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IG Economics Review

Total questions: 135

Worksheet time: 2hrs 45mins

Name
Class
Date
1.
In this type of economy, the people decide the supply, demand, and price.  
a)
Market 
b)
Traditional
c)
Command 
d)
Mixed
2.

Which type of economy has central ownership, the government, and lack of individual choice?

a)

Market

b)

Mixed

c)

Command

d)

Traditional

3.
Which of the following are markets involved in the circular flow model?
a)
Factor Market and Resource Market
b)
Labor Market and Product Market
c)
Factor Market and Product Market
d)
Resource Market and Labor Market
4.
Which two groups of people are represented in the circular flow model?
a)
Buyers and Sellers
b)
Producers and Consumers
c)
Government and Private Individuals
d)
Households and Businesses
5.

The amount of money a business makes after its expenses are paid

a)

profit

b)

supply

c)

demand

d)

scarcity

6.

Focusing on a narrow range of products/services that can be produced most efficiently and cost-effectively.

a)

subsistence

b)

specialization

c)

scarcity

d)

bartering

7.

Competition and profit motive are important characteristics of a:

a)

command economy

b)

traditional economy

c)

market economy

d)

socialist economy

8.

The development of a worldwide economy where resources flow fairly freely across borders.

a)

Globalization

b)

Economy

c)

GDP

d)

Economic Independence

9.

Privatization refers to ....

a)

Transfer of assets from people to government

b)

Transfer of assets from public to private organizations

c)

Transfer of assets from corporate to public

d)

Transfer of assets from corporate to government

10.
If the supply of a good is higher than the demand, what happens to the price?
a)
It stays the same
b)
Price goes down
c)
Price goes up
d)
It's FREE!!
11.
An increase in competition would have what effect on price?
a)
Price goes up
b)
Price stays the same
c)
Price goes down
d)
It explodes
12.
If there is no competition in your market, how would that impact your business?
a)
You could charge more for your product
b)
You would make more
c)
You would hire more employees
d)
You would charge less for your product
13.
How will scarcity of a capital good impact price?
a)
Price would go up
b)
Price would go down
c)
Price would stay the same
d)
You wouldn't sell any
14.
New technology that increases the speed of production would have what impact on the prices of goods?
a)
Prices would lower
b)
Prices would increase
c)
Prices would stay the same
d)
Business would close
15.

In a ______________ economic system, the government owns resources and controls production, prices, and wages

a)

traditional

b)

market

c)

command

d)

mixed

16.

What is a free market economy?

a)

An economy based on supply and demand with little or no government control

b)

The international exchange of goods

c)

An economy in which decisions are made by the government

d)

An economy that is communist

17.

____________ economic activities add value to raw materials by processing them or changing their form. Ex: wood being made into tables/furniture

a)

Primary

b)

Secondary

c)

Tertiary

18.

What is Gross Domestic Product?

a)

Goods, services, and intermediate products bought by people in other countries.

b)

the total value of goods produced and services provided in a country during one year

c)

The amount of output the average worker can produce in an hour.

19.

Country: Barksdalia

Per Capita GDP: $45,000

Life Expectancy: 85

Literacy Rate: 95%

a)

Developed

b)

Developing

20.
A _____________ is a person who starts a business.
a)
Teacher
b)
Entrepreneur
c)
Actor
d)
Student
21.

What do economists mean by the term "scarcity"?

a)

Having too few or too little of resources

b)

Having too many resources

c)

Having just enough resources

d)

Having the correct amount of resources

22.

Which choice best describes the economic problem of scarcity in the world?

a)

People have limited wants there is an unlimited amount of resources.

b)

People have unlimited wants but there is a limited amount of resources

c)

People have no wants so resources don't matter

23.

These productive resources are raw materials that come from nature or the earth that people use to make goods.

a)

Natural Resources

b)

Human Resources

c)

Capital Resources

24.

Which of the following is not one of the three basic questions economists try to solve?

a)

What should be produced?

b)

How should it be produced?

c)

Who gets what is produced?

d)

When should it be produced?

25.

What is the total amount of payment received from a consumer for a good or service?

a)

Costs

b)

Profits

c)

Deductions

d)

Revenue

26.

