You are on page 1of 5

Name

Period

Room 3129 Ms. Jackson

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:
Answer:
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.
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.
Answer:
A. Plentiful Resources
B. Scarcity
C. Limited Resources
D. Exponentially Growing Population
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?

P a g e | 1 of 4

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 :
Answer:
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.
9. A market survey is important because it tells you:
Answer:
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.
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?
Answer:
A. Price.
B. Number.
C. Less expensive supply sources.
D. All of the above.
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:
P a g e | 2 of 4

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:


Answer:
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.
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.
C. Amount of money your product costs to produce.
D. Has nothing to do with money.
18. To determine the Net Profit:
Answer:
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.
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:

P a g e | 3 of 4

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 tradeoffsif anyoccur when the
government plays a larger role in the economy? What tradeoffsif
P a g e | 4 of 4

anyoccur when the government plays a smaller role in the


economy? Explain and develop your statement.

RESPONSE:
Prompt #: .
Respond in the following gray space:

P a g e | 5 of 4

You might also like