Economics

In a market economy, the allocation of goods and services is determined mostly by

• regulations of the federal government
• decisions of advertisers
• the needs of individuals
• the incomes of individuals

The main function of the Federal Reserve System in the U.S. economy is to

• establish monetary policy
• establish fiscal policy
• establish trade policy
• balance the federal budget

A major problem faced by both producers and consumers in market economics is

• lack of freedom
• lack of efficiency
• lack of profit motive
• lack of economic security

When a product is selling at equilibrium price,

• producers can not supply enough of it
• consumers want more 
• producers supply what consumers demand
• daily price changes occur

When a society invests in education, it improves the standard of living by improving

• labor
• capital goods
• human capital
• entrepreneurship

What type of business organization has the advantage of specialization but the disadvantage of unlimited liability?

• sole proprietership
• partnership
• corporation
• oligopoly

Why does every economic decision involve an opportunity cost?

• scarce resources and unlimited wants
• few decisions have marginal benefit
• prices are always too high
• trade-offs are impossible

In a command economy, the means of production are owned by

• individuals
• families
• religious leaders
• the government

One disadvantage of a corporation is

• unlimited liability for shareholders
• complicated decision making process
• a lack of specialization
• inability of shareholders to earn a profit

Which of the following is a micro economic calculation?

• GDP
• unemployment rate
• interest on a loan
• CPI