WorksheetsECON Finals Review #2
Total questions: 110
Worksheet time: 1hrs 8mins
Which of the following accurately describes the economic principle of TINSTAAFL?
Nothing in life can really be paid for in anything except concrete currency like gold or silver
Nothing in life is truly free because money is an abstract construct
Nothing in life is truly free because someone, somewhere down the line has paid for it
Everything in life is actually free because currency is an abstract construct
Which of the following is NOT one of the three basic economic questions?
What to Produce
When to produce it
How to Produce it
For Whom to produce it
Which factor of production is the gifts of nature that are not produced by man, but are needed to produce the things?
Land
Labor
Capital
Entrepreneurs
Which factor of production is the money or the manmade items needed to produce the things?
Land
Labor
Capital
Entrepreneurs
Which factor of production is the people, with all their efforts and abilities, needed to produce the things?
Land
Labor
Capital
Entrepreneurs
Which factor of production is the risk takers who have a new idea to make a new thing to sell?
Land
Labor
Capital
Entrepreneurs
What is a market economy?
Economic system in which supply, demand, and the price system help people make economic decisions
An economic system with a central authority that makes the major economic decisions
An economic system in which the allocation of scarce resources and other economic activities are based on ritual, habit, or custom
An economic system that has some combination of command, traditional, and market economies
What does a PPF Curve represent?
The min. combinations of goods and services an economy can produce when resources aren't used
The max. combinations of goods and services an economy can produce when all resources are used
All the quantities of an item people are willing and able to buy at various prices
All the quantities people are motivated to make at various prices
Which of the following are metrics we use to determine the success of a country's economic system? (check all that apply)
Economic Freedom
Economic Equity
Price Stability
Economic Efficiency
Which of the following is NOT a metric that we use to analyze a country's economy?
Full Employment
Economic Security
Economic Enhancement
Economic Growth
Which of the following best describes a Corporation?
A business owned and operated by one person
A business owned and operated by two or more people
A business owned by shareholders and operated by a board of directors
A business that runs like a corporation but doesn't sell stock or work for a profit
Which of the following best describes a sole proprietorship?
A business owned and operated by one person
A business owned and operated by two or more people
A business owned by shareholders and operated by a board of directors
A business that runs like a corporation but doesn't sell stock or work for a profit
Which of the following best describes a partnership?
A business owned and operated by one person
A business owned and operated by two or more people
A business owned by shareholders and operated by a board of directors
A business that runs like a corporation but doesn't sell stock or work for a profit
Which of the following best describes a nonprofit organization?
A business owned and operated by one person
A business owned and operated by two or more people
A business owned by shareholders and operated by a board of directors
A business that runs like a corporation but doesn't sell stock or work for a profit
Which of the following business structures is taxed only once? (check all that apply)
Sole Proprietorship
Partnership
Corporation
Nonprofit Corporation
Which of the following business structures is taxed twice? (check all that apply)
Sole Proprietorship
Partnership
Corporation
Nonprofit Corporation
Which of the following business structures is not taxed at all? (check all that apply)
Sole Proprietorship
Partnership
Corporation
Nonprofit Corporation
What do you get when you do the following calculation?:
Revenue - Expenses - Depreciation =
Net Income
Depreciation
Taxable Income
Cash Flow
What do you get when you do the following calculation?:
Revenue - Expenses - Depreciation + Depreciation =
Net Income
Depreciation
Taxable Income
Cash Flow
If a business prices its items at $1.00, a competing business would have to price its items at _______ in order to compete.
More than $1.00
$1.00 or less
At least $2.00
You would not be able to compete with such a business
What can cause a change in supply? (Check all that apply)
Subsides and Taxes
Supplier Expectations
Technology
Price
What can cause a change in quantity supplied? (Check all that apply)
Subsides and Taxes
Supplier Expectations
Technology
Price
Which of the following can cause a change in demand? (Check all that apply)
Price
Consumer Income
Consumer Tastes
Number of Consumers
Which of the following can cause a change in quantity demanded? (Check all that apply)
Price
Consumer Income
Consumer Tastes
Number of Consumers
What factors affect demand elasticity? (check all that apply)
Whether it takes up a large portion of income
Whether there are adequate substitutes available
Whether the purchase can be delayed
Whether the business can react quickly to a change in price
What factors affect supply elasticity? (check all that apply)
Whether it takes up a large portion of income
Whether there are adequate substitutes available
Whether the purchase can be delayed
Whether the business can react quickly to a change in price
Luxury items like TVs, diamonds, and designer clothing and shoes have which kind of demand?
