WorksheetsEcon Final Exam
Total questions: 80
Worksheet time: 3600secs
Name
Class
Date
1.
Identify the potential factor of production shown in this photo.
a)
physical capital
b)
land
c)
labor
d)
risk-taking entrepreneur
2.
Which of the following is true about scarcity?
a)
Scarcity affects all societies.
b)
Scarcity exists only in poor countries.
c)
Scarce goods lead to lower prices.
d)
Scarcity of resources can be eliminated using sound economic policies.
3.
What trade-off would a person make by choosing the stairs instead of the up escalator?
a)
giving up speed in favor of ease
b)
giving up ease in favor of speed
c)
giving up exercise in favor of ease
d)
giving up ease in favor of exercise
4.
A person is considered an entrepreneur because she
a)
has earned millions of dollars.
b)
has many employees who work for her.
c)
combined resources to create new products.
d)
was a woman who succeeded in a male-dominated industry.
5.
Identify the physical capital in this photo.
a)
the house
b)
the crops
c)
the farmer
d)
the tractor
6.
What is Bob's opportunity cost if he decides to go out to eat with friends?
a)
the money spent on the dinner
b)
the money saved by not going out
c)
getting exercise
d)
having fun with friends
7.
A point to the left of the frontier on the graph above would indicate
a)
overutilization of the economy.
b)
underutilization of the economy.
c)
decreased watermelon production.
d)
decreased shoe production.
8.
Which of the following is a function of households in the market economy?
a)
provide firms with the factors of production.
b)
provide firms with goods and services.
c)
send land, labor, and capital to firms through the product market
d)
send money to firms through the factor market.
9.
Consider the diagram. Which of the following is MOST LIKELY depicted in the top half of this diagram?
a)
traditional economy
b)
free market economy
c)
centrally planned economy
d)
mixed economy
10.
Which of the following is an economic goal of the US?
a)
create government economic policies.
b)
enact government spending proposals.
c)
economic freedom.
d)
financial security.
11.
Who benefits from the free market economy? Which of the following BEST answers that question?
a)
consumers and producers
b)
people living in poverty
c)
wealthy entrepreneurs
d)
the federal government
12.
In a society with a command economy who answers the basic economic questions?
a)
consumers in markets
b)
producers in markets
c)
a central government
d)
a military commission
13.
Which role of government in the U.S. free enterprise system does this picture illustrate?
a)
to ensure that producers provide consumers with basic information about goods and services
b)
to ensure that producers provide competitors with basic information about goods and services
c)
to ensure that consumers pay only those costs that the government has agreed to
d)
to ensure that consumers are taxed on all transactions in the marketplace
14.
Which of the following would cause consumers to demand fewer slices of pizzas?
a)
an increase in the supply of pizza slices
b)
a decrease in the supply of tacos
c)
an increase in the price of pizza slices
d)
a decrease in the price of pizza slices
15.
For which product is demand likely to be the most elastic?
a)
a product with no substitutes
b)
a product with inadequate substitutes
c)
a product with many adequate substitutes
d)
it is impossible to tell
16.
When the price of something increases, the quantity demanded ____
a)
increases.
b)
decreases.
c)
remains unchanged
d)
reverses.
17.
What is the relationship between income and demand?
a)
A decrease in income increases demand
b)
A decrease in price decreases income
c)
An increase in price increases income
d)
An increase in income increases demand
18.
Prices for common vegetables tend to be elastic. Why?
a)
because other vegetables are available
b)
because consumers must eat
c)
because vegetables cannot be substituted
d)
because vegetables are inexpensive
19.
Which of these best describes the influence of high prices on the behavior of producers?
a)
They are an incentive for producers to produce more.
b)
They are an incentive for producers to buy less.
c)
They encourage producers to modify their supply schedules.
d)
They have no significant overall effect on producer behavior.
20.
According to the Law of Supply, which of these would happen to an item as its price rose?
a)
Producers would make less of it.
b)
Producers would make more of it.
c)
Producers would increase the price even more.
d)
Producers would lower the price on similar items.
