Economics Final Exam Review

A tax on an imported good in order to protect domestic markets?

• Import Quota

• Voluntary Import Restraint

• Embargo

• Protective Tariff

An oven at a bakery is an example of which factor of production?

• labor

• entrepreneurship

• natural resource

• capital

During times of economic boom, the Federal Reserve may see it necessary to actually slow the rate of economic growth. What is one way the Fed can do this?

• The Fed can lower the discount rate, opening up more money to lenders.

• The Fed can print more money to increase the money supply.

• The Fed can buy government bonds to increase the money supply.

• The Fed can raise the discount rate, making it costlier for banks to borrow and lend money.

Which of the following represents a negative economic cost of globalization?

• Countries focus too heavily on exports.

• Globalization threatens to minimize local cultures.

• Wealthy countries still seek to protect their industries with tariffs.

• Developing countries ignore things like human rights and environmental regulation in favor of economic development.

The United States can produce t-shirts more efficiently than any other country? Indonesia can produce t-shirts at a lower opportunity cost. The U.S. has many other industries that export goods at a higher value, but Indonesia best exports are textiles. Based on this, which of the following statements best explains what the U.S. should do with regard to tshirt production?

• The U.S. should stop producing t-shirts because Indonesia has a lower opportunity cost, and therefore a comparative advantage over the U.S. in t-shirt production.

• The U.S. has a comparative advantage in t-shirt production because it can produce more efficiently than Indonesia. The U.S. should continue to produce.

• The U.S. has an absolute advantage in t-shirt production, so it should continue to produce.

• The U.S. has no advantage over Indonesia in tshirt production and should stop production.

The most highly valued opportunity or alternative forfeited when a choice is made

• Trade

• Specialization

• Interdependence

• Opportunity Cost

Not being able to have all of the goods and/or services that you want because people have endless wants, but goods and services aren't endless. So people are forced to make choices.

• Scarcity

• Trade

• Standard of Living

• Human Resources

What is the correct equation for calculating profit?

• TR - TC = P

• TC + TR = P

• P = TR x TC

• P = a + b + c

In a market economy, the opportunity to make a profit for providing a good or service is called

• incentive

• inflation

• inducement

• interest

What is the opportunity cost when this economy shifts production from point B to point C?

• 7 mobile phones

• 4 mobile phone

• 10 cameras

• none of the above