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WorksheetsEconomics- Review
Total questions: 75
Worksheet time: 38mins
Resources such as rivers, fish, trees and oil are______________________
human resources
capital resources
natural resources
goods
If a point lies on the curve this means the company/country/individual is being effcient. If a point lies inside the curve, what does that tell?
They are being over efficient
This is inefficient, or unproductive.
It is impossible with the given resources
They are still efficient, just at another point
What does point B represent?
Production at greater than the country's minimum potential
Production is less than the country's minimum potential
Production is greater than the country's maximum potential
Production at the country's maximum potential
In college people can major in a wide variety of fields including medicine, journalism, business and design among others. This is an example of the concept of
scarcity
specialization
elastic demand
progressive taxation
If the demand for a good increases when people's incomes increase
the good is an inferior good
the law of demand is violated
the good's demand curve must be upwardsloping
the good is a normal good
What caused this to happen?
Decrease in income
Increase in Income
Increase in price of substitute
Decrease in price of complement
What caused this to happen?
Price expected to rise next month
Price expected to fall next month
Increase in number of buyers
Increase in income of buyers
Suppose there is a 8 percent increase in the price of good X and a resulting 8 percent decrease in the quantity of X demanded. Price elasticity of demand for X is
0
1
8
64
For a particular good, a 12 percent increase in price causes a 3 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
There are many substitutes for this good
The good is a necessity
The market for the good is very small
The good is a luxury product
The diagram represents a(n)
increase in supply
decrease in supply
change in quantity supplied
none of the above
The movement from Point A to Point B represents a(n)
increase in the price
decrease in the quantity supplied
decrease in supply
increase in demand
Costs that must be paid regardless of how much of a good or service is produced. They do not change in the short term, regardless of output are called
Variable costs
Fixed costs
Total costs
The costs
Raw materials, packaging, wages/labour costs are examples of
Total costs
Fixed costs
Variable costs
Benefits
What does marginal cost (MC) tell us?
Is cost from fixed input
Is variable cost
additional cost of producing one more unit of a good
additional product of producing one more unit of a good
Price elasticity of supply is the responsiveness of
demand to a change in price.
price to a change in supply.
quantity supplied to a change in price.
price to a change in supply.
The supply of agricultural goods is
relatively inelastic while the supply of manufactured goods is relatively elastic.
relatively elastic while the supply of manufactured goods is relatively inelastic.
The price elasticity of demand measures the responsiveness of _____________.
the quantity demanded of a good to a change in its price
the price of a good to a change in a consumer's income
the price of a good to a change in the quantity demanded
the quantity demanded of a good to a change in a consumer's income
Which of the following is NOT one of the determinants of supply?
Change in cost of resources/inputs
Change in number of sellers
Substitutes
Change in technology
Identify the correct determinant of supply:
Example: If the cost of electricity used to power an automotive factories falls, the supply of cars in the market increases
input cost
Number of sellers
Change in expectations
Change in technology
Which of the following would be an example of a fixed cost for a factory?
rent of the building
materials used in production
seasonal labor salaries
electricity bills caused by production
What is the correct formula for total cost
Fixed Cost + Marginal Cost
Fixed Cost + Variable Cost
Labor Cost + Input Cost
Variable Cost+Marginal Cost
According to the table, calculate the marginal cost for a factory to produce from 6 to 7.
5
10
15
20
What is not a determinants of supply?
Subsidies
Change in Technology
Consumer expectation
Change in the Number of Suppliers
Which of the following does not demonstrate price equilibrium?
The diagram represents a(n)
increase in supply
decrease in supply
change in quantity supplied
none of the above
A government excise tax will usually cause supply to
increase
decrease
not change
Cars, TVs, computers belong in which part of the GDP formula? GDP = C+I+G+(X-M)
Consumption Spending
Investment Spending
Government Spending
Net Exports
An airline buying a plane belong in which part of the GDP formula? GDP = C+I+G+(X-M)
Consumption Spending
Investment Spending
Government Spending
Net Exports
Expectant parents buy supplies for the nursery. Would this be included in GDP?
Yes - Consumer Spending
Yes - Investment
No - Intermediate goods
No - Non-market activity
When calculating GDP, which of the following is subtracted?
government spending
export spending
import spending
investment by business
Illegal goods and services that are produced are...
included as an estimate in GDP
included in GDP when the authorities canprove the amount
included in the consumption category of GDP
not counted in GDP
If a product is produced but not purchased, it
is not counted in GDP
is counted in GDP
is added to GDP, then subtracted at theend of the year
lowers GDP
Components of GDP are...
consumption, investment, government purchases, and foreign exchange market
consumption, investment, government purchases, and export spending minus import spending
consumption, investment, transfer payments, and imports
consumption, investment, the money supply, and government purchases
The central bank's policy of paying banks an interest rate for the deposits that they hold as reserves.
Aggregate Supply
Reserve Requirement
Unit of Account
Interest on Reserves
Alternating periods of economic expansion and recession
Store of Value
Price Stability
Business Cycle
Market Basket
The condition in which virtually all who are able and willing to work are employed. The unemployment rate is between 4% and 6%.
Macroeconomics
Unemployment Rate
Aggregate Demand
Full Employment
Federal Reserve's actions to achieve maximum employment, price stability, and moderate long-term interest rates.
Fiscal Policy
Macroeconomics
Monetary Policy
Federal Reserve System
GDP adjusted for inflation--value of output expenditure model divided by CPI (or another price index number) times100.