21.
Factors that can cause a change in supply include
a)
technology and government regulations
b)
increases in the number of sellers and market expectations.
c)
increased or decreased government subsidies
d)
all of the above
22.
Equilibrium is reached when what occurs?
a)
quantity supplied equals quantity demanded
b)
there is no change in the quantity supplied
c)
price increases
d)
prices are inelastic
23.
What is the function of price ceilings and price floors?
a)
to create shortages
b)
to make surpluses
c)
to control prices
d)
benefits to consumers
24.
Why does an increase in gas prices lead to less consumer spending on other items?
a)
The price of gas is largely elastic
b)
The price of gas is largely inelastic
c)
The demand for gas is largely elastic
d)
The demand for gas is largely inelastic
25.
When a consumer is able and willing to buy a good or service, he creates ___.
a)
consumption
b)
demand
c)
elasticity
d)
allocation
26.
For which of these would a consumer be the least likely to find a substitute?
a)
electricity
b)
postal delivery
c)
jeans
d)
fruit drinks
27.
Which is a likely complement to a tablet computer?
a)
DVDs
b)
movie tickets
c)
apps
d)
pencils
28.
Which of these businesses could be the partnership described in the bottom row of the table?
a)
A convenience store is owned by equal partners, a mother, a father, and their adult daughter. All three work full time at the convenience store.
b)
A dry-cleaning establishment is owned and operated by one man. His brothers have invested some money in the business but don't have any responsibilities for it.
c)
A canoe rental shop is owned and operated by one woman. She has taken out loans from two different banks.
d)
An art gallery is owned and operated by a woman whose husband helps part-time. They have hired an assistant to help run the gallery.
29.
Assuming all companies shown in the diagram sell office products, what is the best description of the merger illustrated by the diagram?
a)
a conglomerate
b)
a series of vertical mergers
c)
a merger
d)
a series of horizontal mergers
30.
Which is a key characteristic of a pure/perfect competition?
a)
multiple buyers and sellers.
b)
one seller many buyers.
c)
many sellers, one buyer.
d)
none of these.
31.
What is the function of the Federal Trade Commission and laws like the Sherman Anti-Trust Act and the Clayton Act?
a)
to maintain competitive markets.
b)
eliminate monopolies.
c)
outlaw unfair business practices.
d)
all of the above.
32.
Find the group that has the greatest percentage of workers earning hourly wages of $36 and over. Which of the following is the MOST LIKELY explanation for this group earning such high wages?
a)
The demand for those workers is high, and the supply is low.
b)
The demand for those workers is high, and the supply is high.
c)
The demand for those workers is low, and the supply is low.
d)
The demand for those workers is low, and the supply is high.
33.
Why can a labor strike, such as the one shown in the photo, be an effective tool for union workers trying to make a company accept its demands?
a)
It keeps the collective bargaining process from ending.
b)
It provides a mediation process.
c)
It can slow or stop production and, thus, profits, giving company owners an incentive to resolve the issue.
d)
It can help both sides avoid an arbitration ruling.
34.
Which group is counted in the labor force?
a)
discouraged workers
b)
active military personnel
c)
workers without jobs who are seeking employment
d)
retired workers
35.
Which of the following is an advantage of sole proprietorship?
a)
There are almost no requirements to start up a sole proprietorship
b)
The owner makes all the decisions.
c)
The owner keeps all the profits.
d)
All of the above statements are true.
36.
Which are the advantages of a corporation?
a)
easy to start-up, easy to manage, owner gets all the profit.
b)
access to national advertising, professional advice, access to pre-existing product line.
c)
limited liability, easy to raise capital, unlimited life.
d)
none of the above.
37.
Which of the following were the first types of unions formed in the United States?
a)
craft unions and industrial unions
b)
craft unions and independent unions
c)
company unions and industrial unions
d)
company unions and independent unions
38.
