WorksheetsEconomics Review
Total questions: 104
Worksheet time: 57mins
What are the 3 basic economic Questions all economies must answer:
What? When? Where?
I? D? K?
What to produce? How to produce? For whom to produce?
How much to make, how much to charge, how much profit to make?
Example: The government owns most of the property, sets the prices of goods, determines the wages of workers, plans what will be made…everything
A government with no individual economic freedom in a country would have an economic system of:
command
market
traditional
A country with complete economic freedom and no government control would be:
command
market
traditional
The amount of goods available
demand
supply
quantity
production
The factories, tools, machines used to produce goods
human capital
physical capital
free capital
capitalism
The dollar value of all final goods, services, and structures produced anywhere in a single year for a country.
productivity
Gross Domestic Product (GDP)
opportunity cost
National Debt
A person who provides a good or service
producer
need
want
consumer
A person who purchases a good or service
consumer
taxes
supply
good
how much of a good or service consumers want
demand
spending
producer
scarcity
What is the definition of economics?
The study of human behavior and attitudes
The study of past events and the impact they have had on people
The study of political and social interactions
The study of the production and distribution of goods and services
Which is NOT a factor of production?
Land
Labor
Economic benefit
Capital
What is a debit card?
A card that provides money that you have in your bank account.
A card that allows you to spend money based on credit or money you do not have.
A card to spend whatever you want.
A magic card.
Courtney’s Hair Palace is a small, locally owned beauty salon in New Orleans. This represents what type of business?
corporation
partnership
sole proprietorship
Sophia is starting her own coffee shop. What economic term would best describe Sophia and what does that term mean?
Consumer – a person who uses or consumes goods
Partnership – partner in the lemonade stand
Entrepreneur- - person who takes a risk to start a new company
What is inflation?
decrease in prices
no change in prices
rise in prices
A rise in demand
The amount of money that could be made by working instead of going to college is best described as:
a sunk cost
a fixed cost
an external cost
an opportunity cost
Which participant in the circular flow model above is represented by letter A?
Firms
Government
Households
Banks
The quantity demanded of Sprite has decreased. The best explanation for this is that:
Sprite consumers had increase in income
The price of Sprite increased
The price of 7-UP has increased
Sprite’s advertising is not as effective as in the past
An externality is when the production or consumption of something ...
is controlled by the government.
increases the rents of the producer or consumer.
benefits or hurts the producer or consumer in some way.
benefits or hurts someone other than the producer or consumer.
A supply curve is usually drawn as ...
upward sloping as it moves from left to right.
downward sloping as we move from left to right.
horizontal.
vertical.
Which of the following situations leads to a lower equilibrium price in the market place?
A decrease in supply, without a change in demand.
An increase in demand, without a change in supply.
A decrease in supply accompanied by an increase in demand.
An increase in demand accompanied by an increase in supply.
Minimum wage laws are examples of ...
progressive taxation
price ceilings
price floors
regressive taxation
When the government grants the exclusive right to use a process or sell a specific product for a certain number of years, this right is known as ...
a patent
a franchise
a profit motive
an oligopoly
Which of the following is not likely to be price discrimination:
A student getting a discount at movie theaters if they present their student identification.
Denny’s gives a discount to people over the age of 55 on the same meal as other customers buy at a higher price.
Allowing a child to eat free if they are with a full paying adult meal.
A gas station giving a 3% discount to someone who pays with cash rather than credit card, due to processing fees charged by credit card companies.
Most small businesses start out as ...
franchise systems
partnerships
sole proprietorships
corporations
A minimum wage set much higher than the equilibrium wage will most likely have what effect on unemployment?
It will increase unemployment, because people will leave the workforce.
It will increase unemployment, because new people will enter the workforce.
It will decrease unemployment, because people will leave the workforce.
It will decrease unemployment, because new people will enter the workforce.
A major limitation of the gross domestic product (GDP) measure is that ...
it only accounts for illegal transactions that take place within the black market.
services, which make up the majority of the economy, are not included in GDP.
GDP measurements are unable to reflect changes in the economy over time.
it is hard to assign a dollar value to qualify improvements in goods and services.
If the federal government runs a budget deficit, what will occur?
The national debt will increase in size.
Interest rates will have a tendency to decline.
State governments will have extra money to offset the national deficit.
Gross domestic product will decrease immediately.
Taxation and discretionary spending are the components of a government’s ...
fiscal policy
financial policy
monetary policy
expansion policy
The type of policy administered by the Federal Reserve System is known as ...
monetary policy
fiscal policy
budget policy
open-market policy
The basic theory of comparative advantage states that a nation should specialize in the production of the good or service that the nation ...
is the most experienced at producing.
has an absolute advantage in producing compared to its trading partner.
produces with lower opportunity costs than its trading partner.
can produce without having to import raw materials.
Mutual funds are usually less volatile than individual stocks because:
mutual funds are diverse in the types and quantities of assets they contain.
returns on mutual funds are protected by the federal government.
mutual funds are not affected by fluctuations in the stock market.
the value of mutual funds cannot be altered by inflation or deflation.
