! ! ! ! Name:!_____________________Date:__________Class:!_______!
©"2017"Clairmont"Press,"Inc."-"Page"1"of"6"
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Chapter!3:!Economic!Basics!!!
!
Part!I:!Selected!Response!(4!points!each)!!
Write&the&letter&of&the&BEST&response&for&each&of&the&following&items.&&
&
_______&1.&Which&of&the&following&BEST&describes&the&difference&between&needs&and&wants?&
A. Needs&are&things&that&are&necessary&to&survive.&Wants&are&things&that&are&nice&
to&have&or&luxuries.&
B. Needs&are&things&that&a re&expensive&and&necessary.&Wants&are&things&that&are&
cheap&and&luxuries.&
C. Needs&are&things&that&are&nice&to&have.&Wants&a re& things&that&are&necessary&to&
live.&&
D. Needs&are&things&that&you&really&want&to&have.&Wants&are&things&that&you&need&
to&have.&
&
_______&2.&& What&are&goods?&
A. things&that&people&do&for&other&people&
B. things&that&are&necessary&for&survival&
C. things&that&are&nice&to&have&
D. things&that&you&can&touch&
_______&3.&What&are&services?&
A. things&that&are&created&and&sold&to&other&people&
B. things&that&are&necessary&for&survival&
C. work&that&people&perform&&
D. work&that&is&a&luxury&
_______&4.&Which&of&the&following&BEST&describes&the&difference&between&a&consumer&&
&&&&and&a&producer?&
A. A&consumer&is&a&person&who&buys&a&good&or&service,&while&a&producer&is&a&
person&that&makes&goods&or&services.&
B. A&consumer&is&a&person&that&makes&a&good,&while&a&producer&is&a&person&that&
buys&a&good&or&service.&
C. A&consumer&is&a&person&that&provides&services&for&wants,&while&a&producer&is&
a&person&that&provides&services&as&luxuries.&
D. A&consumer&is&a&person&that&consumes&goods&to&meet&their&needs,&while&a&
producer&is&a&person&that&procures&goods&that&are&in&high&demand.&
Look&at&the&list&below.&
&
Farm&land&
Trees&
Cotton&
Solar&power&
&
! ! ! ! Name:!_____________________Date:__________Class:!_______!
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&
_______&5.&The&list&above&includes&examples&of&which&factor&of&production?&
A. natural&resources&
B. capital&goods&
C. human&resources&
D. entrepreneurship&
&
Look&at&the&list&below.&
Paper
Pencils
Computer
Hammer and nails
_______&6.&The&list&above&includes&examples&of&which&factor&of&growth?&
A. natural resources
B. capital goods
C. human resources
D. entrepreneurship
______&7.&What&is&the&difference&between&renewable&and&nonrenewable&resources?&
A. Renewable&resources&will&never&be&replaced,&while&nonrenewable&resources&
will&be&replaced&overtime.&
B. Renewable&resources&can&only&be&used&once,&while&nonrenewable&resources&
can&be&used&more&than&once.&
C. Renewable&resources&can&be&replaced&over&time,&while&nonrenewable&
resources&will&not&be&replaced&by&natu re.&
D. Renewable&resources&are&used&to&manufacture&high&demand&products,&while&
nonrenewable&resources&are&used&to&make&low&demand&products.&
_______&8.&Which&of&the&following&BEST&describes&human&capital?&
A. gifts&of&the&earth&
B. value&of&a&person’s&skills&and&education&
C. person&who&starts&her&own&business&
D. good&that&is&used&to&produce&other&goods&
_______&9.&Which&of&the&following&BEST&describes&entrepreneurship?&
A. gifts&of&the&earth&
B. value&of&a&person’s&skills&and&education&
C. person&who&starts&their&own&business&
D. good&that&is&used&to&produce&other&goods&
_______&10.&&Why&is&it&important&to&countries&to&invest&in&the&factors&of&production?&
A. Investing&in&the&factors&of&production&allows&countries&to&keep&their&economy&
small&and&manageable.&
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B. Investing&in&the&factors&of&production&makes&it&easier&for&countries&to&trade&
their&scarce&goods.&
C. Investing&in&the&factors&of&production&allows&countries&to&purchase&goods&
from&other&countries&for&lower&prices.&
D. Investing&in&the&factors&of&production&allows&countries&to&grow&their&
economies.&
&
_______&11.&What&is&scarcity?&
A. there&is&a&low&demand,&but&a&high&supply&
B. there&is&a&low&demand&and&a&low&supply&
C. there&is&a&high&demand,&but&limited&supply&
D. there&is&a&high&demand&and&a&high&supply&
_______&12.&What&is&an&opportunity&cost?&
A. process&through&which&a&country&decides&how&to&best&use&its&resources&
B. when&a&person&makes&a&decision,&it&is&the&value&of&the&next&best&alternative&
C. when&a&person&makes&the&decision&to&have&less&of&one&thing&to&get&more&of&
something&else&
D. the&process&through&which&a&country&decides&to&import&some&resources&in&
order&to&create&more&specialized&exports&
&
_______&13.&What&is&supply?&
A. amount&of&a&good&for&sale&
B. amount&of&a&good&that&is&in&demand&
C. amount&of&a&good&that&people&are&willing&to&buy&
D. amount&of&a&good&that&people&need&in&order&to&survive&
&
_______&14.&What&is&demand?&
A. amount&of&a&good&that&is&for&sale&
B. amount&of&a&good&that&people&need&
C. amount&of&a&good&that&people&are&willing&to&buy&
D. amount&of&a&good&that&can&be&easily&replaced&by&producers&
&
_______&15.&Why&do&producers&sometimes&make&a&small&amount&of&a&good?&
A. a&smaller&amount&of&their&good&will&increase&the&price&
B. a&smaller&amount&of&their&good&will&decrease&the&price&
C. a&smaller&amount&of&their&good&will&decrease&the&demand&
D. a&smaller&amount&of&their&good&will&increase&the&amount&that&is&sold&
&
&
&
_______&16.&In&a&traditional&economy,&how&are&the&three&economic&questions&answered?&
A. traditions,&beliefs,&and&habits&&
B. government&planners&
C. supply&and&demand&
D. trade&and&specialization&
! ! ! ! Name:!_____________________Date:__________Class:!_______!