What is the general increase in prices over time?

a)

Inflation

b)

Deflation

c)

Stagflation

d)

Hyperinflation

27.

What do you call the tools and equipment needed to create a good or service?

a)

Capital Resources

b)

Human Resources

c)

Land Resources

d)

Entrepreneurial Ability

28.

What do you call a country with a strong economy and easy access to education, healthcare, and vital goods and services?

a)

Least Developed Country

b)

Less Developed Country

c)

More Developed Country

d)

Third World County

29.

The majority of the least developed countries can be found on which continent?

a)

Africa

b)

Asia

c)

Europe

d)

South America

30.

Which of the following are benefits of NAFTA? (Choose all that apply)

a)

Increased Trade

b)

Improved the US Economy

c)

Decreased the Negative Environmental Impact of many companies

d)

Decreased the cost of imports

e)

Companies moved to other countries to produce goods

31.

Which of the following are ways that countries attempt to limit trade? (choose all that apply)

a)

Tariffs

b)

Deficit

c)

Quotas

d)

Investment

e)

Embargo

32.
If a drought severely reduces the amount of asparagus available to consumers, what would you expect to happen?
a)
The demand for asparagus will go down.
b)
The price of asparagus will go up.
33.
My new Nikes were introduced in May for $129.99, but by December they are being sold for $69.99.  According to the law of supply and demand, which is most likely to be true about the Nikes.
a)
Supply for the Nikes are was hight but the demand was low.
b)
Supply for the Nikes was low but demand was high.
34.
What is a high price a signal for?
a)
government to enact price controls
b)
producers to offer less & consumers to buy more
c)
producers to offer more & consumers to buy less
d)
suppliers to reduce sales until prices peak
35.
When the quantity supplied is greater than the quantity demanded
a)
a shortage has occurred.
b)
a surplus has occurred.
c)
it doesn't mean anything.
d)
government intervenes.
36.
The thing that you give up (the next best alternative) when you make a decision is known as
a)
Opportunity Cost
b)
Scarcity
c)
Incentive
d)
Choice
37.
Trading something for something else - no currency involved
a)
demand
b)
barter
c)
goods
d)
market
38.

Which of the following will increase your profit for selling hot chocolate?

a)

Use expensive materials

b)

Lower the price

c)

Give each buyer more hot chocolate

d)

Use cheaper materials

39.
Businesses provide government with...
a)
taxes
b)
sales
c)
private goods & services
d)
interest
40.
In terms of resources, what do households provide for businesses?
a)
loans
b)
savings
c)
labor
d)
private goods
41.
What do businesses & households provide for banks?
a)
savings
b)
loans
c)
mortgages
d)
private services
42.
The Circular Flow model proves that the sectors of the economy are...
a)
independent
b)
dependent
c)
interdependent
d)
round
43.

Market failure arises whenever firms

a)

make a loss

b)

replace machines with workers

c)

create externalities

d)

reduce expenditure on research and development

44.

Market failure results in a misallocation of resources. In some cases, this can be corrected by the government

a)

restricting the manufacture of goods that generate positive externalities

b)

Providing public goods

c)

subsidising all loss-making firms

d)

placing a tax on merit goods

45.
Getting a flu shot is an example of a ________ externality
a)
Negative
b)
Neutral
c)
Positive
46.
When a third party member is affected by the interaction of a buyer and seller, we call this
a)
An externality
b)
The tragedy of the commons
c)
consumer surplus
d)
total welfare
47.
A market failure is best described as
a)
The idea that market forces of supply and demand always provide the maximum benefit for society
b)
The idea that market forces of supply and demand do not always provide the maximum benefit for society
c)
The concept that a decision made by one party can have negative effects on another party
d)
The concept that a decision made by one party can have positive effects on another party
48.
Using resources in such a way that we continue living in a developed world, but at the same time we protect the environment. This is the definition of:
a)
Suspensability
b)
Ecology
c)
Sustainability
d)
Ecological precautions
49.
Police protection is an example of a _ good and apples are an example of a _ good. 
a)
Public; Private
b)
Private; Public 
c)
Public; Public
d)
Private; Private 
50.
"Assistance by the government to individuals or groups or individuals, such as firms, consumers, industries or sectors of an economy" Is the definition for
a)
Excise Taxes
b)
Ad Valorem Taxes
c)
Indirect Taxes
d)
Subsidies
51.