Elastic
Inelastic
Necessary items like medicines, gasoline, and table salt have which kind of demand?
Elastic
Inelastic
A big corporation with many employees has which kind of supply?
Elastic
Inelastic
A small, sole proprietorship run by one person has which kind of supply?
Elastic
Inelastic
Two companies that produce the same thing coming together to produce more of that thing is called...
Vertical Merger
Advantageous Merger
Horizontal Merger
Diagonal Merger
Two companies that make different products that come together to make one product is called...
Vertical Merger
Advantageous Merger
Horizontal Merger
Diagonal Merger
When supply exceeds demand, you have a...
Surplus
Shortage
Price Ceiling
Price Floor
What happens when Demand exceeds Supply?
Surplus
Shortage
Price Ceiling
Price Floor
A price ceiling is...
When the government sets a maximum legal price for something
When the government sets a minimum legal price for something
The point where supply and demand intersect - the market clearing price
The point where price is maxed out, but demand would be 0
What does a price ceiling usually cause?
A shortage, since demand exceeds supply
A surplus, since supply exceeds demand
No change in supply or demand
Equilibrium Price
Which of the following is a vertical merger? (check all that apply)
JP Morgan and Chase banks coming together
Ikea buying European tree farms
Disney buying Pixar
Facebook buying Instagram
Which of the following is a horizontal merger? (check all that apply)
JP Morgan and Chase banks coming together
Ikea buying European tree farms
Disney buying Pixar
Facebook buying Instagram
What can cause a change in price? (check all that apply)
A change in supply
A change in Demand
A change in Both
None of these
If a change in supply is relatively LARGER than a change in price, that item's supply is...
Elastic
Inelastic
Unit Elastic
Neither Elastic nor inelastic
What is the struggle among sellers to attract consumers?
Elasticity
ComEd
Commerce
Competition
A measure of responsiveness that tells us how quantity demanded or supplied responds to a change in price
Scarcity
Demand
Elasticity
Competition
What is a mixed or modified free enterprise economy?
An economy where people carry on their economic affairs freely with some gov't intervention
An economy where a central authority makes most of the major economic decisions
An economy in which private citizens own and use the factors of production in order to generate profits
An economy in which government owns some factors of production and has a role in determining what and how goods are produced
What is a socialist economy? (socialism)
An economy where people carry on their economic affairs freely with some gov't intervention
An economy where a central authority makes most of the major economic decisions
An economy in which private citizens own and use the factors of production in order to generate profits
An economy in which government owns some factors of production and has a role in determining what and how goods are produced
What is a capitalist economy? (Capitalism)
An economy where people carry on their economic affairs freely with some gov't intervention
An economy where a central authority makes most of the major economic decisions
An economy in which private citizens own and use the factors of production in order to generate profits
An economy in which government owns some factors of production and has a role in determining what and how goods are produced
What is a Command Economy?
An economy where people carry on their economic affairs freely with some gov't intervention
An economy where a central authority makes most of the major economic decisions
An economy in which private citizens own and use the factors of production in order to generate profits
An economy in which government owns some factors of production and has a role in determining what and how goods are produced
What is opportunity cost?
The cost of the next best alternative use of money, time, or resources when one choice is made rather than another
The ability or capacity of a good or service to be useful and give satisfaction
Broad category of fixed costs that includes rent, interest, taxes, and executive salaries
The production level where total cost equals total revenue - the production needed to recover costs
What is Overhead?
The cost of the next best alternative use of money, time, or resources when one choice is made rather than another
The ability or capacity of a good or service to be useful and give satisfaction
Broad category of fixed costs that includes rent, interest, taxes, and executive salaries
The production level where total cost equals total revenue - the production needed to recover costs
What is utility?
The cost of the next best alternative use of money, time, or resources when one choice is made rather than another
The ability or capacity of a good or service to be useful and give satisfaction
Broad category of fixed costs that includes rent, interest, taxes, and executive salaries
The production level where total cost equals total revenue - the production needed to recover costs
What is Diminishing Marginal Utility
Decrease in satisfaction or usefulness as additional units of a product are required
Branch of economic theory that deals with behavior and decision making by small units such as individuals and firms
Mutual dependence of one person's, firm's or region's economic activities on another
Tool, equipment, or other manufactured good used to produce other goods and services; a factor of production
What is Microeconomics
Decrease in satisfaction or usefulness as additional units of a product are required
Branch of economic theory that deals with behavior and decision making by small units such as individuals and firms
Mutual dependence of one person's, firm's or region's economic activities on another
Tool, equipment, or other manufactured good used to produce other goods and services; a factor of production
Which of the following is communism?
