Level A
  This cognitive level represents the “lowest” or most basic level, and includes items that require the recall of facts and the recognition of principles. This level includes the categories of knowledge and comprehension.
  Knowledge: This is the lowest level of learning. Items in this category are those that require the recall of ideas, material, or phenomena related to the topic of interest. In these questions, you will be asked to define, identify, and select information.
 
  Example:
  A market situation where a small number of sellers comprise an entire industry is known as
  a. a natural monopoly.
  b. monopolistic competition.
  c. an oligopoly.
  d. pure competition.
 
  Key = c
  To correctly respond to the item above, you must recall the textbook definition of an oligopoly.
 
  Comprehension: Items in this category require you to grasp the meaning of the material presented in some novel way. A question testing for comprehension describes some principle or fact in words different from those used in textbooks, and often uses a situation as a way to present the idea. In order to answer the item correctly, you must recognize the principle demonstrated in the problem; memory alone will not be sufficient for identifying the correct answer.
 
  Example:
  Social legislation, such as the Occupational Safety and Health Act (OSHA) and the Environmental Protection Act (EPA), is frequently criticized for being inefficient because the agencies
  a. use flexible rather than rigid standards.
  b. rely heavily on the free market to allocate resources.
  c. rarely consider the marginal benefits relative to the marginal costs.
  d. enforce their policies too leniently.
 
  Key = c
  In order to answer this item correctly, you must know something about the issues or principles in connection with OSHA and the EPA. Other questions dealing with this level of testing are those that ask you to identify an option which best explains, illustrates, or provides an example of the concept in question.
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