A monthly budget can help you achieve financial security by ...
helping you choose investment options.
increasing your financial awareness and helping you allocate your money more effectively.
reducing the likelihood that you will face unplanned expenses.
expanding the borrowing limits on your existing credit cards.
Who is the most likely to have to pay high finance charges?
an employed individual who makes their payments on time.
a person who has a bad credit history and lots of debt.
a customer who pays their bills online.
a person who pays off their credit card balance each month .
What deductions are automatically taken out of paychecks? Choose two.
Income tax FICA (Social Security and Medicare
Car payment
Medicaid
Credit card payments
Why do some forms of investment have a greater return than others?
Greater risk.
Larger investment.
Cooler company
More investors
Interest that is calculated each month so you pay interest on the interest is called ...
simple interest
compound interest
multiple interest
rotating interest
To improve your eligibility for loans and get lower interest rates, you need to have ...
money in the bank.
a lot of credit card debt already.
good credit.
bad credit.
What is interest?
What you owe.
How much debt you can handle.
The cost of borrowing money.
A penalty for not paying back money owed.
The U.S. economy impacts the economies of other nations through tariffs and ...
quotas
trade wars
exports
imports
What is "absolute advantage" in relation to trade?
a country’s ability to produce more of a given product than another country can produce.
a country’s ability to produce a given product relatively more efficiently than another country by doing it at a lower opportunity cost.
a country's ability to produce less a product than another country.
A country's ability to produce a product at a higher cost than another country.
What is "comparative advantage"?
a country’s ability to produce more of a given product than another country can produce.
a country’s ability to produce a given product relatively more efficiently than another country by doing it at a lower opportunity cost.
A country's ability to produce less of a product than another country.
A country's ability to produce a product at a higher cost than another country.
What do we call a country with relatively low average per capita income and less developed infrastructure, education and health care system?
Developing
First World
Unfortunate
Poor
What is a production possibility curve?
A graph that shows the maximum production on of a single item.
A graph that shows changes in production based on the addition of addition or subtraction of a factor of production.
A graph that shows the maximum production of two possible items: Guns vs. Butter.
A graph that shows the intersection of supply and demand.
What type of graph shows the maximum production of two possible items: Guns vs. Butter?
supply and demand curve
production possibility curve
profit and loss curve
risk and reward curve
What is the Factor Market?
The market where things are produced.
The market where final goods are sold.
The market where commodities are traded.
The market where stocks are traded.
What is the Product Market?
The market where things are produced.
The market where final goods are sold.
The market where commodities are traded.
The market where stocks are traded.
What is an Externality?
Anything outside the production process.
An unintended side effect that either benefits or harms a third party not involved in the activity that caused it.
An intentional side effect that benefits a third party not involved in the activity that caused it.
An intentional side effect that harms a third party not involved in the activity that caused it.
How is scarcity different than a shortage?
Scarcity is short term , while a shortage is permanent
Scarcity does not impact production, while a shortage does impact production.
Scarcity makes prices go down, while a shortage makes prices increase.
Scarcity is long term, which a shortage is typically temporary.
When the quantity of a product demanded is greater than the quantity supplied, this is called a ...
scarcity
opportunity
shortage
risk
North Korea is an example of what type of economy?
Traditional
Command
Market
Mixed
Sweden is an example of what type of economy?
Traditional
Command
Market
Mixed
The United States most closely resembles what type of economy?
Traditional
Command
Market
Mixed
Hunter gatherers in the Africa's Kalahari Desert most likely have what type of economy?
Traditional
Command
Market
Mixed
What is the term for the amount of a product that is offered for sale at all possible prices?
supply
demand
opportunity cost
scarcity
When the price of a product goes up, what happens to the amount of that product that will be offered for sale?
The amount offered for sale will go down
The amount offered for sale will go up
The amount offered for sale will stay the same
The amount offered for sale will go go both up and down
What is the term used for the price where the amount supplied equals the amount demanded?
Balance price
Scarcity price
Equilibrium price
Risk price
What is elasticity in economics?
The measure of how a change in price affects the quantity demanded.
The measure of how a change in price affects the amount supplied.
The measure of how a change in price affects opportunity cost.
The measure of how a change in price affects government regulation.
If a small change in price results in a large change in the quantity demanded, that demand is said to be ...
Crazy
Risky
Elastic
Inelastic
If a large change in price results in a small change in the quantity demanded, that demand is said to be ...
Crazy
Risky
Elastic
Inelastic
How are demand and quantity demanded different?
Demand is at any price, while quantity demanded is at all prices.
Demand is at all prices, while quantity demanded refers to a single consumer.
Demand is at all prices, while quantity demanded is at a single price.
Quantity demanded is at all prices, while demand is at a single price.
In relation to the demand curve or quantity demanded, what is the "income effect"?
A change in the quantity of a product demanded because of a change in price that alters the real income of consumers
A change in quantity demanded because of the change in the relative price of a product.
