Font size
WorksheetsEconomics Final
Total questions: 109
Worksheet time: 2hrs 59mins
Economists differentiate between goods and services. Which of the following represents payment for a service?
Two dollars for a hamburger
Fifteen dollars for a haircut
Thirty Eight dollars for a textbook
Twenty Thousand Dollars for a car
All of the following are factors of production expect
land
cars
labor
factories
Economists study:
past civilizations by examining artifacts
social relationships, such as social classes and social mobility
government and how people choose their leaders
the production, distribution and consumption of goods and services
Human wants are:
always fixed
limited
unlimited
likely to decrease over time
The sacrifice involved when you choose a particular course of action is called the:
alternative
opportunity cost
consumer cost
producer cost
Economic growth is an important goal because:
more jobs, goods, and services will be needed in the future
prices have stabilized
the population is likely to decline
more people are working than ever before
Which of the following is a consumer good?
house cleaning
dog grooming
stereo system
nursing care
Currency consists of:
credit cards
paper money only
coins and paper money
paper money and checks
Which of the following is NOT a form of credit?
charge accounts
installment plans
credit cards
checking accounts
Where is the greatest degree of specialization likely to be found?
in small agricultural areas
in large agricultural areas
in large metropolitan cities
in poor rural areas
What term is defined as the amount of output per unit of input?
productivity
investment
surplus
demand
Which of the following is a service?
clothing
telephones
haircutting
television
Economic scarcity may be the result of:
demand exceeding supply
a decrease in the demand for resources
an unlimited supply of resources
an increase in supply
An example of a natural resource is all of the following except:
oil
coal
tree
car
Which of the following is considered to be a human resource?
worker
forest
computer
tractor
In which type of economic system are consumers likely to determine what goods will be produced?
market
traditional
command
wartime
The motivation for starting a business in capitalism is to:
provide taxes for the government
provide jobs for workers
earn a profit for the owners
help everyone become more equal
According to Karl Marx, the course of history has been guided exclusively by
economic forces
great leaders
religious ideas
none of these
In a command economy, decisions are based on:
consumer demands
orders of central planners
tradition and custom
the invisible hand
In a market economy, economic decisions are mad according to:
central planners
customs
supply and demand
government
To operate properly, a market economy needs all of the following except:
private property
competition
profit motive
government ownership of businesses
How goods are produced in a market economy is determined chiefly by
individual business people
the government
monopolies
labor unions
Most jobs are handed down from parent to child in a:
traditional economy
command economy
modified market economy
market economy
Capitalism is an economic system in which:
the factors of production are owned by private citizens (land, labor, capital)
the government directs the use of resources
decisions are based on tradition
a few risks are involved
Which one of the following is one of the basic economic questions?
what to produce
who to produce for
how to produce
all of the above
As the price of an item increases, the amount demanded:
increases
decreases
remains constant
cannot be predicted
The demand for workers in an industry tends to rise as
the supply increases
the demand for goods produced decreases
the demand for goods produced increases
productivity falls
There are many competitive firms, an increase in a demand may be expected to result in
a decrease in production
no change in production
an increase in production
the elimination of ineffective firms
According to the law of demand, as the price of an item increases, consumers will buy:
a different item
the same amount
less of the item
more of the item
Supply and demand curves meet at the:
surplus point
equilibrium point
shortage point
supply point
When are the supply of a commodity increases, while demand remains the same, the market price will
rise
fall
stay the same
vary directly with demand
Which of the following prices is closest to the zero point on the graph?
$1.00
$2.00
$3.00
$4.00
At what price would each of 20 baseballs be sold?
$1.00
$2.00
$3.00
$4.00
How many baseballs would be purchased if the price were $1.00 per ball?
20
30
40
50
The equilibrium price is the point at which:
quantity supplied equals quantity demanded
suppliers make a profit
suppliers lose money
demand causes prices to rise
Which of the following statements is most valid?
if the price consumers are willing to pay for an item declines, more of that item will be produced
if consumers are willing to pay more for an item, less will be produced
if consumers are willing to pay more for an item, more will be produced
producers will try to turn out goods at the fastest rate possible regardless of cost
An established credit rating can be damaged if:
a person has no collateral
a borrower fails to live up to the repayment terms of an agreement
a person's income increases
a person's expenses decrease
The free market involves:
the free provision of products by the state
the subsiding of products by the government
market forces of supply and demand
all trade occurring via barter
A mixed economy:
allocates resources via supply but not demand
allocates resources via demand but not supply
allocates resources via supply and demand
allocates resources via market forces and government intervention
Which of the following is NOT likely to be true in a command economy?
businesses may pursue social objectives
the profits of a business belong to the government
resources are allocated by government directives
market forces determine what is produced and who receives the products
Competition is present when
subsides assure that inefficient firms remain active in the market
freedom of entry and rival firms are present in a market
the market is characterized by rising prices and declining product quality
there is little incentive to introduce new produces and discover better ways of doing things
When a person takes out a loan from a bank, the bank makes money by charging
license fee
interest
stocks
bonds
Economics is best defined as the study of how people, businesses, governments, and societies
make choices to cope with scarcity
attain wealth
choose abundance over scarcity
use their infinite resources
Which of the following is not likely to lead to an increase in business investment?
