WorksheetsFinal Exam
Total questions: 50
Worksheet time: 25mins
Name
Class
Date
1.
Jack is about to graduate from high school. His parents have saved $45,000 for him. They plan on giving it to him after graduation. Jack has to decide what to do with the money and is torn between buying a new car or paying for college. which option reflects Jack engaging in a rational decision-making process?
a)
He impulsively decides to pay for half of college and spend the rest on a new car.
b)
He immediately goes out to buy a new car.
c)
He does not know what to do with the money so he puts it in the bank.
d)
He thinks about the two alternative options, decides what is most important to him, evaluates the alternatives, and makes the rational decision to pay for college with the money
2.
Actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of
a)
specialization.
b)
opportunity costs.
c)
economic interdependence.
d)
trade-offs.
3.
If a desired item is in such short supply that there is not enough to meet demand, then that item is said to be what?
a)
rare
b)
renewable
c)
scarce
d)
affordable
4.
In the time period covered by the production possibilities curve, the company decides to make 4 gallons of red paint. How many gallons of blue paint can the company make with the available time and resources?
a)
3
b)
2
c)
8
d)
6
5.
What is the central problem with which the study of economics is concerned?
a)
scarcity
b)
monetary policy
c)
excess
d)
inflation
6.
The cost of the next best alternative use of money, time, or resources when one choice is made rather than another is called the ___________.
a)
wealth
b)
capital
c)
opportunity cost
d)
market
7.
Which of the following provides the BEST definition of a trade-off?
a)
the value of the best alternative not chosen
b)
the exchange of goods
c)
the act of giving up one thing to obtain another
d)
giving up something for an item of lesser value
8.
Which factor of production do these images illustrate?
a)
capital
b)
land
c)
entrepreneurship
d)
labor
9.
The study of economics is important because it enables us to
a)
increase our consumption of consumer goods.
b)
become better decision makers.
c)
determine what goods ought to be produced.
d)
describe our standard of living.
10.
What factor of production do these images illustrate?
a)
entrepreneurship
b)
land
c)
labor
d)
capital
11.
The Untied States economy is one in which producers are generally free to produce what they want and consumers are free to purchase what they desire, so long as no laws are broken. At the same time, however, the government does regulate some aspects of the economy. The U.S. can BEST be described as which of the following.
a)
command economy
b)
a market economy
c)
mixed economy
d)
liberated economy
12.
Taylor is thinking of leaving the big corporation he works for and starting his own firm. he comes to you for advice and asks you what you think. As a friend, you might want to warn Taylor that starting his own firm will mean that he has
a)
to be prepared to sell stock in his company.
b)
no way to get a loan.
c)
no risks.
d)
unlimited liability.
13.
In a market economy, what is the primary motivation for producers to sell their products at a price consumers can afford?
a)
fear of government regulations
b)
sense of duty
c)
profit
d)
patriotism
14.
This is a schedule that shows the number of pairs of socks that producers are willing to make ans that consumers are willing to purchase at various prices. In a perfect market economy, for what price will the socks be sold?
a)
$2.00
b)
$1.50
c)
$4.50
d)
$3.00
15.
A good that is used in place of another good to meet the same need is called what?
a)
complementary good
b)
capital good
c)
substitute good
d)
consumer good
16.
DVD players are purchased by consumers in what kind of market?
a)
factor market
b)
social market
c)
mixed market
d)
product market
17.
A volcano erupts in Hawaii that destroys or damages many of the orchards that supply the US with pineapples. What will be the effect on the price and quantity of pineapples sold, assuming all else is equal?
a)
Price will drop but quantity will rise.
b)
Price will rise but quantity will drop.
c)
Price will rise and quantity will also rise.
d)
Price will drop and quantity will also drop.
18.
Assuming demand remains the same, if the supply of hot dogs is reduced, what will happen to the price of hot dogs?
a)
it will remain the same
b)
one cannot tell from the information provided
c)
it will increase
d)
it will decrease
19.
With respect to raising funds, the primary difference between a corporation and other types of businesses is that
a)
they can more easily make decisions about whether to seek a loan.
b)
they always have collateral, but other businesses do not.
c)
they obtain loans from banks.
d)
they can sell shares of the company to the general public.
20.
