EPF Spring 2025 Final Review

Which of the following is usually not a characteristic of capitalism or a market economy?

• Private property rights

• Centralized economic planning

• Competition among businesses

• Profit motive

Which of the following is usually not a characteristic of socialism, communism, or a command economy?

• Government ownership of resources

• Centralized economic planning

• Private ownership of businesses

• Limited consumer choice

Which of the following best defines economics?

• The study of how people make choices to satisfy their wants and needs

• The study of living organisms and their environment

• The study of past events and their impact on the present

• The study of physical matter and its properties

Which of the following does NOT accurately describe the mixed economy of the United States?

• The government has no role in the economy.

• Both private and public sectors exist.

• The government regulates some industries.

• Individuals can own private property.

If there were a drought, what would most likely happen to the supply and demand in the short term of an agricultural product that is dependent on water?

• Supply would decrease and demand would increase

• Supply would increase and demand would decrease

• Both supply and demand would increase

• Both supply and demand would decrease

If the price for an inelastic good increases, what is most likely to happen?

• there will not be a significant change in demand

• Supply of the medicine will increase

• People will spend more money on other goods

• The medicine will become free

Which of the following would be the least likely indicator of an economic contraction (decline)?

• Rising unemployment rates

• Decreasing consumer spending

• Increasing GDP growth

• Falling business investments

In the circular flow of economics, what effect would most likely occur if taxes were increased on personal income?

• Consumer spending would decrease.

• Business investments would increase.

• Government spending would decrease.

• Exports would increase.

Which of the following is a disadvantage of having a sole proprietorship?

• Unlimited liability

• Easy to set up

• Full control by owner

• All profits to owner

Which of the following statements is the least likely objective for passing a tariff?

• To protect domestic industries

• To raise government revenue

• To encourage imports

• To reduce trade deficits