Economics - Unit 2 - Test

The BEST explanation of why there will always be scarcity is because

• governments create scarcity to keep people wanting more

• natural disasters create frequent shortages

• people and their tools are inefficient

• while peoples’ wants are unlimited, resources are limited

Unit 1 Review: Which is an example of a capital resource?

• metal tools

• an abundance of coal

• low-cost labor

• a clean water supply

Assume that an economy produces cotton T-shirts and metal stop signs. Which of these would cause the production possibilities curve for this economy to shift outward / to the right?

• a decrease in the price of cotton

• an increase in the price of both goods

• a decrease in the demand for t-shirts

• an increase in the labor force

Unit 1 Review: Haley realizes that if she studies an extra hour for her Econ test, she will score five points higher. For each extra hour spent studying, she is getting one hour less sleep. When deciding whether to spend an additional hour studying or sleeping, Haley is engaged in what economic activity?

• trade negotiations

• marginal analysis

• non-fraudulent voluntary exchange

• bartering

Some products (such as roads, sewer systems, and railroads) are NOT adequately supplied by the marketplace acting alone. Therefore, choices about building such things are made by

• governments

• referendums

• stockholders

• private corporations

How might APR affect a consumer’s choice of which credit card to choose?

• A consumer would not worry about the card’s APR

• Consumers would look for a card with a lower APR

• Consumers would look for a card with a higher APR

• APR would determine how much credit the consumer received

Unit 2 Review: Local governments generally receive their highest amounts of revenue from

• federal government grants

• driver's license fees

• property taxes

• corporate donations

Unit 2 Review: Which of these forms of taxation has been criticized for placing an excessive burden on people with less ability to pay?

• luxury taxes

• progressive taxes

• regressive taxes

• inheritance taxes

An investment that is a loan issued to corporations or the government that promises to repay borrowed money, plus interest, on a fixed schedule are...

• bonds

• stocks

• CDs

• mutual funds

An insurance policy with a lower premium MOST LIKELY has

• no liability limit

• a lower deductible

• a higher deductible

• a lower liability limit