Market Launchpad Pretest
Economics Unit 1
Market Launchpad
Diagnostic Pre-Test • Foundations of Economics
Name:
Date:
Period:
Instructions
Welcome to Economics! Answer each question to the best of your ability. Show what you know—no stress!
Part A Core Economic Concepts
1
What is the fundamental economic problem that faces all societies, arising from unlimited human wants and limited resources?
A Inflation B Scarcity C Unemployment D Equilibrium
2
Scenario Analysis:
Your school receives a $1,000 grant. The student council must choose between purchasing new gym equipment OR upgrading library technology. They decide to buy the gym equipment.
Explain the trade-off and identify the opportunity cost of this decision:
3
Which of the following best defines "opportunity cost"?
A The financial expense of manufacturing a product. B The most desirable alternative given up as the result of a decision. C The time lost while waiting for a good or service to be produced.
4
Classify each asset under its correct Factor of Production: Land, Labor, Capital, or Entrepreneurship.
1. Forest wood for paper Write Factor
2. Factory forklift machine Write Factor
3. A tax accountant filing returns Write Factor
4. A founder pitching a new startup Write Factor
UNIT 1: FOUNDATIONS PRE-TEST Page 1 of 2
Market Launchpad Pre-Test Unit 1: Foundations
Part B Economic Systems
5
In a pure command economy, who primarily answers the key economic questions of what, how, and for whom to produce?
A Individual consumers B Private business owners C The central government D International trade blocs
6
Comparing Systems:
In country Liberterra, prices are set by supply and demand, and businesses are privately owned. In Equalia, a planning committee decides wages, outputs, and distribution.
Identify which has a market economy and which has a command economy:
Part C Production Possibilities Curve (PPC)
Artisan Bread Croissants Point A Point B Point C
Bakery Production Model
This graph displays the combinations of Artisan Bread and Croissants that a local bakery can produce daily with limited ovens and labor. Use this model to answer questions 7–10.
7
Which point on the graph represents an inefficient/underutilized output state?
A Point A B Point B C Point C
8
Which point is currently unattainable due to current resource constraints?
A Point A B Point B C Point C
9
How could the bakery shift its curve to make Point C attainable in the future?
A Raise prices on both products B Upgrade ovens or hire more bakers C Decide to produce only bread
10
Moving production along the curve to increase bread production:
A Requires sacrificing some croissants B Allows producing more of both goods C Has no opportunity cost
UNIT 1: FOUNDATIONS PRE-TEST Page 2 of 2
Market Launchpad Answer Key
Teacher Resource
Market Launchpad Key
Diagnostic Pre-Test Answer Key • Unit 1 Foundations
Grading Guide
10 Questions total
Evaluation Notes
Use this key to gauge student prior knowledge before teaching. Highlighted answers show correct choices. For short-answer questions, credit should be given for answers that demonstrate the underlying logical concepts.
Part A Core Economic Concepts (Q1 - Q4)
1
What is the fundamental economic problem that faces all societies, arising from unlimited human wants and limited resources?
A Inflation
B Scarcity
C Unemployment
D Equilibrium
Explanation: Scarcity is the structural gap between limited resources and theoretically limitless wants.
2
Scenario Analysis (Gym vs. Library):
Explain the trade-off and identify the opportunity cost of this decision:
Trade-off: Giving up the library technology upgrades in order to buy the gym equipment. (Any choice made when one alternative is chosen over another).
Opportunity Cost: The specific benefit or value of the upgraded library technology (the single best foregone alternative).
3
Which of the following best defines "opportunity cost"?
A The financial expense of manufacturing a product.
B The most desirable alternative given up as the result of a decision.
C The time lost while waiting for a good or service to be produced.
4
Classify each asset under its correct Factor of Production:
1. Forest wood for paper LAND
2. Factory forklift machine CAPITAL
3. A tax accountant filing returns LABOR
4. A founder pitching a new startup ENTREPRENEURSHIP
UNIT 1: FOUNDATIONS ANSWER KEY Page 1 of 2
Market Launchpad Key Unit 1: Foundations
Part B Economic Systems (Q5 - Q6)
5
In a pure command economy, who primarily answers the key economic questions of what, how, and for whom to produce?
A Individual consumers
B Private business owners
C The central government
D International trade blocs
6
Comparing Systems (Liberterra vs. Equalia):
Liberterra: Market Economy. Prices are dictated by market forces (supply and demand), with private property rights.
Equalia: Command Economy. Prices, wages, and output goals are dictated centrally by planning boards.
Part C Production Possibilities Curve (Q7 - Q10)