Real GDP
Aggregate Demand
Full Employment
Aggregate Supply
A measurement of the total goods and services produced within a country.
Gross Domestic Product( GDP)
Output Expenditure Model
Structural Unemployment
Reserve Requirement
Legislation that changes the levels of taxation and/ or government spending to stabilize the economy.
Monetary Policy
Federal Reserve System
Macroeconomics
Fiscal Policy
Selling bonds
increases money supply
decreases money supply
High reserve requirements
lower the money supply
increase the money supply
What is an action of monetary policy?
reduce taxes
changing reserve requirements
increase spending
borrow money for deficit
What happens to the money circulation, when the FED orders a tight money policy?
more money is put out into circulation
less money is put into circulation
circulation stays the same
interest rates rise
Which of the following scenarios would cause the nation’s money supply to increase?
Decreasing government spending
Lowering interest rates
Raising interest rates
Selling bonds to investors
What action would the Federal Reserve take to control infation?
Buy government securities
Decrease the required reserve ratio
Increase taxes
Increase the discount rate
Which policy would help fight unemployment?
Expansionary
Contractionary
Which of the following are responsible for making fiscal policy decision?
The President and Congress
The Federal Reserve System
The National Council of Economic Advisors
The commerce Department
What type of GDP is calculated with the current year's prices?
Nominal GDP
Real GDP
GDP per capita
What is the equation of GDP?
C + I + (X+N)
C + I + G
C + I + G + (X-N)
C + G + U + (X+N)
A labor force of 20 million people has 18.5 million people employed. Find the unemployment rate.
10%
8.5%
7.5%
6%
A student who just graduated from college and is waiting to start their new job is...
frictionally unemployed
structurally unemployed
technologically unemployed
cyclically unemployed
seasonally unemployed
a woman who lost her job due to a decrease in sales during a recession in the economy is...
frictionally unemployed
structurally unemployed
technologically unemployed
cyclically unemployed
seasonally unemployed
Farm helpers are unemployed when the cropping season is over.
frictional
cyclical
structural
seasonal
The Market Clearing Price is at which point on the graph?
X Axis
Y Axis
Equilibrium
Supply Curve
If the price of a good is below equilibrium which of the following will result?
Equilibrium
No effect
Surplus
Shortage
Which of the following is true when there is a surplus of a good?
Quantity Supplied > Quantity Demand
Quantity Supplied = Quantity Demand
Quantity Supplied< Quantity Demand
None of the above
Which of the following best describes a subsidy?
Taxes on a consumer to discourage anactivity.
Money taken from consumers toencourage an activity.
Money given to a business to encourage anactivity.
No money changes hands.
If Mr. Walsh starts selling pickles to compete with Mr. Caryl Selling pickles, what will happen to the supply curve
AND the price for pickles?
Shift to the right and decrease in price
Shift to the left and increase in price
Shift to the left and decrease in price
Shift to the right and increase in price
A situation in which the quantity supplied is greater thanthe quantity demanded is
a shortage
a surplus
a price floor
a price ceiling
Which of these demonstrates a shortage of goods?
Goods for which demand goes down as income goes up are better known as....
Inferior Goods
Normal Goods
Public Goods
Private Goods
Determinants of demand include income,expectations,taste, and...
Consumer Preference
Taxes
Marginal Equity
Unit Elasticity
Describes demand when a given change in price causes arelatively smaller change in quantity demanded:
Inelastic
Marginal Utility
Elastic
Market Demand
Describes demand when a given change in price causes are relatively larger change in quantity demanded
Inelastic
Marginal Utility
Substitution Effect
Elastic
Price gouging laws and rent control laws are examples of which of the following?
Price floor
Market clearing price
Market minimums
Price ceiling
The economic choices made by individuals, businesses, and governments and the interactions of those choices answer which three major economic questions?
What?, How?, and Why?
What?, How?, and For Whom?
Why?, How much?, and At what price?
At what price?, What?, and Why?
A garbage truck driver is an example of which Factor of Production?
Labor
Land
Entrepreneurship
Capital
Iron, minerals, coal and plants are examples of which productive resource?
land
labor
entrepreneurship
capital
In economics a decision is free if:
There is no money involved.
There is no exchange with another person.
There are no products involved.
A decision is never free. There is usually an alternative which results in an opportunity cost. Not free.
The economic problem is that
resources are limited and wants are limited.
resources are unlimited and wants are limited.
resources are limited and wants are unlimited.
resources are unlimited and wants are unlimited.
The country of Rockonya makes 1 television every 5 hours and 1 car every 20 hours, while the country of Jamonia makes 1 television every 24 hours and 1 car every 12 hours. Rockonya has a Comparative Advantage in making televisions.
True
False
If Spain can produce 10 tons of olives or 1 ton of olive oil and Italy can produce 5 tons of olives and 5 tons of olive oil, then
Spain has the absolute advantage in producing olive oil.
Spain has the comparative advantage in producing olives.
Italy has the absolute advantage in producing olives.
Italy has the comparative advantage in producing olives.
If Spain can produce 10 tons of olives or 1 ton of olive oil and Italy can produce 5 tons of olives and 5 tons of olive oil, then
Spain should produce both olives and olive oil.
Italy should produce both olives and olive oil.
Spain should specialize in olives and Italy should specialize in olive oil and they should trade.
Spain should specialize in olive oil and Italy should specialize in olives and they should trade.
Labor, human capital, entrepreneurship, natural resources, and capital are all examples of which of the following?
Outputs
Substitutes in Production
Absolute Advantage
Factors of Production
