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Economics Midterm

Total questions: 63

Worksheet time: 1hrs 5mins

Name
Class
Date
1.
The definition of Scarcity is...
a)
An unlimited amount of resources to meet limited wants and needs
b)
A limited amount of resources to meet unlimited wants and needs.
c)
When people use time and energy to create events
d)
a city where individuals commit themselves to unlimited wants and needs
2.
Economics is the study of how people seek to satisfy their needs and wants by making choices.
a)
True
b)
False
3.
What is the fundamental problem of economics? 
a)
How to keep consumers out of debt?
b)
How to fulfill our unlimited wants and needs with limited resources?
c)
How to figure out the way to make the most money?
d)
How do we ensure all people get a college education?
4.

WHich of the following is NOT a basic question of Economics?

a)

WHAT to produce?

b)

HOW to produce?

c)

For WHOM tom produce?

d)

WHY am I asking YOU all these questions?

5.

Which of these are factors of production?

a)

Land

b)

Labor

c)

Capital

d)

All of the Above

6.

Which phrases BEST completes the list above?

a)

Consumer Demand

b)

Entrepreneurship

c)

Regulation

d)

Urban Growth

7.

Who among the following economists wrote about the ‘Water and Diamonds’ paradox of value?

a)

David Ricardo

b)

Adam Smith

c)

Amartya Sen

d)

Milton Friedman

8.

What is the above diagram known as?

a)

The Square

b)

The Limit Does Not Exist

c)

The Circular Flow Model

d)

Laissez Faire

9.

What is Human Capital?

a)

Money Assets of a Company

b)

Immigration of people into America

c)

Treating yourself to a nice dinner

d)

A worker's skill, knowledge, and experience

10.

Every decision we make has its ______________, or alternative choices.

a)

trade-offs

b)

paradox of value

c)

scarcity

d)

stimulus check

11.

Opportunity cost is

a)

its price in dollars and cents.

b)

the cost of the next-best alternative

c)

the price of alternative goods foregone.

d)

none of the other options

12.

When Spongebob and Patrick decide to sell chocolates, they have become

a)

Merchants

b)

Entrepreneurs

c)

Captains

d)

Hedge Fund Managers

13.
Which way does a supply curve slope?
a)
down
b)
up
c)
both
d)
neither
14.
Which graph below shows the SUPPLY CURVE?
a)
A
b)
B
c)
C
d)
D
15.
The diagram represents a(n)
a)
increase in supply
b)
decrease in supply
c)
change in quantity supplied
d)
none of the above
16.

A hurricane wipes out an orange crop in Florida, sharply affecting the supply of oranges. Which chart demonstrates this concept?

a)
b)
c)
d)
17.
a)

Change in Quantity Supplied

b)

Decrease in Supply

c)

Increase in Supply

d)

Decrease in Supply and Decrease in Demand

18.

The desire to have some good or service and the ability to pay for it

a)

supply

b)

equilibrium

c)

demand

d)

quantity demanded

19.
The diagram represents a
a)
increase in demand
b)
decrease in demand
20.
Consider the market for cars in Hong Kong. If the price of gasoline increases then the Demand for cars will
a)
increase
b)
decrease
21.
A new study has shown that avocados are extremely healthy. The demand for avocados has increased due to a change in
a)
market size
b)
price of a substitute good
c)
price of a complementary good
d)
tastes and preferences 
22.
If the price of Frozen Yogurt increased then the demand for ice cream will 
a)
increase
b)
decrease
23.
The law of demand states that as the price increases then 
a)
quantity demanded increases
b)
quantity demanded decreases
c)
demand increases
d)
demand decreases
24.
The price of petrol/gas is expected to increase next week. Then today the demand for petrol/gas will
a)
increase
b)
decrease
25.
What factor could have caused the demand to decrease?
a)
incomes increased
b)
expectation that prices will increase 
c)
a decrease in the price of a substitute 
d)
increase in market size
26.
Which of the following best describes the Law of Demand?
a)
As price goes down, demand goes down. (and vice versa).
b)
As price goes down, demand goes up (and vice versa).
c)
As demand goes down, supply goes up.
d)
As demand goes up, price becomes elastic.
27.

Who primarily uses our tax money? (hint: choose 2 correct answers)

a)

Your employer

b)

The state government

c)

The Federal government

d)

Local Businesses

28.

What types of taxes contribute to Federal tax revenue? ( hint: choose 4 correct answers :)

a)

Corporate Income Tax

b)

Income Tax

c)

Estate Tax

d)

Excise Tax

29.

Where does the largest share of federal tax revenue come from?

a)

Corporate taxes

b)

General sales taxes

c)

Individual income taxes

d)

Property taxes

30.

Which of the following do homeowners pay based on the value of the residence?

a)

Corporate taxes

b)

General sales taxes

c)

Individual income taxes

d)

Property taxes

31.