Economic and political system in which factors of production are collectively owned and directed by the state
Money that stays in the firm rather than being paid to someone else
Check paid to stockholders, usually quarterly, representing a portion of corporate profits
Economic institution that operates like a business but does not seek financial gain: schools, churches, etc.
Which of the following is a noncash charge?
Economic and political system in which factors of production are collectively owned and directed by the state
Money that stays in the firm rather than being paid to someone else
Check paid to stockholders, usually quarterly, representing a portion of corporate profits
Economic institution that operates like a business but does not seek financial gain: schools, churches, etc.
Which of the following is a nonprofit organization?
Economic and political system in which factors of production are collectively owned and directed by the state
Money that stays in the firm rather than being paid to someone else
Check paid to stockholders, usually quarterly, representing a portion of corporate profits
Economic institution that operates like a business but does not seek financial gain: schools, churches, etc.
The combination of desire, willingness, and ability to buy a product
Demand
Supply
Dividend
Scarcity
A price floor is...
When the government sets a maximum legal price for something
When the government sets a minimum legal price for something
The point where supply and demand intersect - the market clearing price
The point where price is maxed out, but demand would be 0
What does a price floor usually cause?
A shortage, since demand exceeds supply
A surplus, since supply exceeds demand
No change in supply or demand
Equilibrium Price
A real world example of a price ceiling is...
Rent Controls
Minimum Wage
Gas Prices in the USA
Television Prices
A real world example of a price floor is...
Rent Controls
Minimum Wage
Gas Prices in the USA
Television Prices
If a change in supply is relatively SMALLER than a change in price, that item's supply is...
Elastic
Inelastic
Unit Elastic
Neither Elastic nor inelastic
If a change in DEMAND is relatively SMALLER than a change in price, that item's DEMAND is...
Elastic
Inelastic
Unit Elastic
Neither Elastic nor inelastic
If a change in DEMAND is relatively LARGER than a change in price, that item's DEMAND is...
Elastic
Inelastic
Unit Elastic
Neither Elastic nor inelastic
Why do economies use a price system? (Select all that apply)
Prices are neutral
Prices are flexible
Prices are familiar
Prices ensure everyone has an equal amount
Which of the following is a natural monopoly?
When the costs of production are minimized by having a single firm produce (El trains)
When there is only one seller of something in a geographic area (One pharmacy in a small town)
When only one firm owns the right to a method, process or other scientific advance (EpiPens)
When an industry is entirely owned by the government (Local water utilities)
Which of the following is a Government monopoly?
When the costs of production are minimized by having a single firm produce (El trains)
When there is only one seller of something in a geographic area (One pharmacy in a small town)
When only one firm owns the right to a method, process or other scientific advance (EpiPens)
When an industry is entirely owned by the government (Local water utilities)
Which of the following is a Technological Monopoly?
When the costs of production are minimized by having a single firm produce (El trains)
When there is only one seller of something in a geographic area (One pharmacy in a small town)
When only one firm owns the right to a method, process or other scientific advance (EpiPens)
When an industry is entirely owned by the government (Local water utilities)
Which of the following is a Geographic Monopoly?
When the costs of production are minimized by having a single firm produce (El trains)
When there is only one seller of something in a geographic area (One pharmacy in a small town)
When only one firm owns the right to a method, process or other scientific advance (EpiPens)
When an industry is entirely owned by the government (Local water utilities)
Which of the following is a necessary condition for perfect competition? (Select all that apply)
Large number of buyers and sellers
Each buyer and seller acts independently
Buyers and sellers deal in identical products
Buyers and sellers are reasonably well-informed
Which of the following is NOT a condition of perfect competition?
Each buyer and seller acts independently
Buyers and sellers deal in slightly different but similar products
Buyers and sellers are free to enter into, conduct, and leave business
Buyers and sellers are reasonably well-informed
How do prices stay low in perfect competition?
Buyers and sellers are reasonably well-informed
Buyers and sellers deal in identical products
Buyers and sellers can freely leave business if it's no longer profitable
All of these
What is a product market?
Productive resources that make up the four categories of land, labor, capital, and entrepreneurs
A market where productive resources are bought and sold (land, labor, capital)
A market where goods and services are bought
A social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources
What is a factor market?
Productive resources that make up the four categories of land, labor, capital, and entrepreneurs
A market where productive resources are bought and sold (land, labor, capital)
A market where goods and services are bought
A social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources
What is economics?
Productive resources that make up the four categories of land, labor, capital, and entrepreneurs
A market where productive resources are bought and sold (land, labor, capital)
A market where goods and services are bought
A social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources
What are the factors of production?
