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Unit 3 and 4 Economics

Total questions: 68

Worksheet time: 42mins

Name
Class
Date
1.

What is the goal of a firm?

a)

to make profits

b)

to maximize profits

c)

to maximize revenue

d)

none of the above

2.

Which of the following is an example of a perfectly competitive firm?

a)

Farmer's market stand

b)

Fast food restaurant

c)

Cell phone service provider

d)

Local internet service provider

3.

Which of the following is NOT a characteristic of perfectly competitive markets?

a)

Many buyers and sellers

b)

Homogeneous goods

c)

Free entry and exit

d)

Firms set their own prices

4.
Which of the following statements correctly identifies a difference between perfect competition and monopolistic competition? 
a)
In perfect competition there are no barriers to entry, but there are strong barriers in monopolistic competition. 
b)
In perfect competition there are many firms, but in monopolistic competition there are only a few firms. 
c)
In perfect competition the firms all sell products that are exactly the same, but in monopolistic competition each firm sells a slightly differentiated product. 
d)
In perfect competition there are few consumers, but in monopolistic competition there are many consumers. 
5.

In monopolistic competition producers....

a)

have a full ability to set prices

b)

have some ability to set prices

c)

have no ability to set prices

6.

Which one of the following statements is not a characteristic of monopolistic competition?

a)

Ease of entry into the industry

b)

Product differentiation

c)

A relatively large number of sellers

d)

A homogenous product

7.

What type of products will firms produce in monopolistic competition?

a)

Firms produce significantly differentiated products

b)

Firms produce slightly differentiated products

c)

Firms produce homogenous products with one modification

d)

Firms produce a variety of different products

8.

Which of the following best describes an oligopoly?

a)

many monopolistically competitive firms

b)

a few firms sharing monopoly power

c)

a former monopoly that has been broken up by the government

d)

a government-granted franchise or monopoly

9.

One of the requirements for a monopoly is that

a)

products are high priced

b)

there are several close substitutes for the product

c)

there is a unique product with no close substitutes

d)

the product cannot be produced by small firms

10.

A monopoly is a market with

a)

many suppliers

b)

no barriers to entry

c)

many substitutes

d)

one supplier

11.

A barrier to entry is

a)

an economic term for economies of scale

b)

illegal in most markets

c)

anything that prevents new firms from entering the market

d)

a factor that increases competition

12.

Mr. Simpson is liable for all the debts of his company.  He has which type of business organization?

a)

Monopoly

b)

Sole Proprietor

c)

Partnership

d)

Corporation

13.

The fact that an owner is responsible for all losses and debts occurred by a business is known as:

a)

Limited Liability

b)

Limited Debt

c)

Unlimited Liability

d)

Unlimited Debt

14.

Jorge and Fred have a product they would like to sell. They decide to share the risks and profits by forming an unincorporated business. The business organization Jorge and Fred have MOST LIKELY formed is a(n)

a)

Entreprenuership

b)

Sole Proprietor

c)

Partnership

d)

Corporation

15.

A business recognized by law as a separate legal entity having all the rights of an individual.

a)

Sole Proprietor

b)

Partnership

c)

Corporation

d)

Entreprenuership

16.

Business will end when owner dies, quits, or sells the company.

a)

Sole Proprietor

b)

Partnership

c)

Corporation

d)

Enterprenuer

17.

The partnership and all partners are liable when any partner commits a tort while acting within the scope of the firm's business.

a)

true

b)

false

18.
What is a business owned by stockholders/investors but operated by others?
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
19.
Dan has $5,000. He wants to invest his money in the type of business that has the least amount of liability. In which type of business should he invest?
a)
corporation
b)
partnership
c)
proprietorship
20.
What is a company called that sells stock to raise money?
a)
Partnership
b)
Corporation
c)
Sole Proprietorship
d)
Limited Partnership
21.

What is the name of a person who owns part of a corporation?

a)

Stakeholder

b)

Shareholder

c)

Trust Agent

d)

Chairman

22.