From an economic standpoint, government intervention is justified

a)

When the private sector is larger than public sector.

b)

Because the government will encourage the production of private goods.

c)

Because the government can increase the level of market power of private businesses.

d)

When the market mechanism fails to achieve the optimal mix of output.

52.
The quantity of peanuts supplied increased from 40 tons/week to 60 tons/week when the price of peanuts increased from $4/ton to $5/ton. The price elasticity of supply for peanuts over this price range is:
a)
Elastic
b)
Inelastic
c)
Unit Elastic
d)
Perfectly Inelastic
53.
A city's transit authority increases the price of subway and bus tickets from $1.25 to $1.50. If the demand for these tickets is price inelastic, 1) the # of people riding buses & subways AND 2) the city's revenues will change in which way (respectively)?
a)
1) Increase; 2)Increase
b)
1) Decrease; 2) Increase
c)
1) Decrease; 2) Decrease
d)
1) No Change; 2) Increase
54.
If a 10 percent increase in the price of a good leads to a 25 percent decrease in the quantity demanded of a good, demand is:
a)
Relatively inelastic
b)
Relatively elastic
c)
Perfectly elastic
d)
Perfectly inelastic
55.
For an inferior good, an increase in consumer income will cause:
a)
The demand curve to shift left
b)
The demand curve to shift right
c)
The supply curve to shift left
d)
The supply curve to shift right
56.
In which of the following cases would a firm's total revenue increase?
a)
Price increases and demand is elastic
b)
Price decreases and supply is inelastic
c)
Price decreases and demand is inelastic
d)
Price decreases and demand is elastic
57.
Based on the demand curve for good X, it can be determined that good x has:
a)
Many substitutes
b)
A few substitutes
c)
No substitutes
d)
Only one substitute
58.

A product is likely to have a price elasticity of demand that exceeds 1 when:

a)

Its price falls

b)

It is a necessity

c)

It has close substitutes

d)

Consumers are not very responsive to changes in price

59.
 If the price elasticity of demand for a product equals 1, as its price rises the:
a)
Quantity demanded does not change.
b)
 Total revenue increases.
c)
 Total revenue does not change
d)
 Quantity demanded increases.
60.
The price elasticity of demand measures how much
a)
quantity demanded responds to a change in price.
b)
quantity demanded responds to a change in income.
c)
price responds to a change in demand.
d)
demand responds to a change in supply.
61.
Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of X demanded. Price elasticity of demand for X is
a)
0
b)
1
c)
6
d)
36
62.
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?
a)
There are many substitutes for this good.
b)
The good is a necessity.
c)
The market for the good is narrowly defined.
d)
The relevant time horizon is long.
63.
OPEC successfully raised the world price of oil in the 1970s and early 1980s, primarily due to
a)
an inelastic demand for oil and a reduction in the amount of oil supplied.
b)
a reduction in the amount of oil supplied and a world-wide oil embargo.
c)
a world-wide oil embargo and an elastic demand for oil.
d)
a reduction in the amount of oil supplied and an elastic demand for oil.
64.
The formula for calculating elasticity of demand is:
a)
The % change in price over the % change in quantity demanded
b)
The % change in quantity demanded over the % change in price
c)
The change in price over the change in quantity demaned
d)
The change in quantity demanded over the change in price
65.
which of the following is not a determinant of demand elasticity?
a)
availability of substitutes
b)
share of consumer's budget spend on good
c)
duration of adjustment period
d)
government spending
66.

What does it mean?

Ed > 1

a)

Perfectly inelastic demand

b)

Inelastic demand

c)

Unitarily elastic demand

d)

Elastic demand

e)

Perfectly elastic demand

67.

Which of the following has more elastic demand?

a)
b)
c)
d)
68.

Which of the following has more elastic demand?

a)
b)
c)
d)
69.

Which of the following has more inelastic demand?

a)
b)
c)
d)
70.

When a country sends or sells its goods to another country it ___________ them.

a)

imports

b)

exports

c)

donates

71.

Bringing in goods or services from another is country

a)

exports

b)

imports

c)

donates

72.

