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Praxis Social Studies: Economics

Scarcity, markets, the national economy, trade, and public choices for middle and high school economics.

Teacher certification exams are administered by testing organizations. FreeExam is not affiliated with those organizations, and these questions are original practice, not an official test.

Praxis is a trademark of Educational Testing Service. FreeExam is not affiliated with Educational Testing Service, and these questions are original practice, not an official test.

  1. 1.A workshop has 6 sewing machines and 10 students who each need a machine during the same hour. What does this show?

  2. 2.Luis can spend one free hour tutoring for $16 or washing a car for $9. He tutors. What is his opportunity cost?

  3. 3.A cook has flour for 12 muffins or 3 loaves. Each loaf uses as much flour as 4 muffins. If the cook bakes 8 muffins, how many loaves can still be baked?

  4. 4.A library pays students $4 for each box of donated books they sort. What result is most likely?

Oak Street fruit stand

The Oak Street fruit stand sold only apples for four weeks. Each week the owner set one price and recorded how many pounds shoppers bought. The stand had 60 pounds of apples on hand at the start of every week.

Week 1: price $2 a pound, 40 pounds sold. Week 2: price $3 a pound, 30 pounds sold. Week 3: price $4 a pound, 20 pounds sold. Week 4: price $1 a pound, 50 pounds sold.

  1. 5.Using the fruit stand notes, what happened to pounds sold when the price went from $2 in week 1 to $4 in week 3?

  1. 6.At a weekend market, the peach price is above the price where the number of buyers equals the number of peaches offered. What is likely next?

  2. 7.The price of coffee rises, and tea is a substitute for coffee. What happens in the tea market if nothing else changes?

  3. 8.A frost destroys part of the orange crop. Demand for oranges stays the same. What happens to price and quantity sold?

Oak Street fruit stand

The Oak Street fruit stand sold only apples for four weeks. Each week the owner set one price and recorded how many pounds shoppers bought. The stand had 60 pounds of apples on hand at the start of every week.

Week 1: price $2 a pound, 40 pounds sold. Week 2: price $3 a pound, 30 pounds sold. Week 3: price $4 a pound, 20 pounds sold. Week 4: price $1 a pound, 50 pounds sold.

  1. 9.Using the fruit stand notes, which week brought in the most revenue?

  1. 10.A city sets a maximum rent below the rent at which apartments wanted equal apartments offered. What should a class expect?

  2. 11.The government sets a minimum milk price above the price where milk offered equals milk wanted. What result fits?

  3. 12.Peanut butter and jelly are used together. The price of peanut butter falls. What happens to demand for jelly?

Millford budget note

Last year Millford collected $8 million in taxes and spent $10 million. For next year the council is comparing two plans. Plan A would raise tax collections by $3 million and leave spending at $10 million. Plan B would keep tax collections at $8 million and cut spending by $2 million.

The note also says the town park is open to every resident, and one family using a picnic table does not stop another family from using a different table at the same time.

  1. 13.Using the Millford budget note, what was the town budget gap last year?

  2. 14.Using the Millford budget note, what budget result does Plan A produce?

  3. 15.Using the Millford budget note, what does Plan B do to next year's budget?

  4. 16.Using the Millford budget note, why does the town park fit the classroom picture of a public good?

  1. 17.Many wheat farms sell the same kind of wheat, and a new farm can start without a special license. Which structure is this?

  2. 18.One company owns the only bridge into a town, and no other company may build a second bridge. Which structure is this?

  3. 19.Three airlines fly the only route between two cities, and a new airline would need costly gates. Which structure fits?

  4. 20.A downtown has many sandwich shops. The sandwiches differ a little, and a new shop can open. Which structure fits?

Oak Street fruit stand

The Oak Street fruit stand sold only apples for four weeks. Each week the owner set one price and recorded how many pounds shoppers bought. The stand had 60 pounds of apples on hand at the start of every week.

Week 1: price $2 a pound, 40 pounds sold. Week 2: price $3 a pound, 30 pounds sold. Week 3: price $4 a pound, 20 pounds sold. Week 4: price $1 a pound, 50 pounds sold.

  1. 21.Using the fruit stand notes, how many pounds were still unsold at the end of week 3?

  1. 22.A model country records these final sales this year: households $6 million, new tools $2 million, government $2 million, exports $3 million, and imports $1 million. What is GDP?

  2. 23.A bakery sells flour to a pizza shop, and the shop sells pizzas to families. Which sale belongs in GDP?

  3. 24.Nominal GDP rises from $10 million to $11 million, but the quantity of goods did not change. What should a class conclude?

  4. 25.A small student price index goes from 20 to 22. What is the inflation rate?

  5. 26.Lena lends $100 to be repaid as $100 next year, with no interest, and prices rise 10 percent. Who is hurt?

  6. 27.Omar borrows $200 to be repaid as $200 next year, and prices rise during the year. How does that inflation affect Omar?

  7. 28.Which change is a cost-push source of inflation, in plain classroom words?