What are the four major considerations when choosing a legal structure for your business?

a)

Market, Control, Ownership, Size

b)

Taxation, Liability, Cost, Control

c)

Size, Cost, Ownership, Distribution

d)

None of the Above

23.

What is a co-op?

a)

a company branded off of a franchise

b)

a legal business structure that is owned and governed by and functions for, the benefit who use its services

c)

a franchise

d)

a partnership

24.

Limited Liability means

a)

the corporation pays its own taxes

b)

the company can be sued but the owners only

c)

the company can be sued but the owners only can be sued personally if they act illegally

d)

The shareholders are the only liable party

25.

A business that uses the name, logo and trading systems of an existing successful business.

a)

Franchise

b)

Cooperatives

26.

A certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights.

a)

Share

b)

Shareholder

27.

This type of business is created to provide a service, not to make a profit.

a)

non-Profit

b)

Partnership

c)

Corporation

d)

Sole Proprietorship

28.
What is the main reason people start businesses?
a)
Out of boredom
b)
To pay taxes
c)
Earn a profit
d)
To hire friends
29.

How does the government break up and prevent monopolies?

a)

Increased Taxes

b)

Antitrust legislation and regulation

c)

Deregulation

d)

Laissez-faire

30.

Under pure competition, products are

a)

always cheap

b)

differentiated

c)

accurately priced

d)

identical

31.

An organization of workers dedicated to protecting members' interests and improving wages, hours and working conditions for all.

a)

Labor Union

b)

Workers Rights

c)

Worker Strikes

d)

Collective Bargaining

32.

What was the first nationwide industrial union?

a)

the Knights of Labor

b)

the AFL

c)

the Pinkertons

d)

the Anarchists

33.
What typically happened to individual employees who complained about working conditions?
a)
They were given a pay raise
b)
They were promoted
c)
They were fired
d)
They quit their jobs
34.

Training and experiences is considered

a)

physical capital

b)

human capital

c)

labor

d)

necessary to obtain an unskilled job

35.

What is the price for labor

a)

value

b)

labor productivity

c)

wages

d)

human capital

36.

Wages, just like the other factors of production are governed by

a)

government regulation

b)

supply and demand

c)

labor laws

d)

glass ceiling

37.

(Click all that apply)

The civilian labor force is made up of...

a)

Men and Women at least 16 years old.

b)

Working people

c)

People looking for a job

d)

Institutionalized people

38.

The wage at which the number of workers needed equals the number of workers available.

a)

minimum wage

b)

maximum wage

c)

Fair Standards Act

d)

equilibrium wage

39.

The demand for a product or resource based on its contribution to the final product.

a)

derived demand

b)

equilibrium demand

c)

excessive demand

d)

shortage of demand

40.

Which is not a Characteristic of Money?

a)

Durability

b)

Portability

c)

Divisibility

d)

Invincibility

41.

Which of these are functions of money?

a)

medium of exchange that allows the trade of goods and services

b)

holds value over time

c)

standard of value that allows comparison of the value of goods related to one another

d)

used as the only means of trade between nations

42.

You can easily carry money in a pocket or a purse. This reflects what characteristic of money?

a)

durability

b)

legal tender

c)

divisibility

d)

portability

43.

Which of these are functions of money?

a)

medium of exchange that allows the trade of goods and services

b)

holds value over time

c)

standard of value that allows comparison of the value of goods related to one another

d)

used as the only means of trade between nations

44.

A business or financial institution that stores and manages money for individuals and other businesses:

a)

ATM

b)

Bank

c)

Credit Union

d)

Check Cashing Center

45.

anything that is used to determine value during the exchange of goods and services

a)

medium of exchange

b)

commodity money

c)

fiat money

d)

unit of account

46.

the price paid for the use of borrowed money

a)

interest

b)

principal

c)

unit of account

d)

M2

47.

Why should you diversify your investments?

a)

Investing in a diversified portfolio guarantees that you won’t lose money with your investments

b)

Diversifying your portfolio helps reduce risk

c)

If you diversify your portfolio, you will definitely earn a high return

48.

