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WorksheetsEcon Review
Total questions: 40
Worksheet time: 43mins
In a free market society, the answer to the question about how much to produce is determined by
census data
profit projections
consumer demand
government quotes
Which of the following represents capital needed to start a tailoring or garment making business?
Dressmakers
Building space
Marketing team
Sewing machines
●Few sellers
● Some control over price
● High market entry barriers
● Some product differentiation
What type of market structure is described by the information above?
Oligopoly
Natural monopoly
Pure competition
Monopolistic competition
The market structure of pure competition is distinctive because
only one seller is needed in this market structure
there are no examples of this type of market structure
the sellers in this market structure have no control over price
there are large number of barriers to entry into this market structure
Which characteristic of the U.S. free enterprise system creates the incentive to work, save, and invest?
Social Security system
Voluntary exchanges
Private property ownership
Consumer sovereignty
One result of competition in a free enterprise system is
fewer consumer choices
lower prices for products
steady wages and incomes
improved safety conditions
One of the benefits of the U.S. free enterprise system is the
amount of choices for consumers
guaranteed returns on investments
lack of union participation by workers
equal distribution of goods and services
Which of the following is most characteristic of the U.S. free enterprise system?
Government price controls
Nationalization of energy companies
Markets that respond to consumer demand
Public ownership of the factors of production
An expansionary period in the business cycle is distinguished by
high inflation
declining sales
fewer excise taxes
low unemployment
High levels of unemployment combined with high levels of inflation could indicate that the business cycle has entered into a period of
recession
stagflation
expansion
investment
In the U.S. free enterprise system one of the primary roles of the government is to
employ a majority of the workforce
guarantee that investors profits are secure
ensure the safety of products through regulation
provide new sources of funding for technology start ups
The Federal Reserve Act of 1913 created a banking system in the United States with the responsibility of —
collecting of federal income taxes
managing of interstate commerce
enforcing of the Sherman Anti-trust legislation
regulating of monetary policy in the United States
Which of the following type of tax is collected by state and local governments but not by the federal government?
Tariffs
Sales tax
Excise tax
Income tax
With a given amount of resources, a country with a comparative advantage will produce a product with
decreased demand
lower opportunity costs
cheaper natural resources
higher quality specifications
Which of the following accounts for why countries specialize in particular trade products?
Unequal distribution of resources
Government regulations
Variety in the types of economic systems
Variation in the size of markets
One of the primary functions of financial institutions in an economy is to
offer incentives to businesses for investing
prepare taxes for individuals and businesses
create investment portfolios for venture capitalists
provide access to financial capital for people and businesses
One of the benefits of home ownership includes
paying property taxes
funding large capital outlays
purchasing insurance
building equity
A long-term cost of owning a home includes
income taxes
buying furniture
landscaping upkeep
insurance payments
One cost consideration made when purchasing personal property, such as a car would be
asset value of the property
maintenance of the property
time spent viewing the property
potential co-owners of the property
Recently the price of a popular perfume has increased by $10. How will the price change likely affect the quantity demanded and supplied in the short run?
Supply will stay the same, and quantity demanded will increase.
Quantity supplied will decrease, and quantity demanded will increase.
Quantity supplied will increase, and quantity demanded will decrease.
Quantity supplied will increase, and demand will stay the same.
Which of the following is a basic characteristic of all economic systems?
Price controls
Wage incentives
Small business owners
Distribution of goods and services
-One seller
-Complete barriers to market entry
-No production differentiation
Which of the following is described by the characteristics listed above?
oligopoly
monopoly
pure competition
monopolistic competiton
The basic idea of choice presents which of the problems in economics?
Choice is a way of life.
Decisions produce costs.
Businesses can sell what they want.
People get to decide what they want.
Dell Software today announced the release of a fully localized Simplified Chinese version of Toad for Oracle. The new release marks the latest milestone for Dell Software’s flagship database development and management solution.
—Press release, Dell, July 2014 www.dell.com (accessed July 24, 2014)
What basic economic question is addressed in the press release?
C
D
How much to produce?
For whom to produce?
How to produce?
What to produce?
In what way does the event of the headline affect the circular flow model?
