Economics Module 3 Practice Exam Essay

question

What do J. C. Penney and Madame C. J. Walker have in common? A. They launched major department stores. B. They were African American entrepreneurs. C. They were early entrepreneurs in their industries. D. They were women entrepreneurs.
answer

C. They were early entrepreneurs in their industries
question

Which of the following are shared by a typical corporation and a limited liability corporation? A. Easy to start and stop and have shared debt liability B. Are incorporated and have limited liability C. Have shareholders and are easy to start and stop D. Protect personal assets and can sell stock to the public
answer

B. Are incorporated and have limited liability
question

A benefit of a purely competitive market is A. Equal product information for buyers and sellers B. Government sets the product prices to be competitive C. Sellers may set their own prices D. Sellers use advertising to attract buyers
answer

A. Equal product information for buyers and sellers
question

“Show your sweetheart how much you love her on Valentine’s Day. We’re having a sale on all chocolate!” This advertisement targets your A. Fears B. Senses C. Emotions D. sSocial values
answer

C. Emotions
question

The slope of curve 1 first decreases then increases because of the Law of A. Marginal Analysis B. The Slope of Supply C. The Slope of Demand D. Diminishing Marginal Returns
answer

D. Diminishing Marginal Returns
question

This is Pete’s PPC curve for staying in touch with friends via phone vs. his weblog during one week. Which of the following is a true statement? A. Pete uses weblog entries more than phone calls. B. Pete calls friends more often than he writes weblog entries. C. When Pete makes six phone calls he has time for four weblog entries. D. When Pete writes one weblog entry he has time for six phone calls.
answer

D. When Pete writes one weblog entry he has time for six phone calls
question

A country needs to decide if it will defend itself (“guns”) or feed its population (“butter”). Look at the graph. Construct a plan to help the country attain Point X. A. Add more gun makers to the labor force and decrease the number of butter makers B. Streamline production of butter and begin assembly-line manufacturing of guns C. Decrease the quality of guns and increase the demand for butter D. Increase the quality of the butter and create more demand for guns
answer

B. Streamline production of butter and begin assembly-line manufacturing of guns
question

Use this image to answer the following question. The ice cream shop needs five pounds of strawberries for every gallon of strawberry ice cream. The shop chose to produce four gallons of chocolate ice cream. How many pounds of strawberries should the shop purchase? A. 24 B. 30 C. 40 D. 60
answer

D. 60
question

Which of the following is the least profitable investment for a cell phone company earning $10 per plan contract? A. Offering free $10 gift for every new plan, generating 40 new plans per day B. Opening a new store location with $200 daily operating cost, generating 30 new plans per day C. Redesigning website at $50 daily operating cost, generating 10 new plans per day D. Creating television commercial at $25 daily operating cost, generating 15 new plans per day
answer

A. Offering free $10 gift for every new plan, generating 40 new plans per day
question

Which of the following is an example of capital in a pizza shop? A. Dough B. Pizza Oven C. Workers D. Tomatoes
answer

B. Pizza Oven
question

Your friends opened a restaurant. A necessary labor resource would be? A. Servers B. Building C. Oven D. Tables and chairs
answer

A. Servers
question

You would like to direct all activities in a business that you start. What would be the best option for you? A. Partnership B. Limited Liability Company C. Sole Proprietorship D. Corporation
answer

C. Sole Proprietorship
question

Differentiate between land resources and labor resources that a business would need. A. Land resources include items that have to come from land such as oil, gold, water, and paper, but labor resources include human beings in their specific employee role. B. Land resources will include items that can be used on land such as trucks, trains, and tractors, but labor resources will include the actual working on the land. C. Land resources will include all items that will take up land space such as buildings, parking lots, and barns yet labor resources will include the actual working on the land. D. Land resources will include items that can be made from land or are taking up land such as trees, buildings, and stores, but labor resources include human beings in their specific employee role.
answer

A. Land resources include items that have to come from land such as oil, gold, water, and paper, but labor resources include human beings in their specific employee role.
question

A business owner has several competitors in his area. She is not willing to change the price on her product. She plans to strengthen her competition with them via other routes. Predict one way in which she will do this: A. She will lower her price. B. She will raise her price. C. She will close her store. D. She will purchase additional advertising
answer

D. She will purchase additional advertising
question

Tom has been renting a booth at the Flea market for 10 years. They are raising the rental fee to $10 per hour. He sells pirate coconuts for $5 each. How many pirate coconuts does he need to sell in one hour to earn a profit? A. 2 B. 3 C. 4 D. 5
answer

B. 3
question

You are starting a Tree trimming business. Which of the following would be a needed land resource? A. Oil B. Chainsaw C. Ladder D. Trees
answer

A. Oil
question

Why does pure competition benefit consumers over producer? A. Companies control price through demand. B. Competition is driven by price. C. Supply influences production more when competition is less. D. With a small amount of producers they have control of the prices
answer

B. Competition is driven by price
question

FLVS classes to answer the following question. Andy needs about 4 hours per week for each FLVS class. If he decides to do to 8 hours of gamming each week, how many hours will he spend on his classes if working efficiently? A. 6 B.16 C. 4 D. 20
answer

B. 16
question

You and your best friend open a dog walking business together. Identify how your business will be classified and the capital you would need for your business A. Sole proprietor and dogs B. Sole proprietor and water C. Partnership and employees D. Partnership and a dog leash
answer

D. Partnership and a dog leash
question

Your dog walking business has become a great success. You and your best friend want to maintain control of the business, but protect your personal assets/property. Which of the following would best suit your growth A. Limited Liability Company B. Monopoly C. Corporation D. Sole Proprietor
answer

