
b. taxes paid to the government.
c. insurance paid for police services.
d. donations given to police departments.
________29. What does inflation mean?
a. Fewer people have jobs.
b. More people have jobs.
c. A fall in most prices.
d. A rise in most prices.
_________30. To be counted as unemployed, a person does not have a job and
a. receives money from government. b. is looking for work. c. has few job skills. d. is poor.
________31. Which is an example of a service?
a. A taxi ride. b. A new shirt.
c. A computer.
d. A washing machine.
_________32. Scarcity means
a. not wanting more of something.
b. there is enough of something for everyone.
c. not having as much of something as someone else.
d. there is not enough of something for all people who want it.
________33. The opportunity cost of going to a movie is
a. the value you get for seeing the movie.
b. what you give up to go to the movie.
c. the cost of showing the movie.
d. the cost of making the movie.
__________34. Machines and tools used to make products are called
a. public goods.
b. credit goods.
c. capital goods.
d. consumer goods.
__________35. Randy can use his money to buy six games or six shirts. He decides to buy three
games and three shirts. This decision would be an example of
a. buying now and saving later.
b. making an all or nothing choice.
c. trading off one good for another.
d. economic resources being greater than economic wants.
_________36. Which is true about who gets the goods and services that are produced?
a. Most societies have an equal distribution of goods and services.
b. No method of distributing goods and services will satisfy everyone.
c. All methods of distributing goods and services will satisfy everyone.
d. All societies use the same method for distributing goods and services.
__________37. A reward or penalty for how people behave is
a. a trade-off. b. an incentive. c. an economic want.
d. a voluntary exchange.
___________38. Human capital consists of
a. stocks and bonds. b. plant and equipment. c. knowledge and skills. d. savings and investment.
____39. Your friend has a game you want. To get it from her, you will have to give her
something
a. you don’t want anymore.
b. she wants more than the game.
c. you value more than the game.
d. that costs the same as the game.
____________40. International trade usually
a. decreases worldwide living standards.
b. increases worldwide unemployment.
c. decreases worldwide cooperation.
d. increases worldwide production.
_______41. The United States buys airplanes from Brazil. For the United States, these airplanes
would be an example of
a. an imported good. b. an exported good. c. a natural resource. d. human capital.
______42. Specialization allows people to produce more goods and services because it results in
a. less trade.
b. more jobs. c. lower wages.
d. higher productivity.
_________43. Specialization and trade lead to
a. less economic interdependence.
b. lower costs of goods and services.
c. fewer choices of goods and services.
d. fewer exchanges of goods and services.
____________44. When buyers and sellers trade with one another, this is called a.
a market.
b. production. c. an economy.
d. specialization.
____________45. An increase in the price of a good or service usually leads to
a. no change in the amount people will buy.
b. a decrease in the amount people will buy.
c. an increase in the amount people will buy.
d. either an increase or a decrease in the amount people will buy.
___________46. A market with only one seller of a good or service is called
a. demand.
b. competition.
c. a monopoly.
d. an economy.
_____________47. In our economy, competition
a. helps keep prices down.
b. helps prevent recessions.
c. means that all workers will have jobs.
d. means that all businesses will make a profit.
___________48. Jason borrows money from a bank by taking out a loan. The payment Jason
makes for the use of the money from a bank is
a. investment.
b. interest.
c. credit.
d. profit.
__________49. The part of a person’s income that is not spent on goods or services or paid to
the government is called
a. saving.
b. credit.
c. profit.
d. interest.
__________50. Why do most people use money to buy things instead of bartering to get them?
a. People like to spend their money.
b. Money is a productive resource.
c. Banks give people money.
d. Money is easier to use.
_____________51. The value of a dollar depends on how much
a. you spend.
b. you can buy with it.
c. gold the government owns.
d. price changes on the stock market.
_________52. The payment for work people do is called
a. wages.
b. profit.
c. saving.
d. interest.
________53. Most skilled workers are paid more than unskilled workers because skilled workers
a. are in greater supply.
b. have more bills to pay.
c. have spent fewer years in school.
d. produce more than unskilled workers.
_________54. Ms. Reed teaches fifth grade. She decides to stop teaching and start her own
business selling sports equipment. Ms. Reed has decided to become
a. an entrepreneur.
b. an administrator. c. an accountant.
d. an employee.
___________55. Which one of the following businesses made a profit?
a. Sales $10; Costs $15. b. Sales $24; Costs $25. c. Sales 10; Costs $10. d. Sales $20; Costs $15.
__________56. Muriel is a babysitter. Which is a way Muriel can increase her human capital?
a. Babysit only one child at a time.
b. Charge a higher price for her baby sitting.
c. Attend a class to improve her babysitting skills.
d. Purchase toys to use with the children she babysits.
___________57. The main reason that businesses update their equipment is to
a. keep their employees.
b. impress their competition.
c. raise their cost of production.
d. increase worker productivity.
____________58. Taxes are used to pay for the
a. costs of businesses.
b. interest paid by banks.
c. services of government.
d. wages of factory workers.
____________59. What does inflation mean?
a. Fewer people have jobs.
b. More people have jobs.
c. A fall in most prices.
d. A rise in most prices.
_____________60. Which of the following would be counted as unemployed?
a. A retired teacher.
b. An adult in prison.
c. An adult looking for a first job.
d. A factory worker at an auto plant.