Virtual SC economics CP final exam Questions Answered And Graded 2026/27

The study of economics involves ________________ a) explaining how people deal with scarcity b) studying how things are made, bought, sold, and used c) explaining how incomes are earned and how jobs are created d) all of these - CORRECT ANSWER Correct Answer: D When a nation's total output increases over time, the nation is experiencing _____________ a) a decrease in gross domestic product b) economic growth c) economic interdependence d) an expansion of the possibilities curve - CORRECT ANSWER Correct Answer: B Which of the following descriptions best explains the meaning of opportunity cost? a) the initial cost of starting a new business b) the cost of business failure c) the cost of choosing one alternative over another d) the risk associated with producing a new item - CORRECT ANSWER Correct Answer: C A nation's wealth is determined by its ______________ a) accumulation of all tangible and intangible resources b) natural resources c) accumulation of all tangible products d) product possibilities frontier - CORRECT ANSWER Correct Answer: C Consumers waiting in long lines for a new product is an example of ___________ a) consumerism b) consumer rights c) consumer responsibilites d) scarcity - CORRECT ANSWER Correct Answer: D Paradox of value refers to the ___________ a) a high value of an essential item and the low value of a nonessential item b) high value of a nonessential item and the low value of an essential item c) contradiction of what consumers want and what they need d) contradiction between gross domestic product and market value - CORRECT ANSWER Correct Answer: B The efficient use of scarce resources leads to an increase in ____________ a) productivity b) investment c) scarcity d) capital - CORRECT ANSWER Correct Answer: A The most comprehensive measure of a nation's wealth is provided by its ______________ a) gross domestic product b) TINSTAAFL rating c) product possibilities curve d) capital goods - CORRECT ANSWER Correct Answer: A When a business needs to decide whether a certain action is worth the cost, the most helpful analysis would be a(n) ___________ a) production possibility comparison b) cost-benefit analysis c) economic model d) needs assessment - CORRECT ANSWER Correct Answer: B Which of the following statements best describes the purpose of the production possibilities curve? a) it predicts the future production of a nation b) it identifies trends in production c) it shows which products are most profitable d) it identifies all possible combinations of goods and services an economy can product - CORRECT ANSWER Correct Answer: D The market structure called perfect competition is best described as ____________ a) theoretical and a goal b) commonplace and normal c) small and uncommon d) natural and abundant - CORRECT ANSWER Correct Answer: A What is the main cause of a change in quantity demanded? a) substitution b) changes in revenue c) change in price d) the income effect - CORRECT ANSWER Correct Answer: C What is the major difference between perfect competition and monopolistic competition? a) price b) competition c) product differentiation d) number of firms - CORRECT ANSWER Correct Answer: C What is the relationship between income and demand? a) a decrease in income increases demand b) a decrease in price decreases income c) an increase in price increases income d) an increase in income increases demand - CORRECT ANSWER Correct Answer: D When the price of something increases, the quantity demanded ___________ a) increases b) decreases c) remains unchanged d) reverses - CORRECT ANSWER Correct Answer: B Which is an example of a public good? a) a rock band b) a car c) the army d) bread - CORRECT ANSWER Correct Answer: C Which market structure is defined by a single producer? a) pure competition b) monopolistic competition c) oligopoly d) monopoly - CORRECT ANSWER Correct Answer: D Which of the following do economists use to classify markets? a) number of firms b) size of firms c) type of product d) all of the above - CORRECT ANSWER Correct Answer: D Which of the following replaces a costly item with a less costly one? a) the substitution effect b) the income effect c) change in demand d) consumer taste - CORRECT ANSWER Correct Answer: A Which of these best describes the influence of high prices on the behavior of producers? a) they are an incentive for producers to produce more b) they are an incentive for producers to buy less c) they encourage producer to modify their supply schedules d) they have no significant overall effect on producer behavior - CORRECT ANSWER Correct Answer: A Why is the Law of Demand called "law"? a) because it is legally required b) because there are no exceptions to it c) because it has been demonstrated repeatedly d) because it is an economic term - CORRECT ANSWER Correct Answer: C According to Keynesian economics, which sector of the economy could offset a decline in business spending? a) consumer b) business c