Name: Period

1. 
   Among the broad purposes of the United States government spelled out in the
   

1. 
   Keep everybody equal
   
2. 
   Unite the States and People and promote peace at home
   
3. 
   Defend the citizens against other nation intending to inflict harm.
   
4. 
   Provide for justice and the people’s general welfare.
   

2. 
   The Preamble of the Constitution of the United States introduces a form of government that balances authority with
   

1. 
   Liberty
   
2. 
   Protection
   
3. 
   Equality
   
4. 
   Order
   

3. 
   According to the Preamble of the Constitution of the United States the government’s power comes from the
   

1. 
   National Government
   
2. 
   The founding fathers
   
3. 
   The states
   
4. 
   The people
   

4. 
   In the Declaration of Independence, Thomas Jefferson writes about all of the following ideas EXCEPT:
   

1. 
   All people have the natural rights of Life, Liberty, and the Pursuit of Happiness
   
2. 
   That the Government must follow the Social Contract
   
3. 
   Governing power comes from God.
   
4. 
   All people are created equal
   

5. 
   Locke would most likely agree that
   

1. 
   the state developed out of force
   
2. 
   those of royal birth should rule the state
   
3. 
   the state exists to serve the will of the people
   
4. 
   government should be eliminated
   

6. 
   Of the thinkers listed below who would must likely agree with the following statement:
   

1. 
   John Locke
   
2. 
   Thomas Hobbes
   
3. 
   Adam Smith
   
4. 
   Karl Marx
   

7. 
   Jean-Jacques Rousseau would most likely agree that
   

1. 
   That human instinct was more important than justice
   
2. 
   The Social Contract led to social cooperation that restricted man’s freedom
   
3. 
   The Social Contract led to social cooperation that improved man
   
4. 
   The government does not have the right to restrict man’s self interest.
   

8. 
   Adam Smith would must likely agree that
   

1. 
   The government understands people’s needs better than the people.
   
2. 
   When people all pursue their self interest, bad things can happen.
   
3. 
   Regulations that promote equality are essential for progress.
   
4. 
   Self interest drives the economy.
   

9. 
   According to the Social Contract theory, supreme authority belongs to the
   

1. 
   state government
   
2. 
   people
   
3. 
   federal government
   
4. 
   rulers
   

10. 
    According to the Divine Right Theory, the power to govern comes from what source?
    

1. 
   The people
   
2. 
   The strength
   
3. 
   God
   
4. 
   Inherited
   

11. 
    This English Philosophy argued that people had natural rights; Life, Liberty, and Property.
    

1. 
   Thomas Hobbes
   
2. 
   Adam Smith
   
3. 
   John Locke
   
4. 
   Jean-Jacques Rousseau
   

12. 
    The Stag hunt game created by Jean-Jacques Rousseau illustrates the need for
    

1. 
   Creative Destruction
   
2. 
   Social Cooperation
   
3. 
   Competition
   
4. 
   Regulations
   

13. 
    Two parties are said to be in a “Prisoner’s Dilemma,” when
    

1. 
   Everybody seeks their own self interest and everybody’s condition is improved.
   
2. 
   Everybody cooperates and everybody’s condition is improved.
   
3. 
   Everybody seeks their own self interest and everybody’s condition is worsened.
   
4. 
   Everybody cooperate and everybody’s condition is worsened.
   

14. 
    What is the primary purpose of all economic systems?
    

1. 
   To allocate scarce resources that have alternative uses to their most useful purpose.
   
2. 
   To ensure that everybody’s wants and needs are satisfied.
   
3. 
   To promote equality and fairness to all members of society
   
4. 
   To create a natural balance between supply and demand
   

15. 
    A measure of someone’s satisfaction is called. . .
    

1. 
   Cost
   
2. 
   Price
   
3. 
   Justice
   
4. 
   Utility
   

16. 
    On Tuesday night, Mike wanted to watch both the hockey game and American Idol. He could not tape one while watching the other, he needed to make a decision. Mike decided to watch American Idol and as a result he missed the first half of the game. Economically speaking what does the first half of the hockey game represent to Mike?
    

1. 
   External cost
   
2. 
   Cost
   
3. 
   Opportunity Cost
   
4. 
   Creative Destruction
   

17. 
    On Thursday morning, Mr. Felton’s class was interrupted by the sound of someone using hedge clippers right outside the window. The Principal asked the custodian to trim the hedges and both benefited from the transaction. Economically speaking what did the disruption represent to the class?
    

1. 
   External Cost
   
2. 
   Cost
   
3. 
   Opportunity Cost
   
4. 
   Creative Destruction
   

18. 
    According to Adam Smith,
    

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner,”

1. 
   The government
   
2. 
   Cooperation
   
3. 
   Their own self interest
   
4. 
   Your self interest
   

19. 
    According to capitalism, what is the most efficient way to allocate scarce resources?
    

1. 
   The government
   
2. 
   Price
   
3. 
   Laws and regulation
   
4. 
   Price controls
   

20. 
    For the standpoint of society as a whole, what is the true cost of anything?
    

1. 
   Cannot tell from the information provided in the question
   
2. 
   The price determined by supply and demand
   
3. 
   The value that the object has in alternative uses
   
4. 
   The price determine by the government
   

21. 
    The idea that there has never been enough to satisfy everyone completely is referring to which economic term?
    

1. 
   Trade offs
   
2. 
   Opportunity Cost
   
3. 
   Shortages
   
4. 
   Scarcity
   

22. 
    In a capitalist economy the factors of production (land, capital, resources) are owned by
    

1. 
   Individuals (the people)
   
2. 
   the government
   
3. 
   C. unions
   
4. 
   the banks
   

23. 
    The American Economy can best be described as a
    

1. 
   Mixed Economy
   
2. 
   Command Economy
   
3. 
   Free Market Economy
   
4. 
   Socialist Economy
   

1. 
   Maintaining a Legal and Social Framework
   
2. 
   Providing public goods and services
   
3. 
   Maintaining competition
   
4. 
   Redistributing income
   
5. 
   Correcting for externalities
   
6. 
   Stabilizing the Economy
   

24. 
    Why does the EPA have “pesky regulations and taxes” on companies that pollute?__________
    

25. 
    “Interest rates stay steady as unemployment rises.” _______
    

26. 
    Federal appeals court rejects Virginia's challenge to Obama's health care law. _______
    

27. 
    In 1984, the U.S. Justice Department broke the American Bell Telephone Company into three separate companies. _________
    

28. 
    The United States has a progressive tax rate, meaning as a person’s income increases the percent that they are taxed also increases. _______
    

29. 
    We have lemon laws to protect consumers from being taken advantage of when buying a vechicle. _______
    

30. 
    Why can’t opportunity cost and trade offs exist without scarcity?
    

31. 
    According to the author of the reading, Benevolent Authority, why does Plato’s idea of a Benevolent Authority contradict the ideas of Prisoner’s Dilemma?
    

32. 
    Adam Smith coined the phrase the “invisible hand” to Smith what is the invisible hand?
    

33. 
    According to economist Joseph A. Schumpeter, why is Creative Destruction imperative for progress in a capitalistic society?
    

34. 
    Chart the data points and determine whether or not the opportunity cost is constant or increasing.