Expenditures for households would decrease, but not for firms.
Government expenditures and incomes would be offset.
Firms and households would incur higher expenditures.
Incomes for households and firms would increase.
Which of the following best completes the diagram?
Characteristics of Partnerships
Characteristics of Corporations
Characteristics of Free Enterprise
Characteristics of Sole Proprietorships
The U.S. government was given the authority to collect income taxes with the passage of the —
Fourteenth Amendment
Sherman Anti-trust Act
Sixteenth Amendment
Dodd-Frank Act
As soon as practicable, the Secretary of the Treasury, the Secretary of Agriculture and the Comptroller of the Currency, acting as "The Reserve Bank Organization Committee," shall designate not less than eight nor more than twelve cities to be known as Federal reserve cities, and shall divide the continental United States, excluding Alaska, into districts, each district to contain only one of such Federal reserve cities. The determination of said organization committee shall not be subject to review except by the Board of Governors of the Federal Reserve System when organized: Provided, That the districts shall be apportioned with due regard to the convenience and customary course of business and shall not necessarily be coterminous with any State or States. The districts thus created may be readjusted and new districts may from time to time be created by the Board of Governors of the Federal Reserve System, not to exceed twelve in all. Such districts shall be known as Federal reserve districts and may be designated by number.
—Federal Reserve Act, 1913
The Federal Reserve System designed in the manner described above resulted in the creation of—
a decentralized system of banks
new methods for printing money
reserve bank satellite locations
one large depository for U.S. currency
Which of the following accurately completes the graphic?
Types of money
Functions of money
Characteristics of money
Federal Reserve notes
The introduction of new manufacturing technologies generally affects economic growth by —
creating safer work environments
increasing the productivity of labor
restricting growth because of the additional expense
stopping production while workers learn the new technology
Recently, the government announced that it would discontinue the production of a particular military aircraft. How will this decision affect the circular flow model?
There will be an increase in unemployment resulting in the creation of new types of jobs.
There will be a shift of government spending to the production of alternative products.
There will be a reduction in the income of households resulting in reduced purchasing power.
There will be an increase in the product market because aircraft makers will be more efficient.
Which scenario is an example of how resource markets can affect the price of consumer goods?
An online store raises the price of a popular item.
A state government raises the sales tax on clothing.
Miguel buys the ingredients for his dinner in a grocery store.
Orange juice prices increase after a natural disaster destroys farmland.
One way the Federal Reserve can counter unemployment and stimulate spending is by —
selling securities
decreasing the discount rate
tightening monetary policies
increasing the reserve requirement
What is the relationship between scarcity and decision making in economics?
Consumers are more likely to choose goods and services that are scarce.
When certain goods are scarce it complicates decision making.
Individuals must choose how to use scarce resources to satisfy their wants.
When resources are scarce the government will prioritize certain goods to influence decision making.
One advantage to using a debit card is that it allows the user to —
build a strong credit score
repay credit card debts faster
access currency without carrying cash
purchase goods without having any money
The introduction of new manufacturing technologies generally affects economic growth by —
creating safer work environments
increasing the productivity of labor
restricting growth because of the additional expense
stopping production while workers learn the new technology
What is the relationship between scarcity and decision making in economics?
Consumers are more likely to choose goods and services that are scarce.
When certain goods are scarce it complicates decision making.
Individuals must choose how to use scarce resources to satisfy their wants.
When resources are scarce the government will prioritize certain goods to influence decision making.
The production possibility curve (PPC) shows the productive capacity of a country that produces only cars and apples.
What does point A on the PPC represent?
The country is lacking in resources.
The country is using its resources effectively.
The country is producing more cars than apples.
The country is producing more than allocative efficiency.
What MOST LIKELY caused the difference between quantity supplied and quantity demanded as indicated by the line P1 in the market graph above?
A large department store discounted the price of clothing.
the cost of cotton used to produce the shirts increased.
A popular fashion magazine announced that dress shirts are the latest trend.
The government introduced a price floor to protect clothing firms from foreign competition.
Loans that are obtained by offering an asset to guarantee repayment of the loan are considered —
default loans
secured loans
unsecured loans
repossession loans