A. Limited Liability Company
question

You and your best friend decide to hire someone to help with the dog walking business. You pay your new employee $8 an hour and you currently charge $10 for 1 walk a day. Which of the following would be the most profitable for your business? A. New employee will work for 2 hours a day and walk 2 dogs B. New employee will work for 3 hours a day and walk 4 dogs C. New employee will work for 5 hours a day and walk 6 dogs D. New employee will work for 7 hours a day and walk 7 dogs
answer

C. New employee will work for 5 hours a day and walk 6 dogs
question

Gene decides to open a restaurant, and has plenty of money to put into his venture but has never actually worked in a restaurant in any capacity. Which would be the most ideal way to organize his business based on this information? A. Corporation or sole proprietorship B. Partnership or limited liability company C. Limited liability or corporation D. Sole proprietorship or partnership
answer

B. Partnership or limited liability company
question

Use the production possibilities diagram of days spent doing homework and days spent playing video games to answer the following question. Tina has 3 hours of spare time each day. How many hours will Tina have for her homework if she spends 6 days playing video games? A. 1 B. 3 C. 4 D. 10
answer

B. 3
question

If Bob wants to open a Burger restaurant, which of the following would be necessary capital resources? A. Restaurant manager, cash register, water B. Servers, advertisements, plates C. A location for the shop, burgers, plates D. Silverware, cooks, coupons in a local flyer
answer

C. A location for the shop, burgers, plates
question

Kalli’s new jewelry store has really started to increase in sales giving Kalli enough money that she can now start looking at expanding her business to further her success . Keeping in mind that Kalli is using the business structure of a sole proprietorship, which answer below would be the best one for her to consider? A. Offering stock options to potential investors B. Hiring additional staff C. Expanding her products to include more sizes and designs D. Moving the business to a larger location
answer

C. Expanding her products to include more sizes and designs
question

Lucas has been seeing a steady increase in sales with his coffee shop. He is considering some different types of capital investments that should continue to increase his profit line and hopefully allow him to open another store. Which investment would be the most beneficial to Lucas’ long term business plan? A. Hiring more employees B. Adding additional coffee machines C. Allowing stock options D. Increasing his advertising
answer

B. Adding additional coffee machines
question

Shirley Marks, a new clothing store in the mall, has just been opened. With new clothing designs, cheaper prices, and constant sales this new store is a hit! It’s also a major competitor with the other stores in the mall. In evaluating the competition, which category does Shirley Marks fit into? A. Monopoly B. Pure Competition C. Monopolistically Competitive D. Oligopoly
answer

C. Monopolistically Competitive
question

If you were to start your own restaurant, which of the following would be an example of capital? A. The workers hired to cook and serve B. The risk taken to open a business C. The stoves, ovens, tables, and chairs D. The food needed to cook and serve to paying customers
answer

C. The stoves, ovens, tables, and chairs
question

David is looking to open his own business. He has a significant amount of start-up cash but doesn’t want to put his personal assets that he has worked so hard to acquire, at risk if the business was to fail. What would be the best way to structure his business and why? A. A sole-proprietorship because it is the easiest and most widely used business structure B. An LLC because it will differentiate between personal and business assets C. A corporation because it will allow him to raise capital and only put the money he has invested into the business at risk D. A partnership because it will split the risk between him and another person
answer

B. An LLC because it will differentiate between personal and business assets
question

Florida Power and Lights is the only electrical provider in a particular area giving it a theoretical advantage of being able to set prices as it wants without having to worry about competition. This is an example of which type of industry structure? A. Monopoly B. Oligopoly C. Monopolistic competition D. Pure competition
answer

A. Monopoly
question

Which of the companies below would be an example of a natural monopoly? A. Hillsborough County Utilities (provides water/sewage) B. Wal-Mart C. Innerlight Surf Shop (only surf shop on the beach) D. Comcast (provides cable, internet, phone services
answer

A. Hillsborough County Utilities (provides water/sewage)
question

Starbucks Coffee has been in Panama City for 10 years. Caribou Coffee now opens it first shop in Panama City and offers similar products at similar prices but also includes free Wi-Fi and an internet station for patrons without laptops. How would you characterize this scenario? A. Price competition in a purely competitive market B. Price competition in a monopolistically competitive market C. Non-price competition in a purely competitive market D. Non-price competition is a monopolistically competitive market
answer

D. Non-price competition is a monopolistically competitive market
question

Use the chart below, determine which of the following statements are true: A. City utility workers and accountants require the most education/training B. Accountants and teachers have the least amount of training C. Accountants are in high D. Fast-food cashiers are in high demand
answer

C. Accountants are in high
question

(Use the marginal cost analysis graph) What point on the graph represents a situation where David is just starting out in his new business and is burdened by high initial start-up costs with very little profit in return? A. Point 1 B. Point 2 C. Point 3 D. Point 4
answer

A. Point 1
question

(Use the marginal cost analysis graph) What point on the graph represents a situation where David has been operating his business for a few years and has become extremely efficient and is now maximizing his profits? A. Point 1 B. Point 2 C. Point 3 D. Point 4
answer

C. Point 3
question

David finds that he has 3 employees that have been stealing food from his restaurant. He fires these 3 employees and hires two new employees with very good resumes and proven work experience. This is an example of what? A. Entrepreneurship B. Labor C. Capital D. Land
answer

A. Entrepreneurship
question

David and his one employee can normally produce around 50 hamburgers an hour. He decides to hire one additional worker to help increase production. Which day probably represents that start date of the new untrained employee? A. Day 1 B. Day 3 C. Day 5 D. Day 7
answer

B. Day 3

Get instant access to
all materials

Become a Member