EOC Practice Test 3
starstarstarstarstarstarstarstarstarstar
by Stephanie Foy
| 26 Questions
1
1
Ashley would like to buy a reliable car for under $10,000. Jeremy has a reliable car that he would like to sell for $8,000 to buy a truck for his business. If Ashley buys Jeremy's car, the sale is an example of a(n)
voluntary, non-fraudulent exchange.
involuntary, fraudulent exchange.
involuntary, non-fraudulent exchange.
voluntary, fraudulent exchange.
2
1
Productivity can best be defined as
The quality of what you produce.
The limited factors of production available to a society.
The relationship of input to output.
All the possible goods that could be produced.
3
1
A consumer will make a rational decision to purchase a car when
the marginal benefit of the car exceeds the marginal cost.
the cost of the car is minimized.
the cost is greater than taking alternate transportation.
the marginal cost of the car exceeds the marginal benefit.
4
1
A country with a very high poverty rate invests in human capital, technology and healthcare. Which of the following would most likely occur?
The country's production possibilities curve would remain unchanged.
The standard of living in the country would decline.
The country's production possibilities curve would shift inward to the left.
The standard of living in the country would rise.
5
1
In a market economy, how are goods typically allocated?
based on lottery
based on the characteristics of consumers
based on price
based on government command
Dear Diary,
Dad was really upset when he came home today. The plant where he works is old and poorly maintained. He made suggestions to improve the factory, but was ignored. I heard him telling Mom that he is tired of doing work and that he hates getting paid the same as other people at the plant who often don’t show up for work, or do very little once they arrive. He says they have no incentive to work. Mom reminded him that we have a lot to be thankful for. The government provides us with an apartment, guarantees that he will get retirement benefits, and free healthcare.

6
1
Using the paragraph above, which of the following quotes from the text would support the claim that economic security was important in this society?
“The government provides us with an apartment… retirement benefits, and free healthcare.”
“He hates getting paid the same as other people at the plant who often don’t show up”
“The plant where he works is old and poorly maintained.”
“He made suggestions to improve the factory, but was ignored.”
7
1
Using the image above, a decrease in quantity demanded would be lillustrated by
movement from point x to point y
a shfit from D1 to D2
a shift from D2 to D1
movement from point y to point x
8
1
Which of the folloiwng illustrates actions that correlate with the Law of Supply?
An ice cream store offered less ice cream for sale when prices rose.
Ice cream customers purchased less ice cream when prices rose.
Ice cream customers purchased more ice cream when prices rose.
An ice cream store offered more ice cream for sale when prices rose.
9
1
Examine graphs (A) through (D) above.
Which of the graphs above represent the change that would occur due to the increase in the price of a complementary good for a product?
A
B
C
D
10
1
Examine the image above. An effective price ceiling on the market above would be at
$60 and would cause a surplus.
$20 and would cause a shortage.
$150 and would cause a surplus.
$40 and would cause a shortage.
11
1
Examine the graph above.

Which of the following conclusions can be made from the graph?
Expanded markets for computers will cause a shift from S1 to S3.
Technological advances in the computer industry will cause a shift from S1 to S3.
Entry of new firms into the computer industry will cause a shift from S1 to S2.
Higher taxes will cause a shift from S1 to S2.
12
1
In the financial industry, there are many banks that offer similar products. They often compete in terms of interest rates and perks offered to customers. Banks most likely fall under which market structure?
monopoly
monopolistic competition
pure competition
oligopoly
13
1
Which TWO scenarios are MOST negatively affected by unanticipated inflation?
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
Scenario 6
14
1
The formula C+I+G+Nx is the output expenditure model that best calculates
aggregate supply
unemployment
inflation
GDP
15
1
The total amount of goods and services produced in a country in a year can best be represented by
aggregate supply
Consumer Price Index
aggregate demand
inflation
16
1
Which of the following best completes the diagram above?
Full Employment
Economic Efficiency
Economic Equity
Profit Maximization
17
1
If a country wished to impose a trade barrier that would limit foreign competition and provide benefit to domestic consumers and producers, which trade barrier would work best?
quota
subsidy
embargo
tariff
18
1
Why do domestic producers of a good benefit from trade barriers like embargos or quotas?
Foreign companies are subjected to taxes.
They decrease the desire for other countries goods.
Domestic producers obtain funding from the government.
The quantity of imported goods is reduced.
19
1
John wishes to determine how many Euros he can purchase with one US dollar. Josh is trying to determine the
exchange rate.
interest rate.
balance of trade.
trade deficit.
20
1
Which group is MOST LIKELY to benefit if the US Dollar appreciates against the Yen?
United States investors buying Japanese stock.
Tourists traveling from Japan to the United States.
United States banks holding Japanese currency.
Japanese businesses with contracts to buy US goods.
21
1
Use the table above to answer the question.

Based on the table, which development MOST LIKELY occurred between 2000 and 2003?
European consumers who used the euro purchased U.S. exports at increasingly lower prices.
The United States increased tariffs on European nations that used the euro in international trade
The United States increased its money supply to encourage the export of goods to nations that used the European euro.
U.S. exporters found it increasingly difficult to find markets in nations that used the European euro
22
1
To maximize profits, a bank would charge
a higher rate of interest on loans and pay a lower rate of interest on deposits
a rate of interest that is the same for deposits and loans
a higher rate of interest for large corporations than for small businesses
a lower rate of interest on loans and pay a higher rate of interest on deposits
23
1
In saving and investing, as the risk of financial loss increases, investors must receive
higher potential returns.
lower returns.
higher guaranteed returns.
insurance from the federal government.
24
1
Kayla has not built an emergency savings account and has found herself needing $500 today. Which financial institution could she use, and what risks are associated with it?
A pay day lender, but she will pay extremely high interest rates.
A mutual fund, because her options would be diversified.
A credit union, but they might only loan less than $500.
A bank, but she will earn very low interest rates.
25
1
Which of the following statements suggests that property taxes might be progressive?
Higher-income people typically live in more expensive houses than do low-income people.
The proportion of income spent on housing tends to decline as income rises.
Inner city neighbourhoods often have higher property taxes than do the more affluent
suburbs
A large part of the property tax is shifted to renters, who typically have lower incomes than
owners.
26
1
Credit Card 1: 24.99% APR
Credit Card 2: 14.99% APR
Bank Loan 1: 7.99% APR
Bank Loan 2: 6.99% APR

If the list above represents Katie's choices for paying for college, which option would be the least costly for her?
Bank Loan 2
Credit Card 2
Credit Card 1
Bank Loan 1
Add to my formatives list

Formative uses cookies to allow us to better understand how the site is used. By continuing to use this site, you consent to the Terms of Service and Privacy Policy.