Grade 7 Social Studies Practice Test: Economics Basics: Scarcity, Choices and Markets
- Economics Basics
- 10 questions
- 13 minutes
This test covers the basic ideas economists use to explain how people, businesses and countries make choices. Tip: opportunity cost is always the best thing you gave up, not the money you spent.
Tap an option to mark your answer. You can change your mind, or tap the same option again to leave the question blank. The correct answers and explanations appear when you finish the test.Tap an option to answer; tap it again to leave the question blank.
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Question 1
In economics, scarcity means that
Correct answer: B
Resources such as time, money and materials are limited, but wants are not. Scarcity forces people to make choices.
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Question 2
Maya has $40. She can buy a video game or a concert ticket, and she chooses the ticket. What is her opportunity cost?
Correct answer: D
Opportunity cost is the value of the next best choice you give up. Maya gave up the video game.
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Question 3
A new sneaker becomes very popular, so demand rises, but the supply stays the same. What usually happens to the price?
Correct answer: A
When more buyers compete for the same number of items, sellers can charge more. A fall in price would come with lower demand or higher supply.
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Question 4
A tractor used on a farm is an example of which factor of production?
Correct answer: C
Capital means tools, machines and buildings used to make other goods. Land means natural resources, and labor means human work.
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Question 5
Sam deposits $200 in a savings account that pays 3% simple interest per year. How much interest does he earn in one year?
Correct answer: D
3% of $200 is 0.03 × 200 = $6. $206 is the total in the account after one year, not the interest.
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Question 6
In a market economy, what to produce is decided mainly by
Correct answer: B
In a market economy, buyers and sellers make most choices. A central plan describes a command economy, and customs describe a traditional economy.
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Question 7
A person who starts a new business and takes the risk of losing money is called
Correct answer: C
Entrepreneurs combine land, labor and capital to start businesses. They earn profit if it succeeds and take the loss if it fails.
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Question 8
Jordan earns $400 a month. He spends $120 on food, $90 on transportation and $150 on other costs. How much is left to save?
Correct answer: A
Add the spending: 120 + 90 + 150 = 360. Then 400 - 360 = $40. $360 is the total spent, not what is left.
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Question 9
When several businesses compete to sell the same product, consumers usually get
Correct answer: D
Businesses try to win customers by cutting prices and improving products. One company controlling a market is a monopoly, the opposite of competition.
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Question 10
Goods that a country produces and sells to other countries are called
Correct answer: C
Exports leave the country and imports come in. A tariff is a tax on imports, and a quota is a limit on how much can be imported.
Questions you leave blank are not counted as wrong.
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