A new tax is added to pharmaceutical imports from the United Kingdom.

a)

tariff

b)

quota

c)

embargo

73.

Germany places a block on all imports from Sri Lanka

a)

tariff

b)

quota

c)

embargo

74.

France imposes a limit on Avocado imports from Mexico.

a)

tariff

b)

quota

c)

embargo

75.
What would be one consequence of a prolonged decline in the value of the euro relative to the U.S. dollar?
a)
European exports to the United States would become less expensive.
b)
U.S. exports to Europe would become cheaper.
c)
European imports from the United States would increase.
d)
U.S. imports from Europe would become more expensive.U.S. imports from Europe would become more expensive.
76.

What is the GDP of the U.S.?

a)

5 Trillion Dollars

b)

12 Trillion Dollars

c)

1 Trillion Dollars

d)

18 Trillion Dollars

77.
If I am better at all types of production, I have the ______ in all forms of production.
a)
Comparative advantage
b)
Specialization
c)
Absolute advantage
d)
developed nation
78.
A trade agreement between 27 countries of with the same currency and open trade between those nations.
a)
NAFTA
b)
EU
c)
WTO
d)
ABC
79.
A trade agreement between Canada, Mexico, and the US
a)
NAFTA
b)
EU
c)
WTO
d)
ABC
80.
Developed nations have all of the following except
a)
better education
b)
high levels of technology
c)
better health
d)
higher populations
81.

Human Development Index is...

a)

the average number of years a person is expected to live.

b)

a tool for ranking countries based on their level of economic development.

c)

how much humans develop over time.

82.

Countries with high infant mortality rates and low life expectancy are in which level of economic development?

a)

More Developed

b)

Newly Industrialized

c)

Less Developed

83.

The average annual income of a worker in a country.

a)

Per Capital GDP

b)

GDP (Gross Domestic Product)

c)

Labor Force by Occupation

84.

Number of babies that die before 1st birthday (per 1000 births) in 1 year.

a)

Maternal Mortality Rate

b)

Infant Mortality Rate

c)

Life Expectancy

85.

According to the International Monetary Fund, GDP per Capita is highest in the following countries.


This would mean most people in the country ___________________.

a)

Have a high standard of living

b)

Have a low standard of living

c)

Live in rural areas

d)

Live in the capital cities

86.

A farmer would fall under which economic activity?

a)

Quaternary

b)

Tertiary

c)

Secondary

d)

Primary

87.

Which of the following are used to calculate HDI? (CHECK ALL THAT APPLY)

a)

Literacy rate

b)

GNI per capita

c)

Poverty rate

d)

Life expectancy

e)

Average years of schooling

88.

Which of the following is the dominant economic sector in developed countries?

a)

primary

b)

secondary

c)

tertiary

d)

quaternary

e)

quintary

89.

Which pairing of economic sectors is correct? (CHECK ALL THAT APPLY)

a)

Fishing/primary

b)

Automobile manufacturing/secondary

c)

Apple executive/tertiary

d)

Soft drink bottling plant/tertiary

e)

Accountant/tertiary

90.

As less developed countries start developing economically, fewer citizens work in the ______________ economic sector because _____________ ?

a)

Tertiary; the need for services is greater in poor countries

b)

Secondary: developed countries send their manufacturing industries overseas.

c)

Primary: a country’s resources are being used up as it develops

d)

Primary: technology makes these jobs more efficient so fewer workers are needed

e)

Secondary: as a country’s wealth increased, fewer factories are needed.

91.

One's level of wealth, comfort, and material goods is called..

a)

economic development

b)

human development

c)

standard of living

d)

social change

92.

The number of adults who are able to read and write in a country is the....

a)

proportion of labor

b)

GNI

c)

literacy rate

d)

per capita rate

93.

Which of the following factors influence worker productivity. economic growth, and the future standard of living for a nation? (CHECK ALL THAT APPLY)

a)

access to healthcare

b)

education

c)

new technology

d)

food security

94.

"Development" as measured by the UN means...

a)

An increase in the value of the output of a country’s goods and services

b)

The improvement in a country’s wealth and the living conditions of its people

c)

The division of a nation’s jobs into different sectors

d)

The quality and price of goods imported into a country

e)

The value of a product compared to the needed labor

95.

