1. In the late 1700s the British 1. In the late 1700s the British government used the colony of government used the colony of Australia as: Australia as:

A. a location in which to build new A. a location in which to build new factories. factories. B. a prison to which criminals could B. a prison to which criminals could

be sent. be sent. C. a military base to replace the C. a military base to replace the African colonies. African colonies. D. a source of resources like coal D. a source of resources like coal and iron. and iron.

2. A market economy is very different 2. A market economy is very different from a command economy. Which of from a command economy. Which of the following is found in a market the following is found in a market economy? economy?

A. competition A. competition

B. guaranteed yearly pay raises B. guaranteed yearly pay raises

C. government control of industry C. government control of industry

D. government control of agriculture D. government control of agriculture

3. Which of following 3. Which of following best best describes a describes a market economy? market economy?

A. A person can start any legal business A. A person can start any legal business and charge any price.and charge any price.

B. The government provides food and B. The government provides food and housing to all workers. housing to all workers.

C. The government provides services, C. The government provides services, such as such as telephones and television. telephones and television.

D. National businesses, such as airlines, D. National businesses, such as airlines, are owned by the government. are owned by the government.

4. Use the information in the box below to 4. Use the information in the box below to answer this question. answer this question. In order to produce a good or a service, four In order to produce a good or a service, four factors of production are needed—natural factors of production are needed—natural resources (land), human resources (labor), resources (land), human resources (labor), capital resources (buildings and machinery), capital resources (buildings and machinery), and entrepreneurship (organization). and entrepreneurship (organization). A sixth-grade class decides to open a A sixth-grade class decides to open a popcorn stand. The stand and the popcorn popcorn stand. The stand and the popcorn popper are examples of which factor of popper are examples of which factor of production? production?

A. natural resources A. natural resources B. human resources B. human resources C. capital resources C. capital resources D. entrepreneurship D. entrepreneurship

5. In which economic system are 5. In which economic system are the production and distribution of the production and distribution of goods owned by private individuals goods owned by private individuals or corporations? or corporations?

A. traditional A. traditional B. feudalism B. feudalism C. market C. market D. commandD. command

6. Which term best describes an 6. Which term best describes an economic system in which the peopleeconomic system in which the people—not the government—own land, —not the government—own land, factories, and businesses? factories, and businesses?

A. communism A. communism

B. market B. market

C. command C. command

D. traditional D. traditional

7. Which word has the same meaning 7. Which word has the same meaning as the economic term "tariff"?as the economic term "tariff"?

A. tax A. tax B. savings B. savings C. debt C. debt D. money D. money

8. You need to purchase a pair of 8. You need to purchase a pair of sneakers since they are required for sneakers since they are required for physical education class. Which is an physical education class. Which is an example of effective decision making?example of effective decision making?A. You buy the first pair of sneakers A. You buy the first pair of sneakers you try on at the first store you visit. you try on at the first store you visit. B. You use your money to buy a pair B. You use your money to buy a pair of jeans instead of a pair of sneakers. of jeans instead of a pair of sneakers. C. You buy a pair of sneakers after C. You buy a pair of sneakers after considering fit, appearance, and cost. considering fit, appearance, and cost. D. You buy the most stylish and D. You buy the most stylish and expensive pair of sneakers you find. expensive pair of sneakers you find.

9. A country's parliament votes to 9. A country's parliament votes to increase tariffs upon goods from increase tariffs upon goods from another country. This is an example another country. This is an example of:of:

A. a monarchy encouraging free A. a monarchy encouraging free trade. trade. B. a representative democracy B. a representative democracy restricting trade. restricting trade. C. a socialist congress preventing C. a socialist congress preventing free enterprise. free enterprise. D. a communist government allowing D. a communist government allowing freedom of speech. freedom of speech.

10. In a traditional economic system people 10. In a traditional economic system people usually exchange goods or services rather usually exchange goods or services rather than use money. Which of the following is than use money. Which of the following is an example of this exchange process? an example of this exchange process?