an increase in taxes
an improvement in sales outlook
a decline in interest rates
population growth
Scarcity requires that people must
reade
cooperate
compete
make choices
Human capital is
machinery that meets or exceeds federal safety standards for use by humans
all capital owned by individuals or corporations, but not by corporations or government
all capital owned by individuals or corporations, but not by governments
the skill and knowledge of workers
An example of physical capital would be ...
a tree
an oven in a bakery
the cows on a dairy farm
workers in a factory
Who owns a corporation
stockholders and bondholders
stockholders only
bondholders
the Board of Directors
When investing, options are:
separate debt instruments that can be bought or sold on separate, independent markets
separate ownership instruments that can be bought or sold on separate, independent markets
contracts allowing holders to buy or sell certain amounts of financial instruments at a set price during a specified time
are exactly the same thing as futures in the commodities market
Some banks offer services that include:
automatic deposit
automatic payment
automatic teller machines (ATM)
all of the above
When individuals save money, they are using it primarily:
as a medium exchange
as a store of value
as a measure of value
for batering
Commercial banks, credit unions, and savings and loan associations are similar in that they are all:
mutual savings banks
financial institutions
member banks of the Federal Reserve
members of FSLIC
The Federal Reserve System was established to:
be in competition with the wildcat banks
protect the national government
regulate the United States banking system
assist the Bank of the United States
Banks make a profit by:
paying bank depositors a higher interest rate than the rate charged to individuals who borrow money
charging to a credit union
charging those who borrow money a higher interest rate than they pay bank depositors
the sale of bonds
The oldest and most prestigious stock exchange in the U.S. is the:
NASDAQ
New York Stock Exchange
American Stock Exchange
Chicago Board of Trade
The three C's of credit are:
character, capital, and charity
charity, capital, and censor
character, capacity, and capital
character, capacity, and charity
An autoworker is considered ____ and earns ____.
labor; wages
labor; rent
capital; rent
entrepreneurship; wages
Which of the following part of the money supply would be considered fractional money
credit cards
coins in the United States
checks in the United States
none of these
Because we face scarcity, every choice involved
the question "what"
money
giving up something for nothing
an opportunity cost
From the graph, it appears that between 1950 and 1985:
personal income rose
prices of automobiles increased
inflation was the most serious economic problem
price levels for consumer goods increased
Between which years were prices lowest?
1930-1940
1940-1950
1960-1970
1970-1980
Opportunity cost means
the accounting cost minus the marginal benefit
the highest-valued alternative forgone
the monetary costs of an activity
the accounting cost minus the marginal cost
The benefit that arises from an increase in an activity is called
an incentive
the marginal cost
the marginal benefit
opportunity cost
Refers to man-made goods, such as tools, which are used to produce other goods:
labor
physical capital
human capital
land
In the United States, taxation may be used to accomplish all of the following except:
redistribute income
discourage the consumption of specified goods
reduce purchasing power
promote the purchase of particular brands of merchandise
One reason that the national debt exists is because the government:
has a balanced budget
plans to lend money to foreign countries
has passed only regressive taxes
spend more money than it collects in revenues
Individuals who are willing to take risks, to bring the resources together and develop new products, and start new businesses
entrepreneurs
government officials
elected representatives
employees
The most widely used market average to monitor how the "market" is doing on a goven day is the:
Standard and Poor's 500
Dow Jones Transportation Average
Dow Jones Industrial Average
S & P Midcap 400 Index
We are forced to make choices because
not everything is limited
shortages are a constant situation
we live in a democracy
all resourced as limited
Which term is best defined as the idea that countries rely on one another for goods they cannot produce efficiently by themselves?
outsourcing
globalization
specialization
interdependence
Growing world trade has brought most of the nations of the world together into:
a global economy
five giant communities
cartels
a new world order
The factors of production are land, ____, and capital.
raw goods
finished product
labor
investment
All the combinations of goods and services that can be produced in a given time with a fixed amount of resources are called
costs
product possibilities
factors of production
trade-offs
Pure capitalism (with no govt intervention) is also known as a
mixed economy
laissez-faire system
quota system
command economy
Economics is the study of:
production technology
consumption decisions
how society decides what, how, and for whom to produce
the best way to run society
A market can accurately be described as:
a place to buy things
a place to sell things
the process by which prices adjust to reconcile the allocation of resources
a place where buyers and sellers meet
In a free market _____ _____
governments intervene
governments plan productions
governments interfere
markets and prices adjust with the change in desires and scarcity
In a mixed economy
economic problems are solved by the government and market
economic decisions are made by the government
economic allocation is achieved by the invisible hand
economic decisions are solved by government departments
Banks earn most of their money by
charging ATM fees
interest on loans granted to customers
checking accounts
interest on savings accounts
Which of these compounding methods will grow your savings balance the quickest
daily compounding
monthly compounding
quarterly compounding
annual compounding
Which of the following will not deduct money from your bank account directly?