What is the best definition of poverty?

a)

Not having the latest iphone

b)

Not being able to afford new clothing

c)

not having enough money to meet basic needs including food, clothing and shelter

d)

Being homeless, not having food and wearing old clothes.

96.

Under normal circumstances countries develop gradually over time. Suggest circumstances where a country might actually become less developed. Select 2 options.

a)

Corruption

b)

War

c)

Recession

d)

Natural disaster

e)

Poor harvest

97.

A country described as an MEDC is...

a)

More developed

b)

less developed

c)

newly industrialised

d)

Money efficient

98.

Which is the LEDC

a)

Norway

b)

Germany

c)

Brazil

d)

Central African Republic

99.

What is debt?

a)

Paying back more than you borrowed

b)

When you owe someone something, such as money.

c)

When someone has something you want

d)

Interest, paid back on a loan

100.

What is the extra money you pay back, the fee for having a loan.

a)

Debt

b)

trade

c)

tariff

d)

Interest

101.

Analyze the Population Pyramid: What type of country would this population pyramid represent?

a)

This would represent a developing country with a high death rate and a high birth rate

b)

This would represent a developed country as it has a high birth rate and a high death rate.

c)

This would represent a stationary country as nothing is changing.

d)

None of these are correct

102.

This country Cambodia has a Poverty line of $1.25 USD a day, but in the USA the Poverty Line is $35 a day, would someone living in Poverty in the USA be living in Poverty if they moved to Cambodia

a)

Yes, because Poverty is not relative to each person

b)

No, because Poverty is not relative to each person.

c)

Yes, because Poverty is subjective based on where you live.

d)

No, because Poverty is subjective based on where you live.

103.

Blank measures how many deaths there are per 1,000 people in a country

(a)  

104.

Which energy source is consumed most in the U.S.?

a)

Coal

b)

Natural Gas

c)

Petroleum

d)

Nuclear

105.

What is owning all the businesses in a particular field?

a)

Vertical Integration

b)

Horizontal Integration

c)

Trust

d)

Antitrust

106.

John D. Rockefeller practiced horizontal integration by buying

a)

wildcatters

b)

oil refining business

c)

steel businesses

d)

pipelines and tankers

107.

Owning every step in the manufacturing process is

a)

trust

b)

monopoly

c)

vertical integration

d)

horizontal integration

108.

what is a trade union?

a)

(a) It is an organisation

b)

(b) A group of workers

c)

(c) Trade unions are independent organisations that represent workers to their employers

d)

(d) To register a trade union, you must apply to the Registrar of labour Relations

109.
Which of the following is NOT a function of a trade union?
a)
Improving working conditions
b)
Increasing shareholders' dividends
c)
Raising member's wages
d)
Representing members' interests
110.
A trade union is an organisation that represents...
a)
The views and interest of workers
b)
a group of people working towards a common aim
c)
the aims of managers
d)
the goals of a business
111.

A student records her income and spending for past month, she uses the function of money

a)

Medium of exchange

b)

Standard of deferred payments

c)

Unit of account

d)

Store of value

112.

A medium of exchange is_______

a)

something that is generally acceptable in exchange for goods and services

b)

a legally recognized asset that is generally accepted in exchange for goods and services.

c)

something that circulates and provides a standardized means of evaluating the relative price of goods and services.

d)

The ability of money to command purchasing power in the future

113.

Easily transferred from one person to another, to make the exchange of money for goods/services easier

a)

Durability

b)

Divisibility

c)

Portability

d)

Scarcity

114.

Money has what if it doesn't deteriorate when it is being handled?

a)

Scarcity

b)

Divisibility

c)

Durability

d)

Portability

115.

Money has what if it can be broken down into smaller units so it can be used as needed?

a)

Divisibility

b)

Portability

c)

Scarcity

d)

Durability

116.

What are the functions of money?

a)

Unit of account

b)

Store of Value

c)

Medium of Exchange

d)

Store of Bank Notes

e)

Measure of Value

117.

What is an exchange rate?

a)

The rate at which goods are exchanged between two countries

b)

The price of one nation's currency in terms of another's

c)

How many US dollars you can exchange for RMB at Travelex

d)

The price of goods in terms of a foreign currency

118.

