Economics pretest

In economic terms, what are land, labor, and capital

• production possibility

• factors of production

• production trade-offs

• opportunity costs

Jenny has enough money to buy either lunch or to go a movie with her friends. In economics, what is the choice that Jenny "gives up" called?

• positive cost

• negative cost

• opportunity cost

• marginal cost

What is the main idea behind the study of economics?

• monetary policy

• efficiency of production

• allocation of scarce resources

• business decisions

How does the process of specialization change an economy?

• eliminates unemployment

• decreases competion

• improves efficiency of producition

• increases government to control

In economic terms, what is a "stock"

• a share, or part ownership, of a company

• pieces of paper that represent money

• ownership of an entire company

• a place where individuals raise money

Which of the following decisions will guarantee that a person will make money in the stock market?

• buying the stock of a big company like Amazon

• Nothing will guarantee making money in the market

• buying the stock of a small company like Starbucks Coffee

• Purchasing stocks after the market has dropped for a week

What is "compounding interest?"

• interest subtracted from the principle once or twice a year

• interest gained on the principle and on interest already earned

• adding 5% or more interest to an item purchased the previous year

• liquefying your assets when a decision to move to another state is made

Why is investing in a money-market mutual fund a higher risk than investing in a certificate of deposit?

• it is not insured by the FDIC

• it is not protected by the Securities and Exchange Commission

• It does not earn a fixed rate of interest

• it must be held for a present amount of time

Because bonds are considered a safe investment, which characteristics would you expect them to have?

• they take a short time to mature

• they have high interest rates

• they take a long time to mature

• they have lower rates of return

Which of the following describes a publicly held corporation

• stocks are not available to company owners

• large numbers of stockholders can buy/sell stock

• stocks are not usually traded at stock exchanges

• family members are excluded from holding stock