1. You purchase a drink from your local convenience store, the price is excellent, and you really enjoy the drink. The convenience store receives a sale and hopes that they have a regular customer.

Which of the six core principles of the economic way of thinking does this illustrate?

A.People Make Choices B.People Gain When There is Voluntary Trade C.All Choices Involve Costs D.The Consequences of Choices Lie in the Future

2. Which of the following would cause the change in supply illustrated in the graph below?

A.Business taxes increase.

B.The number of sellers increases. C.Producers expect growing economic activity. D.Input prices (costs of production) decrease.

3. The three fundamental economic questions every society must answer are:

A. What to produce? When to produce? Why to produce? B. Why to produce? What to produce? Who gets it? C. What to produce? How to produce it? Who gets it? D. What day to produce? What time to produce? How much to produce?

4. You decide to do a cost-benefit analysis for an important decision. What is the first step you should follow when conducting the basic cost-benefit analysis?

A. Collect as much information as you can on all possible options.

B. Write down a list of costs and a list of benefits.

C. Assign a monetary value to each of the benefits and costs.

D. Determine if the costs add up to more than the benefits and by how much.

5. Consider the graph below. When government sets a minimum price above the current equilibrium price, __________ and __________ will increase, and __________ will decrease.

\fPrice per 3; Apple $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50 $1.25 $1.00 $0.25 $0.50 $0.25 Demand 2 0123456789101112 Quantity of Granny Smith Apples per Week