1) A consumer most often pays a deductible

(A) when sharing the cost of a payout. (B)before making aninsurance claim. (C) when signing up for an insurance plan. (D)after a company has paid a claim.

2) When entrepreneurs develop new products, other companies alsoexperience growth because they.

(A) immediately copy the successful product. (B) create manycompanion products.

(C) try to develop their own products. (D) attempt to improvethe product.

3) Sean’s mother had to make an emergency purchase of a new tirebecause her tire went flat while she was traveling to the store.She is not sure how much money she has in her checking account.Which method of payment should she use to be financiallyresponsible?

(A) She should pay by telephone with her debit card. (B) Sheshould pay with a debit card. (C) She should pay with a creditcard. (D) She should pay with a check.

4) Which best describes why a company issues stocks?

(A) to increase the company’s value (B) to ensure profits (C) toincrease dividends (D) to raise capital

5) What is the best definition of profit?

(A) Profit is the possible income from producing an additionalitem. (B) Profit is the price of producing one additional unit of agood. (C) Profit is the additional income gained from selling anadditional good. (D) Profit is the financial gain from businessactivity minus expenses.

6) In a mixed market economy, what is a typical way thegovernment can reduce unemployment?

(A) The government can pay for projects to create work. (B) Thegovernment can control new factories to provide jobs. (C) Thegovernment can create new farm fields to hire workers.

(D) The government can raise taxes to encourage employment.

7) What is one main objective in the study of economics?

A) recognizing the types of services available to everyone B)recognizing the relationship between producers and consumers C)recognizing the reasons that saving money is beneficial

D) recognizing the difference between producers andconsumers

8) The factors of production include the number of

A) customers needed to make a profit on a good. B) consumers whoshow an interest in a good. C) employees needed to manufacture agood.

D) producers who supply the same good.

9) Emma is trying to decide whether to buy a new laptop. As astudent, she has a budget and wants to make sure this is the rightfinancial decision. Which question should she ask herself indetermining the opportunity cost of this purchase?

A) What will I have to sacrifice if I buy this laptop? B) Can Iuse credit to buy this laptop? C) Do I need this laptop for mystudies? D) Is there a less costly alternative to buying thislaptop?

10) Which is a desirable characteristic when choosing a line ofcredit?

A) rewards program B) annual fee C) amount of down payment D)amount of collateral

11) What is an advantage of an adjustable-rate mortgage?

A) A borrower always knows how much to pay the bank each month.B) A borrower can purchase a home with little financial risk.

C) A drop in interest rates may result in lower monthlypayments. D) A rise in interest rates may result in lower monthlypayments.