The income earned by females has only been a fraction of that earned by
males partially because of __.
a)
in general, women lack the education to fill higher level employment.
b)
differences in human capital
c)
discrimination
d)
all of these
39.
Which of the following could cause a market failure?
a)
not enough competition in the market.
b)
resources are unavailable or mobility is obstructed.
c)
externalities or spillovers damage the success of the market
d)
all of the above
40.
When a factory pollutes a river, the resulting water pollution is an examples of
a ____.
a)
technological monopoly
b)
public good
c)
negative externality
d)
neutral spillover effect
41.
You pick up a $1 bill. What are you holding?
a)
currency
b)
a Federal Reserve Note
c)
fiat money
d)
all of the above
42.
In the early 1800s, currency in the United States was issued in many different
forms, colors and values by
a)
the Fed
b)
banks
c)
the US Congress
d)
a central bank
43.
Which of the following can accumulate large debt in the form of interest
payments?
a)
a debit card
b)
a credit card
c)
a checking account
d)
a savings account
44.
Which type of financial institution organization is a nonprofit service
cooperative for members only?
a)
a commercial bank
b)
mutual bank
c)
insurance company
d)
credit union
45.
The rate of return on a corporate, municipal, or government bond is its_____.
a)
par value
b)
inflation rate
c)
interest rate
d)
coupon rate
46.
What is the main difference between Treasury bonds, Treasury notes, and
Treasury bills?
a)
the amount of time for maturity
b)
the amount of investment
c)
the interest rate
d)
the coupon rate
47.
What is the main advantage of a mutual fund for an investor?
a)
prices are consistent over the long term
b)
has a set maturity date
c)
creates diversification of investment
d)
is sure to make a profit
48.
Which of the following is an advantage of a 401(k) plan?
a)
most employers match a portion of the employee's contribution.
b)
tax free contributions
c)
penalty free withdraw funds at any time
d)
contributions are invested in high return high risk
49.
_____________is a basic characteristic of money.
a)
portability
b)
divisibility
c)
durabilty
d)
all of the above
50.
The Federal Reserve is the___________ bank of the United States.
a)
only
b)
oldest
c)
first
d)
central
51.
One of the disadvantages of _________ is the risk of a never ending loan.
a)
debit cards
b)
savings accounts
c)
credit cards
d)
checking accounts
52.
Bond prices are determined by ______.
a)
par value
b)
maturity and coupon rate
c)
repayment risk
d)
maturity rate and bond rating
53.
A money market investment's return is based on _____.
a)
length of time the money is deposited
b)
amount of money and time it is deposited
c)
which market the money is invested in
d)
the risk of the investment
54.
Which of the following terms describes a strong stock market?
a)
bull market
b)
spot market
c)
bear market
d)
futures market
55.
Which characteristic of money demonstrates that you can easily carry it in a
pocket or purse?
a)
legal tender
b)
portability
c)
durability
d)
limited supply
56.
Which of these is an example of a nonmarket transaction?
a)
Maintaining a newspaper route
b)
Babysitting as a favor to a friend
c)
Mowing lawns to earn spending money
d)
Paying a consultant for ideas on how to improve a product
57.
Which of these would most likely negatively impact a country's overall level of income?
a)
A decrease in demand for new automobiles
b)
A decrease in demand for used automobiles
c)
Increased tourist activity during the summer months
d)
Increased commercial activity during the year-end holiday season
58.
Which of these is one of the two BIGGEST reasons for the nation's widening income inequality?
a)
Differences in education level
b)
A decline in union membership
c)
An increase in service-sector jobs
d)
Discrimination against women and minorities
59.
What sort of work is usually required of those participating in workfare programs?
a)
Clerical work
b)
Manufacturing work
c)
Service industry work
d)
Community service work
60.
Which of these is an example of an intermediate product?
a)
A new computer monitor sold alone
b)
A second hand computer monitor sold alone
c)
A computer monitor packaged as part of a new computer system
d)
A computer monitor that has been broken and needs replacement
61.