Productive resources that make up the four categories of land, labor, capital, and entrepreneurs
A market where productive resources are bought and sold (land, labor, capital)
A market where goods and services are bought
A social science dealing with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources
What is an economic system in which the allocation of resources is the result of ritual, habit, or custom?
Traditional Economy
Vertical Merger
Horizontal Merger
Depreciation
What is the combination of two or more firms producing the same kind of product?
Traditional Economy
Vertical Merger
Horizontal Merger
Depreciation
What is gradual wear on capital goods?
Traditional Economy
Vertical Merger
Horizontal Merger
Depreciation
What is a combination of firms involved in different steps of manufacturing or marketing?
Traditional Economy
Vertical Merger
Horizontal Merger
Depreciation
What is the profit maximizing quantity of output?
A government payment to encourage or protect a certain economic activity
The level of production where marginal cost equals marginal revenue
The extra cost of producing one additional unit of production
The extra output due to the addition of one more unit of output
What is a subsidy?
A government payment to encourage or protect a certain economic activity
The level of production where marginal cost equals marginal revenue
The extra cost of producing one additional unit of production
The extra output due to the addition of one more unit of output
What is marginal product?
A government payment to encourage or protect a certain economic activity
The level of production where marginal cost equals marginal revenue
The extra cost of producing one additional unit of production
The extra output due to the addition of one more unit of output
What is marginal cost?
A government payment to encourage or protect a certain economic activity
The level of production where marginal cost equals marginal revenue
The extra cost of producing one additional unit of production
The extra output due to the addition of one more unit of output
Products that increase the use of other products; products related in such a way that an increase in the price of one decreases demand for both are...
Supply
Substitutes
Complements
Equilibrium Price
The price where quantity supplied equals quantity demanded - the price that clears the market is...
Supply
Substitutes
Complements
Equilibrium Price
Competing products that can be used in place of one another; products related in such a way that an increase in the price of one increases the demand for the other are...
Supply
Substitutes
Complements
Equilibrium Price
The amount of a product offered for sale at all possible prices in a market is...
Supply
Substitutes
Complements
Equilibrium Price
The philosophy that government should not interfere with business activity is...
Noncash Charge
Economics
Laissez Faire
Depreciation
Economics can be described as the study of
Money
Choices
graphing
price ceilings and price floors
The act of taking a risk and starting a business is called ______
Capital
Entrepreneurship
labor
Land
What you give up when you choose one thing over another is called ______.
Capital
Demand
Opportunity Cost
Supply
In which type of economic system do people choose what goods to make based on custom?
Command economy
Mixed economy
Market economy
Traditional economy
In which of the following economic systems do individuals make all the choices about what to make, buy, and sell?
Command economy
Traditional economy
Market economy
Mixed economy
When inflation happens, ______.
The prices of goods go down
The value of money goes up
The prices of goods go up
The cost of living decreases
The condition of scarcity can be described as one that
afflicts only poor people and nations
exists when our unlimited needs/wants exceed our limited resources
exists when our limited resources exceed our unlimited needs/wants
only applies to luxury items
The 4 Factors of Production (FOP) are
rent for land, wages for labor, profit for capital, interest for entrepreneurship
land, labor, capital, entrepreneurship
land, labor, physical capital, financial capital
land, labor, resources, profits
The crops and animals on a farm are examples of which factor of production?
Land
Labor
Capital
Entrepreneurship
One business having all the market with no competition?
Standard of Living
Monopoly
Scarcity
Profit
Abe want his radio fixed. That is a ________
Demand
Service
Supplies
Labor force
John fixes radios. That is a________
Supply & Demand
Supplies
Service
Labor Force
Abe pays john to fix his Radio. This is an example of _______.
Service
Supply and Demand
Labor Force
Demand
True or false: In a command economy, all decisions are made by the government.
True
False
The point where the supply and demand curves meet is the _____________ price.
equilibrium
correct
balanced
stable
The New York Stock Exchange is an example of __________.
a corporation
an investor
a share
the Stock Market
What is gross income?
The amount of money you can budget
The money taken out of your pay (ie. taxes)
Your take home pay. Gross income minus deductions
The amount of money you make before deductions
What is net income?
The amount of money you can budget
The money taken out of your pay (ie. taxes)
Your take home pay. Gross income minus deductions
The amount of money you make before deductions
This is the fundamental law that asserts when prices increase so too does the amount produced.
Law of Supply
Demand
Economics
Wealth of Nations
Capitalism promotes competition with other products and businesses.
True
False
Socialism distributes goods to each individual's needs.
True
False
