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WorksheetsEconomics Final Exam Review
Total questions: 50
Worksheet time: 25mins
Any resources that are made by humans and used to create other goods and services are called
services.
production.
capital.
labor.
An example of a shortage is limited amounts of
water available for irrigating a crop because it is used for other crops.
labor available because the workers have other jobs.
food available because the trucks carrying it are on strike.
food available because few people want to buy it.
The resources used to make all goods and services are the
production possibilities.
factors of production.
production trade-offs.
opportunity costs.
Why are all goods and services scarce?
Some goods cost more than others.
All resources are scarce.
Some things are needs and others are wants.
Some people want to have more goods than others.
What is a factory building an example of?
human capital
physical capital
an economic trade-off
technology
How would you describe an economy that uses its resources to make the greatest possible number of goods and services?
efficient
using opportunity cost well
globally aware
underutilized
Which of the following makes someone an entrepreneur?
earning a lot of money as a computer programmer
becoming a highly paid dancer
running a service that hires people to install sprinkler systems in lawns
inventing and selling the rights to manufacture a computer game
You bought two new CDs with the last $30 in your checking account, and your next payday is on Monday. What is the opportunity cost of these CDs?
the difference between the cost to produce the CDs and the price you paid for them
$30
dinner and a movie with your friends this Saturday night
knowing you are the first of your friends to have these CDs
Which of the following lists would an economist consider to be land?
factories, office buildings, assembly lines, workers
farm fields, tractors, pesticides, fertilizers
dams, bridges, rock quarries, oil wells
iron ore, natural gas, fertile soil, water
Which of the following is an example of scarcity, rather than shortage?
A popular toy is sold out during the busy holiday season.
You have spent your last penny and payday is a week away.
A person wants an endless supply of everything but cannot have it.
Gasoline was rationed in America during World War II.
Which of the following is NOT characteristic of a centrally planned economy?
The central government owns all land and capital.
The central government makes all economic decisions.
Each collective or factory sets its own goals.
Each person is assigned a job.
What is the struggle among various producers for the consumer’s business called?
socialism
competition
incentive
self-regulation
Why does even a free market economy need some government intervention?
to provide for things that the marketplace does not address
to ensure that the government has the freedom to tax as necessary
to make sure that the government can fulfill its needs for military personnel
so that the government has some control over factor resources
Which of the following is NOT a key economic question?
What goods and services should be produced?
How should these goods and services be produced?
Who consumes these goods and services?
How should it be ensured that goods and services are paid for?
What does the process of specialization do for an economy?
It eliminates unemployment.
It makes it more efficient.
It fosters competition.
It makes it easier to control.
What incentive motivates a manufacturer to sell a product?
making profits on sales
putting others out of business
pleasing the consumer
popularity of the product
Which of the following is characteristic of a traditional economy?
Communities tend to be fast-growing.
They are usually based on light industrial production.
They have a high standard of living.
Children tend to have the same jobs as their parents did.
What is the product market?
the market in which payments are received for selling products to consumers
the market in which income is received for supplying land, labor, or capital
the market in which firms purchase the factors of production from households
the market in which households purchase the goods and services that firms produce
What is an important advantage of a free market?
It does not change unless the government directs it.
It offers a wide variety of goods and services.
It is easy to regulate.
It protects the less fortunate.
Suppose there is a family in which all the boys are expected to become farmers when they are adults, just as their fathers and grandfathers did. In which kind of economy do they participate?
false economy
command economy
traditional economy
centrally planned economy
What is the most effective way for consumers to make their desires known to businesses?
through mail and phone surveys
by protesting and boycotting products
by the purchases they make
by hiring lobbyists and joining consumer groups
Why does the government use its powers to make sure that businesses disclose so much information to the public?
to make buyers more knowledgeable and safer
to make it hard for businesses to make an excess profit
to make it easier for consumers to save money
to make it easy for businesses to have good information
What is the difference between a business cycle and the day-to-day ups and downs of the market?
The day-to-day ups and downs of the market can be much more extreme than a business cycle.
The day-to-day fluctuations are more likely to have an impact on people’s finances.
A business cycle is usually more restricted, whereas market fluctuations are worldwide.
A business cycle is a major, prolonged fluctuation rather than a day-to-day movement.
Which of the following is NOT an example of a public good?
shopping malls
national parks
highways
municipal libraries
What is the term for the total value of all goods and services produced in a particular economy?
net worth
open market value
gross domestic product
standard of living
Why is legal equality important to the free enterprise system?
Ensuring that all businesses have the same legal rights will create healthy competition in the marketplace.
Requiring all lawyers to obtain the same education will ensure that all business clients receive competent legal representation.
Protecting legal equality makes sure that all people may decide what legal agreements they want to enter into.
Guaranteeing all people the same legal rights will maximize the use of human capital.