According to the table, what is the USD equivalent of 1 Australian?

a)

0.97 USD

b)

1.32 USD

c)

1.28 USD

d)

1.03 USD

119.

How is an exchange rate determined in the money market?

a)

The forces of supply and demand

b)

Government/the Federal Reserve Bank

c)

Whatever sellers of goods are willing to take

d)

Investors decide the value of the currency they wish to invest

120.

Why do changing exchange rates help one country and hurt the other?

a)

One side loses purchasing power and the other gains it

b)

Takes money away from one side and gives it to the other

c)

Causes war between the two countries

d)

One country's government introduces tariffs to protect local industries

121.

What type of exchange rate system do most countries operate under?

a)

Flexible

b)

Floating

c)

Fictitious

d)

Fixed

122.

What is the difference between a fixed rate exchange system and a floating rate system?

a)

Government sets rate vs market sets rate

b)

Doesn't exist vs does exist

c)

Never changing vs always changing

d)

Currency never appreciates vs can appreciate

123.

If the US $ were to appreciate in relation to the Euro, what effect would this have?

a)

European consumers would have more purchasing power in US

b)

US consumers can buy more European goods and services for fewer $$

c)

US consumers can buy more English goods and services for fewer $$

d)

European tourists to the US will spend more $$

124.

If the Mexican Peso depreciates in relation to the Chinese Yuan, how is Mexico affected?

a)

Mexico has less purchasing power in Chinese currency

b)

Mexico benefits from increased purchasing power

c)

Mexico would have more Chinese investors

d)

They would be invaded by China

125.

The currency exchange rate of the South African rand for the Botswana pula fell by 5.7% between August 2014 and August 2015. What would be the immediate effect of this?

a)

Botswana’s level of protection would fall.

b)

Botswana’s tourists travelling to South Africa would find it less expensive

c)

South Africa’s imports would be cheaper.

d)

South Africa’s tourists travelling to Botswana would receive more pula per rand

126.

What is likely to cause a rise in a country’s foreign exchange rate?

a)

a fall in its exports of goods and services

b)

a fall in its imports of goods and services

c)

a fall in its inflow of income

d)

a rise in its outflow of transfers

127.

In 2009 the exchange rate of the Singapore dollar changed from 1.49 = 1 US dollar to 1.43 Singapore dollars = 1 US dollar.

How would this affect the import prices and export prices for Singapore?

a)

decrease/decrease

b)

decrease/increase

c)

increase/decrease

d)

increase/increase

128.

If the exchange rate is £1 = $1.25, what is $2250 equivalent to in £ pounds?

a)

£1800

b)

£2813

c)

£2250

d)

None of the answers

e)

£1700

129.

You are a UK business that exports to the US market. If the £1 goes from being equal to $1.25 to $1.50, what will happen to your exports to the US?

a)

Exports to US will become more expensive and decrease

b)

Exports to US will become cheaper and increase

c)

Exports to US will stay the same

d)

None of the answers

e)

Exports to US will become cheaper and decrease

130.
An effective price floor must be set above equilibrium, resulting in:
a)
a shortage
b)
a surplus
c)
limited choices
d)
None of the above
131.
If the government set the price at $700, would that be a price ceiling or floor?
a)
Price Ceiling
b)
Price Floor 
c)
Neither
132.

When a price ceiling is imposed in a market:

a)

A surplus results

b)

Sellers of the product are made better off

c)

A shortage results

d)

Quantity supplied is greater than the quantity demanded

133.

At the price, neither a surplus or a shortage exists

a)

equilibrium

b)

consumer surplus

c)

producer's surplus

d)

dead weight

134.
A price floor, such as minimum wage, is a 
a)
legal maximum price for a good or service.
b)
market equilibrium price caused by a shortage.
c)
market equilibrium price caused by a surplus.
d)
legal minimum price for a good or service.
135.
A black market is 
a)
a market in which there are high barriers to entry and homogeneous products.
b)
a market with only one supplier and unlimited demand.
c)
a market where there are many buyers and sellers and few consumers.
d)
a market in which sellers illegally sell to buyers at higher than legal prices

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