Name
Room 3129 – Ms. Jackson
Period
ECONOMIC ASSESSMENT TEST - FREE ENTERPRISE SYSTEM
Multiple Choice: Select a letter that best completes the statement or answers the
question. Type your answer choice in the designated answer blank. [4 points each].
1. An entrepreneur is:
A. Someone who invests time and money to start a business.
B. Someone who makes a lot of money.
C. Someone who manages a business.
D. Someone who owns a business.
E. Both A & D.
Answer:
2. The following is a description of the Free Enterprise System:
Answer:
A. An economy best described as laissez faire.
B. An economy completely controlled and administered by the Government.
C. An economy with few business restrictions and controls.
D. An economy with many business restrictions and controls.
3. Choose the term below which best describes Economics.
A. Plentiful Resources
B. Scarcity
C. Limited Resources
D. Exponentially Growing Population
Answer:
4. What is Opportunity Cost in one short sentence? Give an example.
Answer:
5. What is the difference between gross versus net pay?
Answer:
A. Gross is the amount of money you get after taxes Net is before taxes.
B. Gross and Net amounts are pretty much the same when you make between
$40,000.00 and $60,000.00 every year.
C. Net is the amount of money after taxes Gross is the amount before taxes no
matter how much money you make.
D. Net is the amount of money after taxes gross is the amount before taxes only
when you make more than $20,000.00.
6. How many products are compared in a Product Possibilities Curve?
Answer:
7. Supply and Price have a
correlation/relationship. As a Supply increases, the Price
. However, as the Supply decreases, the Price will
.
8. The following are included in a business plan :
A. Financial information, production plans, personnel policies.
B. Goals of the business and how they will be achieved.
C. A step by step plan for the success of your business.
D. All of the above.
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Answer:
9. A market survey is important because it tells you:
A. How many & what types of people are shopping at a store.
B. Tells you what the customer will buy.
C. Tells you how much the customer will pay for the product.
D. All of the above.
Answer:
10. The following are characteristics of a F.E.S. Economy:
Answer:
A. Heavy taxes, increased government control, government-chosen products.
B. Business-determined prices & products, decreased government controls.
C. Consumer-determined prices & products, decreased government controls.
D. Reduced taxes, no government control, and consumer-chosen products.
11. List and briefly describe the legally available business structures:
Answer:
12. What things could you change to adjust your profit?
A. Price.
B. Number.
C. Less expensive supply sources.
D. All of the above.
Answer:
13. You were hired on your new job with compensation of $50,000. Your income taxes
are in the amount of $7,000. What are your Gross and Net Incomes?
Gross Income - Answer:
Net Income - Answer:
14. Capital is:
A. Money available to invest.
B. Prohibitive cost of entry.
C. A guarantee that a company will be successful.
D. Any financial assets.
Answer:
15. Examples of Capital are:
A. A warehouse, computers, bulldozers, and company vehicles.
B. Employees, manufacturing and shipping costs, and partners.
C. Austin, TX and Washington, DC.
D. Money over $1million.
Answer:
16. Gross profit is the:
Answer:
A. Money remaining when the cost of products is subtracted from total revenue.
B. All Money collected from selling products.
C. Amount of money your product costs to produce.
D. Has nothing to do with money.
17. Net profit is the:
Answer:
A. Amount of money you get for Gross Profit minus any stolen products.
B. Money remaining when ALL expenses are subtracted from the Gross Profit.
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C. Amount of money your product costs to produce.
D. Has nothing to do with money.
18. To determine the Net Profit:
A. Calculate the total ticket sales.
B. Calculate the total ticket sales and subtract the taxes.
C. Calculate the total ticket sales and subtract all expenses.
D. Calculate the total ticket sales and add all expenses.
Answer:
19. These are vital considerations when determining the type of business to start:
A. Your interests and the market opportunities.
B. How much money you will make in the first year.
C. Startup costs, market share and overhead.
D. All of the above.
Answer:
20. List 2 Websites that can be used to learn information about, or start a business:
A.
B.
BONUS: A Product Possibilities Curve is usually found in which Graphing Quadrant? [4 points].
BONUS ANSWER:
Short Answer Essay
Please respond to the prompt below using a minimum of 5 complete sentences. YOUR
RESPONSE MUST BE WRITTEN IN 12-POINT ARIAL FONT ONLY. ANSWER ONLY
ONE QUESTION. Type the question number you have chosen in the designated blank
below. Answer your questions in the designated space on the next page. This essay will
be graded using the Fist of Five Scale. [20 points].
Prompts: Choose only one for your essay.
1. Explain the basic Economic concepts of limited resources, population and
scarcity. How do these concepts apply to the individual? How do these
concepts apply to the business? Analyze and explain their significance.
2. List two advantages and two disadvantages to having an F.E.S. Economy.
Explain how these advantages and disadvantages effect opportunity at the
Microeconomic level? Explain why these advantages and disadvantages have
this particular effect at the Microeconomic level?
3. One of the most controversial dialogs in American Economics is about
Government Regulation. The question is should there be more or less?
Explain how government regulation effects the economy and available
opportunities. What tradeoffs—if any—occur when the government plays a
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larger role in the economy? What tradeoffs—if any—occur when the
government plays a smaller role in the economy? Explain and develop your
statement.
RESPONSE:
Prompt #: .
Respond in the following gray space:
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