You read an article in a news magazine that explains how the economy expanded for several years, then went into a period of contraction. What was the subject of this article?
the gross domestic product
microeconomics
the business cycle
voluntary exchange
When a consumer is able and willing to buy a good or service, he or she creates which of the following?
consumption
demand
elasticity
allocation
What determines the price and the quantity produced of most goods?
the consumer’s perception of necessity
the interaction of supply and demand
the availability of substitutes for the goods
the quality of the goods that are produced
What shows the quantities of products demanded at each price by all consumers in a market?
an elasticity and consumption list
a schedule of consumer prices
a market pricing list
a market demand schedule
What is a basic principle of the law of demand?
The higher the price, the more people will want the good.
Everyone has a limited income that they will spend.
When a good’s price is lower, people will buy more of it.
Services are of interest in the same way that goods are.
When prices rise, which of the following happens to income?
It goes down.
It buys less.
It rises to meet prices.
It is used to buy different things.
Which of the following events could cause the demand curve for sports magazines to shift to the right?
The publisher cuts the price of an issue from $3.95 to $2.50.
The price of an issue of a popular computer game magazine rises from $2.95 to $3.95.
A star basketball player interests thousands of people in professional sports for the first time.
A local library buys a subscription to the sports magazine for its reading room.
Which of these events could permanently shift a individual’s demand curve for umbrellas to the right?
He buys a car so he no longer needs to walk to and wait at a bus stop every morning to get to work.
He moves from a desert community to a rainy city by the ocean.
The price of umbrellas decreases significantly as inexpensive umbrellas are imported from China.
Weather forecasters predict that a major hurricane will hit his city the following week.
Which of the following is an example of lower production costs brought about by the use of technology?
the delivery costs of gasoline to the consumer by diesel trucks
the use of e-mail to replace slower surface mail
the making of breads and pastries in local shops rather than large bakeries
the importing of fresh vegetables from South America rather than using canned vegetables
When the selling price of a good goes up, what is the relationship to the quantity supplied?
The cost of production goes down.
The profit made on each item goes down.
It becomes practical to produce more goods.
There is no relationship between the two.
Which of the following is an example of representative money?
a fur coat
diamonds
gold earrings
an IOU note
What is the purpose of the Federal Deposit Insurance Corporation (FDIC)?
to make sure that banks do not fail
to make sure that customers do not lose money if a bank fails
to make sure that banks charge a fair amount of interest on loans
to make sure that the government has enough gold to cover its expenses
What is a mortgage used to purchase?
car
real estate
college tuition
business expenses
Why is using coins as money easier than using gold bars?
coins are more durable
coins are more portable
coins are more uniform
coins are more limited in supply
What happens when you make a purchase using a credit card?
The credit card issuer pays the store.
The money is immediately deducted from your account.
The amount of the purchase is deducted from a prepaid account.
The place where you made the purchase receives the money within 24 hours.
You need a new computer, and you will need a loan in order to buy one. Which lender is most likely to charge you the highest interest rate on your loan?
savings and loan association
savings bank
credit union
finance company
When you pay for a new CD with a debit card, you authorize the transfer of money from your account to the music store’s account. In other words, a payment by debit card is the electronic form of a payment by
money order.
credit card.
check
cashier’s check.
Which of the following statements is true?
Money is a medium of exchange.
Money is a unit of account.
Money serves as a store of value.
all of the above
Why is representative money more useful than commodity money?
Representative money can be used for other things besides currency. For example, gems can be made into jewelry, and cotton can be made into clothing.
Representative money has value because the government has decreed that it is an acceptable means to pay debts. Commodity money had value only to people who believed it had value.
Representative money exists in unlimited supply, allowing many more people to make use of it.
Representative money is portable, durable, divisible, and acceptable. It can also be exchanged for something else of value.
Erin borrowed $18,000 to buy a car. Her loan will be paid off in 5 years. By the time that she pays off the loan, she will have made $20,327 in payments. Why did she have to pay $2,327 more than the price of the car?
She had to pay interest of $2,327 for the privilege of borrowing the principal of $18,000.
She had to pay principal of $2,327 for the privilege of borrowing the mortgage of $18,000.
She had to pay a default of $2,327 for the privilege of borrowing the principal of $18,000.
.
She had to pay interest of $2,327 for the privilege of borrowing the creditor of $18,000.
Products that would be used in calculating GDP include
toys manufactured in China at a factory owned by a U.S. company.
cars manufactured in Tennessee at a factory owned by a Japanese automobile company.
plastic manufactured in a factory in Kentucky and sold to toy manufacturers around the world to make plastic toys.
cotton cloth manufactured in India and sold to clothes makers in the United States.
An example of a durable good would be
a used car.
a paperback book.
a box of cereal.
a pack of baseball cards.
An example of a nondurable good is
a new car.
a used car.
a paperback book.
a washing machine.
The amount of money a person has left of his or her income after taxes is called
aggregate income.
personal income.
national income.
disposable personal income.