What generally happens when incomes rise?

a)

Business tax revenues increase.

b)

Income tax revenues decrease.

c)

Household expenditures remain unchanged.

d)

Income tax revenues increase.

32.

What best refers to an expense that a person uses to calculate a reduction in taxable income?

a)

Horizontal equity

b)

Pay-as-you-earn

c)

Tax deduction

d)

Vertical equity

33.

What is paid to discourage the purchase of goods that do not promote consumers’ health?

a)

Excise tax

b)

Luxury tax

c)

Sin tax

d)

User tax

34.

Takes a larger share of one's income as the amount of income grows is

a)

Proportional Taxes

b)

Progressive Taxes

c)

Tax Evasion

d)

Tax

35.

Takes a smaller share of one's income as the amount of income grows is

a)

Progressive Taxes

b)

Revenue

c)

Regressive Taxes

d)

Evasion

36.

A tax rate is applied to an income range, or

a)

Progressive Taxes

b)

Tax Bracket

c)

Other Taxes

d)

Tax Credit

37.

Which of the following does the US spend the most money on?

a)

defense

b)

education

c)

international affairs

d)

health care

38.

Spending required by law

a)

discretionary spending

b)

mandatory spending

c)

federal spending

d)

surplus spending

39.

This is the yearly plan for how the US Government will spend the money it takes from taxes and borrowing

a)

federal budget

b)

the task

c)

discretionary spending

d)

mandatory spending

40.

When a government it spending more money than it is making, it is operating in a...

a)

deficit

b)

surplus

c)

IOU

d)

interest

41.

When the US is is making more money than it is spending, it is operating in a

a)

deficit

b)

suprlus

c)

interest

d)

IOU

42.
This is the top source of revenue for the federal government.
a)
individual income taxes
b)
corporate income taxes
c)
customs duties
d)
FICA
43.
FICA pays for these two entitlement programs
a)
Social Security and school lunches
b)
Medicare and Medicaid
c)
Social Security and Medicare
d)
Unemployment and Medicaid insurance
44.
The individual income tax in the U.S. is 
a)
progressive
b)
regressive
c)
proportional
45.
Which of the following is closest to the amount of our federal debt?
a)
$19 million
b)
$19 billion
c)
$19 trillion
46.
The taxing and spending policies of the president and Congress are known as
a)
revenue policy
b)
fiscal policy
c)
monetary policy
d)
recession policy
47.

The government borrows money to cover any deficits it runs by

a)

increasing taxes

b)

borrowing money from banks

c)

borrowing money from the federal government

d)

issuing bonds

48.

If you own a share of stock, you own part of...

a)

a venture capitalist

b)

a company

c)

a logo

d)

the stock market

49.

Scarcity is when...

a)

there aren't enough resources for everyone

b)

one business tries to intimidate another

c)

a company is in danger of losing all of their money

d)

a company sells too much of its stock

50.

When stocks overall are rising, the market is called?

a)

A bull market

b)

A bear market

c)

market capitalization

d)

market diversification

51.

A portion of a company’s earnings that is paid to shareholders, or people that own that company’s stock, on a quarterly or annual basis

a)

Dividend

b)

Interest

c)

Compound Interest

d)

Capital gain

52.

What is the term describing an overall decrease in stock prices?

a)

A bull market

b)

Market capitalization

c)

Market diversification

d)

A bear market

53.

The first sale or offering of a stock by a company to the public. It happens when a company decides to go public rather than remain solely owned by private or inside investors.

a)

Public Offering of Corporation (POC)

b)

First Incorporation of Company (FIC)

c)

Federal Deposit Insurance Corporation (FDIC)

d)

Initial Public Offering (IPO)

54.

A place in which different investments are traded.

a)

bank

b)

corporation

c)

stock exchange

d)

federal reserve board

55.
The Country of North Korea has a dictator that makes all of the economic decisions. What type of economy is this?
a)
Traditional 
b)
Market 
c)
Command 
d)
Centrally Planned 
56.
What type of economy do most countries in the world have?
a)
Market economy
b)
Command economy
c)
Traditional economy
d)
Mixed economy
57.

It is the study of the nations economy as a whole.

a)

Microeconomics

b)

National economy

c)

National output

d)

Macroeconomics

58.

It is the study of individuals and firms making economic decisions

a)

macroeconomics

b)

resources

c)

microeconomics

d)

opportunity cost

59.

Using the Circular Flow model as a reference, why would having full employment be a major goal of the Unites States economy? Explain in 2-3 sentences.

4 lines
60.

In at least 3 sentences, describe the relationship between supply and demand. How does one effect the other? Be sure to provide an example.

4 lines
61.

In 2-3 sentences, describe how incentives are used in economics. Be sure to provide an example of a positive (such as a bonus) and a negative (such as a sin tax) incentive.

4 lines
62.

In 2-3 sentences, describe why the government's debt is different than an individual's debt.

4 lines
63.

Reflection: What has been the most interesting concept of economics for you, and why? Explain in a few sentences.

4 lines

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