A. charging goods on a credit card A. charging goods on a credit card

B. bartering with a seller B. bartering with a seller

C. paying for services by check C. paying for services by check

D. using currency to pay D. using currency to pay

11. Why do items for sale have prices 11. Why do items for sale have prices such as $2.99, $5.99, and $9.99 such as $2.99, $5.99, and $9.99 instead of $3.00, $6.00, and $10.00?instead of $3.00, $6.00, and $10.00?

A. The stores are trying to help their A. The stores are trying to help their customers save money. customers save money. B. Such prices make the items seem B. Such prices make the items seem less expensive than they are. less expensive than they are. C. Computers set the prices, and C. Computers set the prices, and these just happened to turn out this these just happened to turn out this way. way. D. Such prices are used to cut down D. Such prices are used to cut down on the amount paid for taxes. on the amount paid for taxes.

12. What is the purpose of a tariff, such as a 12. What is the purpose of a tariff, such as a protective tariff?protective tariff?

A. to increase the prices of imported goods A. to increase the prices of imported goods and protect a country's own industries from and protect a country's own industries from foreign competition foreign competition B. to decrease the prices of imported goods B. to decrease the prices of imported goods so a country's people can buy what they so a country's people can buy what they need for the lowest cost need for the lowest cost C. to increase the prices of exported goods C. to increase the prices of exported goods so a country's own businesses are less likely so a country's own businesses are less likely to send their products to other nations to send their products to other nations D. to decrease the prices of exported goods D. to decrease the prices of exported goods so people in other countries will buy the so people in other countries will buy the foreign nation's product over one from home foreign nation's product over one from home

13. The economic system of 13. The economic system of communist countries is most closely communist countries is most closely related to which of the following? related to which of the following?

A. command A. command B. market B. market C. traditional C. traditional D. supply and demand D. supply and demand

14. Which economic term best 14. Which economic term best describes using money to earn describes using money to earn more money?more money?

A. selling A. selling B. borrowing B. borrowing C. trading C. trading D. investingD. investing

15. The North American Free Trade 15. The North American Free Trade Agreement (NAFTA) was designed to Agreement (NAFTA) was designed to promote free trade between the promote free trade between the United States,United States,

A. Canada, and Mexico. A. Canada, and Mexico. B. the United Kingdom, and Russia. B. the United Kingdom, and Russia. C. Canada, and the United Kingdom. C. Canada, and the United Kingdom. D. Mexico, and the islands of the D. Mexico, and the islands of the Caribbean. Caribbean.

16. Canada and Mexico are SIMILAR in 16. Canada and Mexico are SIMILAR in that lowering trade barriers between that lowering trade barriers between these two nations has resulted in these two nations has resulted in both nations experiencingboth nations experiencing

A. growth in their economies. A. growth in their economies. B. increases in unemployment. B. increases in unemployment. C. increases in the prices of C. increases in the prices of consumer goods. consumer goods. D. decreases in the quality of D. decreases in the quality of consumer goods. consumer goods.

17. When a country has a market economy, 17. When a country has a market economy, which of these statements correctly which of these statements correctly defines this system? defines this system?

A. Workers are guaranteed a pay raise A. Workers are guaranteed a pay raise every year. every year. B. The government controls most of the B. The government controls most of the businesses in the country. businesses in the country. C. Basic goods in the country are provided C. Basic goods in the country are provided to all people without charge. to all people without charge. D. Companies produce goods of their D. Companies produce goods of their choice and consumers decide whether to choice and consumers decide whether to buy the goods. buy the goods.

18. What is the purpose of free trade 18. What is the purpose of free trade partnerships like the North American partnerships like the North American Free Trade Agreement (NAFTA) Free Trade Agreement (NAFTA) between the United States, Canada, between the United States, Canada, and Mexico? and Mexico? A. to increase trade by doing away A. to increase trade by doing away with tariffs. with tariffs. B. to allow countries to get needed B. to allow countries to get needed goods without having to pay for them goods without having to pay for them C. to keep the countries from trading C. to keep the countries from trading with Europe or Asia with Europe or Asia D. to help the countries produce D. to help the countries produce everything they need for themselves everything they need for themselves