an ATM
a credit card
a debit card
a check
The quantity demanded is
the amount of a good that consumers plan to purchase at a particular price
independent of the price of the good
independent of consumers' buying plans
always equal to the equilibrium quantity
The law of demand implies that other things remain the same,
as the demand for cheeseburgers increases, the price of a cheeseburger will fall
as the price of a cheeseburger rises, the quantity of the cheeseburgers demanded will fall
as income increases, the quantity of cheeseburgers demanded will increase
as the price of a cheeseburger rises, the quantity of the cheeseburgers demanded will increase
A substitute is a good
of a higher quality than another good
that is not used in place of another good
that can be used in place of another good
of lower quality than good
People buy more of good 1 when the price of good 2 rises. These goods are
normal goods
complements
substitues
inferior goods
People buy more of good 1 when the price of good 2 falls. These goods are
normal goods
complements
substitutes
inferior goods
A compliment is a good
used with another good
used instead of another good
of lower quality than another good
of higher quality than another good
People come to expect that the price of gasoline will rise next week. As a result,
next week's supply of gasoline decreases
the price of a gallon of gasoline falls today
today's supply of gasoline increases
today's demand of gasoline increases
The demand curve for a normal good shifts leftward if income ____ or the expected future price ____.
decreases; falls
increases; rises
increases; falls
decreases; rises
Why would someone buy a bond instead of a stock?
it is a less risky investment
to have ownership in a company
it can yield a higher rate of return on investment
to receive dividends payment
When do companies pay dividends to a shareholder?
every quarter
every year
when the company turns a profit
whenever the board of directors feel like it
What is a bond?
a certificate of ownership in a corporation, with the right to a share of the earnings
a certificate representing a loan from an investor to a corporation or government entity
a payment from an investor to a corporation for the rights to future profits
a group of stocks sold together for a set price
People buy stocks because...
they expect to earn a return
there is no chance of loss
they are guaranteed interest payments each year
the government encourages them to buy stock
When stockholders sell their stock, who receives the money from the sale?
the corporation
the government
the stockholder
all stockholders that own shares in a corporation
One way people can earn money from stocks is by...
selling the stock for the same price as the price they paid for the stock
buying stock from an investment banker
selling the stock for a lower price than the price they paid for the stock
selling the stock for a higher price than the price they paid for the stock
What is a stock dividend?
the price the stock is sold for
part of a company's profits that is paid to shareholders
a capital gain
the price paid when stock is sold to an investment bank
Diversifying can occur by...
buying similar stocks and bonds in different industries
buying similar stocks and bonds in the same industries
buying different stocks and bonds in the same industries
buying different stocks and bonds in different industries
A stock portfolio is...
the document that you receive for purchasing stock
a list of all the stocks you own
the online tool used to track stock prices
a group of stocks that can purchase at one time on a stock exchange
Why would someone choose to put money in stocks as opposed to a savings account that earns interest?
they are guaranteed a return ina savings account
they are guaranteed a return in stocks
there is a potention to earn more money in the savings account
there is a potention to earn more money in the stock market
What does "IPO" stand for?
initial public offering
investor's private ownership
investing publicly overseas
inside private operations
Visa and MasterCard will allow you to purchase on credit and not charge you any interest as long as you:
limit the amount of cash advance
pay a minimum amount each month
pay the balance owing in full
do not exceed your credit limit
A good credit rating is established by
being a nice person
making your payments on time
making your payments a little past their due date
not making any payments on your credit card
Which of the following is a disadvantage of credit?
impulse buying
emergencies
savings
convenience
An indication of the level of risk that someone would pose if credit were granted to them is called:
failure rate
risk management
liability
credit rating
You can start building a good credit history by
attending school regularly and getting good marks
getting a part-time job
buying a few things on credit and paying the bills promptly
becoming a regular customer at one store
Only making the minimum payment on a credit card every month will:
lower the amount total paid for the purchase
make you independently wealthy
take longer to pay off which will result in paying more interest, more money!
pay off the credit card faster
The cost of credit expressed as a yearly interest rate is known as:
annual percentage rate (APR)
annual fee
penalty APR
introductory rate
What is a good practice when it comes to credit cards?
getting as many credit cards as possible
paying only the minimum payment
charging anything you want
paying the amount charged in full every month
When Bryce attempted to borrow money at the bank, he learned that his credit score is low. Which statement best describes what this is likely to mean for Bryce?
the interest rates on his loan will be lower, since his credit score is low.
the purchase price of the item he needs the loan for will be higher due to his lower credit score.
the monthly loan payments will be lower due to his lower credit score.
the interest rates on his loan will be higher, since his credit score is low.