Which of these would most likely positively affect a nation's GDP?
a)
An increase in the number of non-market sales
b)
A steady growth of that nation's underground economy
c)
A government-managed restructuring of the airline industry
d)
A government contract with a large private for road construction
62.
Which of these government programs provides qualified people with food stamps?
a)
SSI
b)
SNAP
c)
TANF
d)
Medicaid
63.
Which of these statements clearly indicates a way out of poverty?
a)
Workfare is a program in which welfare recipients work for their benefits
b)
A college graduate make more than twice as much as a high school dropout
c)
Tax rates on high income have been reduced more than rates on lower income
d)
Advances in technology mean that many service jobs require fewer skills than before
64.
In which category would spending grow if the price of gasoline increased?
a)
other
b)
food
c)
transportation
d)
apparel
65.
According to this infographic, increased wages for workers in a fertilizer plant could result in
a)
layoffs of workers in fertilizer plants.
b)
wage increases for workers on farms and in grocery stores
c)
decreases in the cost of food and farm products
d)
demands for higher wages in many industries.
66.
Statistically, people are least likely to suffer from poverty if they fall into which of the following groups?
a)
white non-Hispanics in a single-parent household
b)
white non-Hispanics in a two-parent household
c)
Asians under 18 in a single-parent, female-headed household
d)
blacks in a single-parent, male-headed household
67.
What does a trough indicate?
a)
The GDP has stopped increasing and has begun to decline
b)
The GDP is stagnant
c)
There is a GDP gap
d)
The GDP has stopped declining and has begun to increase
68.
What type of unemployment occurred when the government closed military
bases
a)
cyclical
b)
long-term
c)
frictional
d)
structural
69.
Which of the following is true about inflation?
a)
Inflation has a tendency to make people change retail spending habits
b)
Economists have agreed on a single explanation for the cause of inflation.
c)
Inflation tempts some people to take advantage of rising prices.
d)
Inflation is a decrease in the general level of the prices of goods and services
70.
How did business cycles change after World War II?
a)
There were no external shocks.
b)
Business cycles became much more extreme.
c)
Recessions occurred more frequently.
d)
Recessions became shorter and periods of expansion became longer.
71.
Which if the following is the single largest source of federal revenue?
a)
individual income taxes
b)
corporate income taxes
c)
borrowing
d)
medicare payroll taxes
72.
Which of the following is the single largest federal expenditure?
a)
national defense
b)
social security
c)
interest
d)
medicare
73.
Keynesian economic policies are designed to lower unemployment by_____.
a)
Stimulating aggregate supply
b)
Stimulating aggregate demand
c)
reducing aggregate demand
d)
creating government jobs
74.
Supply-siders generally favor____.
a)
tax increases
b)
decreases in demand
c)
deregulation
d)
government intervention
75.
The most common way for governments to cover budget deficits is by _______.
a)
raising the interest rate
b)
printing money
c)
issuing debt
d)
defaulting
76.
Which of these statements would be part of an accurate description of the
Federal Reserve System (the Fed)?
a)
Like Supreme Court justices, officials of the Fed are appointed for life
b)
The Fed is both supervised and administered exclusively by Congress
c)
The political party occupying the White House is responsible for running the Fed.
d)
Completely separate from the political parts of the government.
77.
What requires banks to keep (rather than lend) a portion of their total
deposits?
a)
discount rates
b)
wage-price controls
c)
open market operations
d)
fractional reserve system
78.
Which type of fiscal policy declined in popularity after Reagan took office?
a)
Passive fiscal policy
b)
Monetarist fiscal policy
c)
supply-side fiscal policy
d)
discretionary fiscal policy
79.
Which of these exerts the most direct control over interest rates?
a)
The Federal Reserve district banks
b)
The Federal Reserve Open Market Committee
c)
The Board of Governors
d)
The Consumer Financial Protection Bureau
80.
Which of these results from the implementation of a tight money policy?
a)
A decrease in interest rates
b)
An increase in the price of credit
c)
A decrease in the price of credit
d)
An increase in wage controls
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