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&
_______&17.&In&a&market&economy,&how&are&the&three&economic&questions&answered?&
A. traditions,&beliefs,&and&habits&&
B. government&planners&
C. supply&and&demand&
D. trade&and&specialization&
&
Read&the&information&in&the&box.&
In&the&1970s,&the&government&of&the&Soviet&Union&was&heavily&involved&with&the&economy.&
In&fact,&to&even&make&toilet&paper,&the&government&had&to&make&many&decisions.&One&result&
of&this&kind&of&economy&was&that&there&were&constant&shortages&of&products.&
&
&
_______&18.&Based&on&the&scenario&above,&what&kind&of&economy&did&the&Soviet&Union&have?&
A. traditional&
B. command&
C. market&
D. balanced&
&
_______&19.&What&is&the&gross&domestic&product?&
A. total&value&of&all&goods&and&services&a&country&exports&each&year&
B. total&value&of&all&goods&and&services&a&country&imports&each&year&
C. total&value&of&all&goods&and&services&produced&in&one&country&in&one&year&
D. total&value&of&all&goods&and&services&in&which&a&country&specializes&&
&
_______&20&What&is&inflation?&
A. continual&increase&in&the&demand&for&goods&and&services&
B. continual&decrease&in&the&demand&for&goods&and&services&
C. continual&increase&in&the&price&of&goods&and&services&
D. continual&decrease&in&the&price&of&goods&and&services&
&
&
Look&at&the&chart&below&
&
A&
B&
C&
D&
A&tax&on&imported&
goods&
&
&
&
Increases&the&price&
of&a&good&for&
consumers&
A&limit&on&the&
amount&of&goods&
imported&
&
&
Increases&the&price&
of&a&good&for&
consumers&
Money&given&to&
certain&businesses&to&
keep&them&
competitive&
&
Allows&businesses&to&
compete&with&
imports&
Rules&that&are&set&
concerning&imports&
and&goods&
&
&
The&imports&
available&to&
consumers&are&high&
quality&
&
! ! ! ! Name:!_____________________Date:__________Class:!_______!
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_______&21.&Which&of&the&columns&correctly&defines&tariff?&
A. A&
B. B&
C. C&
D. D&
&
_______&22.&Which&of&the&columns&correctly&defines&standard?&
A. A&
B. B&
C. C&
D. D&
&
_______&23.&Why&do&countries&need&exchange&rates?&
A. They&can&determine&what&to&export.&
B. They&can&determine&what&to&import.&
C. They&are&able&to&trade&with&other&countries.&
D. They&are&able&to&sell&their&exports&at&lower&prices.&
Part!II:!Constructed!Response!(10!points)!
&
24.&Why&do&countries&today&have&mixed&economies?&
&
&
25.&Why&do&countries&use&trade&barriers?&Give&three&examples&of&trade&barriers.&
& &
& &
! ! ! ! Name:!_____________________Date:__________Class:!_______!
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Chapter!3!Assessment!Key!
&
1. A& DOK&2&& & & & & &
2. D& DOK&1&
3. C& DOK&1&
4. A& DOK&2&
5. A& DOK&2&
6. B& DOK&2&
7. C& DOK&2&
8. B& DOK&1&
9. C& DOK&1&
10. D& DOK&2&
11. C& DOK&1&
12. B& DOK&1&
13. A& DOK&1&
14. C& DOK&1&
15. A& DOK&2&
16. A& DOK&1&
17. C& DOK&1&
18. B& DOK&2&
19. C& DOK&1&
20. C& DOK&1&
21. A& DOK&2&
22. D& DOK&2&
23. C& DOK&2&
24. Countries&have&mixed&economies&because&they&have&realized&to&be&successful&there&
must&be&elements&of&both&market&and&command&economies.&
25. Countries&use&trade&barriers&to&protect&busin esses&in&their&own&countries.&Possible&
examples&include:&tariff,&quota,&embargo,&standard,&and&subsidy.&
!
Key&and&Webb’s&Depth&of&
Knowledge&(DOK)&level&are&
shown&for&each&item.&
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