MOCA Practice Test

MOCA Practice Test Which of the following is the best illustration of the concept of opportunity cost? A. A state government eliminates a highway program to finance increased spending of education B. A state government grants a tax abatement to a corporation that is planning to construct a factory in the state C. A state government raises taxes to reduce a projected budget deficit D. A state government creates a new regulatory agency to provide greater oversight of financial institutions - ANS A. A state government eliminates a highway program to finance increased spending of education Which of the following concepts is most central to the problems studied by economists? A. Equality B. Diversification C. Scarcity D. Specialization - ANS C. Scarcity Which of the following best describes an advantage of pure market systems A. Equitable distribution of wealth B. Timely responses to increases in joblessness and inflation C. Efficient allocation of resources D. Coordinated planning of industrial production - ANS C. Efficient allocation of resources Entrepreneurship can be best defined as the act of: A. Promoting the voluntary exchange of goods and services B. Developing the skills and abilities that constitute human capital C. Establishing a balance between supply and demand D. Combining land, labor, and capital in productive ways - ANS D. Combining land, labor, and capital in productive ways Which of the following best describes a major difference between sole proprietorships and corporations A. Owners of sole proprietorships are personally responsible for all business debts B. Ownership of a sole proprietorship can be transferred easily without affecting the operation of the business C. The profits of sole proprietorships are taxed as business and personal income D. Sole proprietorships must comply with a broader range of state and federal regulations - ANS A. Owners of sole proprietorships are personally responsible for all business debts Which of the following forms of unemployment is generally the main focus of macroeconomic policy? A. Frictional unemployment B. Cyclical unemployment C. Structural unem