A small change in price resulting in a large change in quantity demanded.
A large change in price resulting in a small change in quantity demanded.
In relation to the demand curve or quantity demanded, what is the "substitution effect"?
A change in the quantity of a product demanded because of a change in price that alters the real income of consumers
A change in quantity demanded because of the change in the relative price of a product.
A small change in price resulting in a large change in quantity demanded.
A large change in price resulting in a small change in quantity demanded.
What can supply and quantity supplied of a proiduct to shift?
Change in the cost of resources or productivity.
Changes in technology or the number of sellers.
Changes in taxes and government subsidies.
Changes in expectation or government regulations
all of these.
How is equilibrium achieved in the market?
When there is too much supply, have a sale.
When there is not enough supply, raise prices.
Both of these.
Neither of these.
Which of the following is NOT a form of government intervention that affects supply in the market?
Taxes
Regulations
Subsidies
Patents
Purchasing
Which of the following is NOT a form of price discrimination?
Membership discounts.
Student discounts.
Senior discounts.
Holiday discounts.
What is "increasing marginal return"?
Production per employees increases with the addition of a new worker.
Production per employees decreases with the addition of a new worker.
Production per employees remains the same with the addition of a new worker.
Production per employees increases, but at a slower rate, with the addition of a new worker.
What is "decreasing marginal return"?
Production per employees increases with the addition of a new worker.
Production per employees decreases with the addition of a new worker.
Production per employees remains the same with the addition of a new worker.
Production per employees increases, but at a slower rate, with the addition of a new worker.
What is "negative marginal return"?
Production per employees increases with the addition of a new worker.
Production per employees decreases with the addition of a new worker.
Production per employees remains the same with the addition of a new worker.
Production per employees increases, but at a slower rate, with the addition of a new worker.
A market where costs of production are minimized by having a single firm produce the product (Like electricity or water) is called:
Patent/Copyright
Technological monopoly
Geographical monopoly
Natural monopoly
Which of the following is NOT a form of legal monoploy?
Patent/Copyright
Technological monopoly
Geographical monopoly
Natural monopoly
Intellectual monopoly
What is "profit"?
The total sales of a company.
Total sales of a company minus the cost of labor (if a positive number).
Total sales minus all the costs of production (if a positive number).
Total sales minus taxes and labor (if a positive number).
What is "commodity money"?
Money backed by something like gold or silver.
Money that has value because the government says it does.
Money used to buy commodities rather than goods or services.
Money used to expand or contract the market.
What is "fiat money"?
Money backed by something like gold or silver.
Money that has value because the government says it does.
Money used to buy fiats rather than goods or services.
Money used to expand or contract the market.
When the government uses taxing and spending to influence the economy, this is called:
Contractionary
Expansionary
Monetary policy
Fiscal Policy
When the Federal Reserve expands or contracts the money supply to affect the cost and availability of credit, this is called:
Contractionary
Expansionary
Monetary policy
Fiscal Policy
When the government is trying to grow the economy, this is called:
Contractionary
Expansionary
Monetary policy
Fiscal Policy
When the government is trying to slow the economy down to combat inflation, this is called:
Contractionary
Expansionary
Monetary policy
Fiscal Policy
Why does the government regulate monopolies?
The government does not regulate monopolies
To prevent foreign competition.
To prevent abuses and keep prices reasonable.
To increase the number of businesses and, therefore, employment
How does specialization impact output per worker?
Specialization decreases output per worker.
Specialization increases output per worker.
Specialization has no impact on output per worker.
A little specialization increases outper worker, while too much specialization decreases output per worker.
How does inflation impact society?
Inflation increases the general level of prices (reduces buying power).
Inflation can result in less money in circulation.
Inflation decreases the general level of prices (increases buying power).
Inflation has no impact on society.
How does deflation impact society?
Deflation increases the general level of prices (reduces buying power).
Deflation can result in less money in circulation.
Deflation decreases the general level of prices (increases buying power).
Deflation has no impact on society.
How does unemployment impact society?
Unemployment increases the general level of prices (reduces buying power).
Unemployment can result in less money in circulation.
Unemployment decreases the general level of prices (increases buying power).
Unemployment has no impact on society.
A country’s ability to produce more of a given product than another country can produce is called:
Comparative advantage
Relative advantage
Marginal advantage
Absolute advantage
A country’s ability to produce a given product relatively more efficiently than another country by doing it at a lower opportunity cost is called:
Comparative advantage
Relative advantage
Marginal advantage
Absolute advantage
A high-yield, high-risk security, typically issued by a company seeking to raise capital quickly in order to finance a takeover.
Bonds
Mutual funds
Stocks
Junk bonds
A collection of stocks and bonds that spreads out the risk.
Bonds
Mutual funds
Stocks
Junk bonds
An instrument of indebtedness of the issuer to the holders.
Bonds
Mutual funds
Stocks
Junk bonds
Part ownership in a corporation and entitles you to part of that corporation's earnings and assets.
Bonds
Mutual funds
Stocks
Junk bonds