  8. 29.In a town, 80 people have jobs, 20 people are looking for jobs, and 10 people are not looking. What is the unemployment rate?

  9. 30.A worker quits one job and spends three weeks interviewing for another. Which unemployment is this?

  10. 31.A mine closes, and the miners' skills do not match the new clinic jobs in town. Which unemployment is this?

  11. 32.A recession causes shops to lay off clerks who still want work and are looking. Which unemployment is this?

  12. 33.During a recession, which fiscal action is meant to raise total spending?

  13. 34.Prices are rising fast because buyers want more than the economy can produce. Which fiscal action fits?

  14. 35.Who sets the short-term policy interest rate used for monetary policy in the United States?

  15. 36.The country is in a recession and inflation is low. Which monetary action fits?

  16. 37.Inflation is high, and the central bank wants to slow spending. Which action fits?

  17. 38.Sam can make 4 loaves or 2 jars of jam in an hour. Nia can make 2 loaves or 4 jars in an hour. Who has the comparative advantage in loaves?

  18. 39.In one afternoon, Bea paints 6 chairs and Theo paints 2 chairs, using the same time and the same tools. Who has the absolute advantage?

  19. 40.A country imports $9 million of goods and exports $5 million. What is the trade balance?

  20. 41.A country places a tariff on imported shoes. What happens to the price of those shoes inside the country?

  21. 42.A quota allows only 30 foreign bicycles into a country that had been importing 50. What is the direct effect?

  22. 43.A factory's smoke falls on homes down the road, and the factory does not pay those families. What is that smoke?

  23. 44.A flu shot protects the patient and also makes it less likely that classmates get sick. What does the classmates' protection show?

  24. 45.Streetlights shine for everyone on a block, and one walker does not use the light up. If payment is voluntary, what problem is likely?

  25. 46.A beekeeper's bees pollinate a fruit grove, and the grove pays nothing for that help. Which policy can support more hives?

  26. 47.A town charges a factory $2 for each ton of soot. Releases fall from 9 tons to 6 tons. What did the fee do?

  27. 48.Priya has $12. Apples cost $2 and bananas cost $1. She buys 4 apples. How many bananas can she still buy?

  28. 49.A 10-ounce juice costs $2, and a 20-ounce juice costs $3. Which has the lower price per ounce?

  29. 50.Diego values the first pizza slice at $5, the second at $3, and the third at $1. Each slice costs $2. How many should he buy?

  30. 51.A student earns $40, spends $25 on food, and spends $10 on bus fare. How much is left to save?

  31. 52.A bank pays 5 percent interest on $200 for one year, with no fees. How much interest is earned?

  32. 53.Which list names the four factors of production a middle school class should know?

  33. 54.A clinic pays nurses for a course that lets each nurse see more patients in a day. What grew?

  34. 55.One worker makes 8 clay cups a day. After a new kiln, that worker makes 12 cups a day. What happened to productivity?

  35. 56.In the simple circular flow, households supply labor to firms. What do firms pay households for that labor?

  36. 57.Which statement best describes a command economy for a middle school class?

  37. 58.In a market economy, what mainly decides which goods are produced?

  38. 59.Blueberry prices rise because a festival crowd wants more, and farmers plant more bushes next season. What job did the price do?

  39. 60.Alone, each of two students packs 6 lunch kits an hour. After they split the tasks, together they pack 16 an hour. What does the gain show?

  40. 61.Which sale should be left out of this year's GDP so its value is not counted twice?

  41. 62.In a classroom model, real GDP is $8 million and the population is 2 million. What is real GDP per person?

  42. 63.A sales tax of $2 is added to a $10 item. What total does the buyer pay?

  43. 64.A price index rises from 100 to 125, and a weekly paycheck stays at $100. What buying power does that paycheck have at the old prices?

  44. 65.Which person is counted as unemployed?

  45. 66.A household buys 4 boxes of cereal at $3 a box and 2 boxes at $5 a box. What does that change illustrate?

  46. 67.At $6, bakers will sell 15 pies and buyers will buy 15 pies. What is that $6 price called?

  47. 68.At a price of $5, buyers want 18 hats and makers offer 12 hats. What is the gap?

Oak Street fruit stand

The Oak Street fruit stand sold only apples for four weeks. Each week the owner set one price and recorded how many pounds shoppers bought. The stand had 60 pounds of apples on hand at the start of every week.

Week 1: price $2 a pound, 40 pounds sold. Week 2: price $3 a pound, 30 pounds sold. Week 3: price $4 a pound, 20 pounds sold. Week 4: price $1 a pound, 50 pounds sold.

  1. 69.Using the fruit stand notes, how much revenue did week 4 bring in?

  1. 70.Demand for bus rides rises, and the company adds buses. The ride price stays the same. What must be true of the two shifts?

  2. 71.A study says carrots help eyesight, so shoppers want more carrots at every price. What kind of change is that?