How is a bond different from stock?

a)

A bond is a loan you give to a organization, while stock is partial ownership in a company.

b)

Bonds are best for earning high returns while stocks are best for providing a stable source of income

c)

Bonds are typically riskier than stocks.

49.

How can someone make money from investing in a stock?

a)

They receive dividends or sell the stock at a higher price than what they paid for it.

b)

They sell the stock for the same price they bought it for.

c)

The stock loses value but the overall market experiences a positive return

50.

How does investing in the stock market differ from putting money in a savings account at a bank?

a)

Investing is always a less risky option than saving

b)

Investing is best for short-term situations like emergency funds; saving is best for the long-term

c)

Investing typically earns between 1-2% while saving generally earns between 5-7%

d)

Investing allows you to accumulate wealth for retirement while saving is best forshort-term purchases or emergencies

51.

Which of the statements below BEST describes the relationship between risk and return when considering an investment?

a)

Investors expect to earn a lower return when they invest in a high risk asset

b)

Investors expect to earn a higher return when they invest in a low risk asset

c)

Investors expect to earn a higher return when they invest in a high risk asset

d)

Investors expect to earn zero return when investing in a low risk asset

52.

_____________ is money by government decree, has no alternative value

a)

Gold standard

b)

Specie

c)

Barter

d)

Fiat money

53.

Coins and paper that are used as money; 'legal tender'.

a)

Money

b)

Transfer Payments

c)

Currency

d)

Liquidity

54.

When you own part of a company, this means you own ________ of that company.

a)

a dividend

b)

a bond

c)

a stock

d)

the soul

55.
What is the stock market?
a)
A type of farmers market where people buy and sell food.
b)
A place where parts of businesses are bought and sold.
c)
A special type of grocery store that sells stocks.
d)
A type of bank that gives out loans to new businesses.
56.
The DOW Jones Industrial Average is an index of 30 American companies.  Why is the DOW Jones Industrial Average important?
a)
It tells Americans how much debt the country is in.
b)
It helps economists predict when a stock market crash will happen.
c)
It tells Americans how many jobs are out there.
d)
It provides a snapshot of how the stock market and the US economy is doing.
57.
The possibility of losing some or all of a particiular investment.
a)
risk
b)
index
c)
industry
d)
profit
58.

The use of assets to create income or profit

a)

investing

b)

trading

c)

saving

d)

loaning

59.

When stock prices in general steadily rise, this kind of market exists

a)

steady market

b)

bear market

c)

strong market

d)

bull market

60.

When stock prices steadily fall or stagnate for a period of time, it is called a

a)

weak market

b)

bear market

c)

flat market

d)

bull market

61.
Buying stocks is a sure way to make money.
a)
True
b)
False
62.
What is a dividend?
a)
Typically paid out each quarter, dividends are basically your share of the company’s profits
b)
A grandchild.
c)
A symbol that looks like a dot on either side of a dash.
d)
Something you use to hold books up on a shelf.
63.
What is a Company Symbol?
a)
A mascot to be recognized at a sport game
b)
A 2-4 letter code used to identify a company stock is random and 
c)
The musical instrument that creates a crash
d)
Someone wg=ho does their job really well and becomes the person everyone looks up to.
64.
A company owned by families or a small number of investors and do not issue stock to the public.
a)
public company
b)
industry
c)
private company
d)
portfolio
65.
Why does a company issue stock?
a)
to brag about their profits
b)
to attract money
c)
to gain publicity
d)
because it is required by law
66.

What is a savings certificate with a fixed maturity date and specified fixed interest rate?

a)

Credit

b)

Savings Tools

c)

Certificate of Deposit

d)

Money

67.

What is a non profit financial cooperative owned by its members that provides credit and other financial services?

a)

Schools

b)

Credit Unions

c)

Banks

d)

Insurance

68.

There are 4 common types of savings tools, ordered from lowest to highest by interest rates. A. checking accounts, savings accounts, money market deposit accounts, and certificates of deposit

a)

Checking,Savings,Money Market,CD

b)

Checking,Savings,CD,Money Market

c)

Savings,Checking,Money Market,CD

d)

Savings,Money Market,Checking,CD

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