  3. 72.Leather prices rise, and leather is used to make belts. What happens to the supply of belts?

Millford budget note

Last year Millford collected $8 million in taxes and spent $10 million. For next year the council is comparing two plans. Plan A would raise tax collections by $3 million and leave spending at $10 million. Plan B would keep tax collections at $8 million and cut spending by $2 million.

The note also says the town park is open to every resident, and one family using a picnic table does not stop another family from using a different table at the same time.

  1. 73.Using the Millford budget note, which plan leaves taxes and spending equal?

  1. 74.A teacher wants a plain example of inelastic demand. Which case fits?

  2. 75.Concert tickets have substitutes such as movies and ball games. A small price rise cuts ticket sales a lot. What demand is that?

  3. 76.One wheat farm gets $4 a bushel, the same price every other farm gets. What if this farm asks $6?

  4. 77.Compared with many sellers of the same good, what is a usual result when one seller sets the price?

  5. 78.Why might one water company serve a town more cheaply than two companies that each lay a full set of pipes?

  6. 79.Four gas stations in one town agree to charge the same high price. What is that agreement, in plain words?

  7. 80.A law allows only 5 taxi firms, and a new firm must hold one of those costly licenses. What does the cap do?

  8. 81.Which purchase is consumption in the GDP formula?

  9. 82.A bakery buys a new delivery van to use for several years. Where does that purchase go in the GDP formula?

  10. 83.The government pays $7 million in salaries to public school teachers. Which GDP term includes that spending?

  11. 84.Exports are $4 million and imports are $4 million. What are net exports?

  12. 85.Which change raises a country's net exports?

  13. 86.In one day, Country A can make 6 shirts or 3 radios. Country B can make 2 shirts or 2 radios. Who has the comparative advantage in radios?

  14. 87.In one day, Rio can sew 10 hats or 5 scarves. Lila can sew 4 hats or 4 scarves. Who has the comparative advantage in hats?

  15. 88.A fishing village can dry 8 nets of fish or weave 4 sails a week. A harbor town can dry 3 nets or weave 3 sails. They specialize and trade. Why can both gain?

  16. 89.A bus pass brings a household $8 of extra benefit and costs $5. What should the household do?

  17. 90.One more study hour raises a quiz score by 2 points, and each point is worth $1 to the student. That hour could earn $3 at a job. What should the student do?

  18. 91.A saver deposits $100 for one year at 4 percent interest, with no fees. What is the balance at the end of the year?

  19. 92.A borrower repays a one-year loan of $50 at 10 percent interest. How much interest is paid?

Oak Street fruit stand

The Oak Street fruit stand sold only apples for four weeks. Each week the owner set one price and recorded how many pounds shoppers bought. The stand had 60 pounds of apples on hand at the start of every week.

Week 1: price $2 a pound, 40 pounds sold. Week 2: price $3 a pound, 30 pounds sold. Week 3: price $4 a pound, 20 pounds sold. Week 4: price $1 a pound, 50 pounds sold.

  1. 93.Using the fruit stand notes, what was week 1 revenue?

  2. 94.In the fruit stand notes, price fell from $2 in week 1 to $1 in week 4, and pounds sold rose from 40 to 50. Which pattern is that?

  1. 95.A tax takes 10 percent of a $100 income and 20 percent of a $200 income. How much tax does the $200 income pay?

  2. 96.A tax takes $10 from a $100 income and $10 from a $400 income. What happens to the share of income paid?

  3. 97.Which item is a want, rather than a need, in a household budget lesson?

  4. 98.A family has $30 for the week, plans $18 for food, and plans $7 for bus fare. How much is left?

  5. 99.A jacket costs $40. A coupon takes $5 off, and then a $2 sales tax is added to the reduced price. What does the buyer pay?

  6. 100.A worker earns $12 an hour and works 6 hours. How much is earned before any tax?

  7. 101.Inflation caused by buyers trying to purchase more than firms can produce is called what?

  8. 102.A fixed basket cost $40 last year and $50 this year. What is the inflation rate for that basket?

  9. 103.Prices rise 8 percent one year and 2 percent the next year. What is true in the second year?

  10. 104.A retired teacher gets a pension of $300 a month that does not change. Prices rise. Who is hurt?

  11. 105.Unemployment that rises in a deep recession, because spending across the economy has fallen, is called what?

  12. 106.A labor force has 40 people employed and 10 people looking. Then 10 employed people retire and stop looking. What is the new unemployment rate?

  13. 107.A city spends $6 million and collects $6 million in taxes. What kind of budget is that?

Millford budget note

Last year Millford collected $8 million in taxes and spent $10 million. For next year the council is comparing two plans. Plan A would raise tax collections by $3 million and leave spending at $10 million. Plan B would keep tax collections at $8 million and cut spending by $2 million.

The note also says the town park is open to every resident, and one family using a picnic table does not stop another family from using a different table at the same time.

  1. 108.Using the Millford budget note, by how many millions is Plan A's tax increase larger than Plan B's spending cut?