An industry that is dominated by a few large firms is
a)
perfectly competitive.
b)
oligopolistic.
c)
monopolistic.
d)
monopolistically competitive.
21.
An index that reports on price changes for about 80,000 goods and service is the
a)
implicit GDP price deflator.
b)
producer price index.
c)
consumer price index.
d)
current GDP.
22.
Which of the following events could cause aggregate supply curve AS 0 to shift to AS 1?
a)
a decrease in the price level
b)
an increase in the price for foreign oil
c)
a tax cut
d)
a rise in interest rates
23.
The Federal Reserve
a)
was established in 1940s.
b)
is made up of district banks that operate together.
c)
is managed by a 12-member board of directors.
d)
is made up of 12 district banks and 25 branch banks.
24.
What effect does a "tight money" policy have on the reserve requirement and the economy's money supply?
a)
It raises the reserve requirement, thereby decreasing the money supply.
b)
It raises the reserve requirement, thereby increasing the money supply.
c)
It lowers the reserve requirement, thereby increasing the money supply.
d)
It lowers the reserve requirement, thereby decreasing the money supply.
25.
The island of Mogo is ruled by a king and council of five elders. the King and the council determine what the islanders need and what can be produced. They also determine at what price things will be sold. Although they allow some people to own private property, they are strict about how much such property can be used. It sounds like Mogo has what kind of market.
a)
mixed market that is predominately command
b)
command market only
c)
free market
d)
true communist market
26.
Which point on the graph depicts economic expansion?
a)
W
b)
Z
c)
X
d)
Y
27.
A U.S. business buys new computers for its office workers from a U.S. computer manufacturer. the value of transactions would be included in which category in the graph?
a)
investment sector
b)
government sector
c)
net exports
d)
consumer sector
28.
Which letter on the graph represents a trough in the business cycle?
a)
Z
b)
X
c)
Y
d)
W
29.
The Fed would like to increase the money supply. Which of the following might be done to accomplish this task?
a)
increase the reserve requirement
b)
sell bonds
c)
increase the discount rate
d)
buy bonds
30.
The president of the United States appoints members of which group on the Federal Reserve organization chart?
a)
Board of Governors
b)
Federal Open Market Committee
c)
Federal Reserve Banks
d)
Federal Advisory Council
31.
Which of the following economic actors is MOST LIKELY to support free trade?
a)
US electronics producers
b)
CoCa-Cola Corporation
c)
the United Steelworkers of America
d)
the Anti-Globalization Coalition
32.
On the day shown in the illustration, how much American money would an importer receive in exchange for one British pound?
a)
$0.42
b)
$1.42
c)
$0.7042
d)
$1.7042
33.
The ___________ rate is the price of one country's currency in terms of another country's currency.
a)
variable exchange
b)
fixed exchange
c)
floating exchange
d)
foreign exchange
34.
The US charges a tax of thirty cents on every dollar's worth of foreign tennis shoes entering the country. What type of trade barrier is this?
a)
non-tariff barrier
b)
tariff
c)
quota
d)
it is not a trade barrier
35.
Which of the following is a limit on the number of a particular item that can be imported from a particular country?
a)
a standard
b)
a quota
c)
a tariff
d)
an embargo
36.
Floating exchange rates are determined by
a)
the central bank.
b)
the stock of gold reserve.
c)
the president of the US.
d)
supply and demand.
37.
Since the early 1960s, the U.S. government had forbidden all imports from Cuba. This situations is an example of
a)
a tariff.
b)
an embargo.
c)
a quota.
d)
a subsidy.
38.
Alpha can produce either 10 apples or 3 oranges. Beta can produce either 12 apples or 3 oranges.
a)
Alpha has an absolute advantage in the production of apples.
b)
Alpha has an absolute advantage in the production of oranges.
c)
Beta has a comparative advantage in the production of oranges.
d)
Beta has an absolute advantage in the production of apples.
39.
Igor Petrovich is a Russian businessman who does a great deal of business in Serbia. Currently one Russian ruble (currency) will buy 2.2 Serbian dinars (currency). Igor is attempting to decide whether to buy a new suit of clothes in Moscow (Russia) or Belgrade (Serbia). If the exchange rate just changed to one ruble per 2.75 dinars, where should he buy the suit and why?
a)
in Serbia because the ruble has appreciated
b)
in Russia because the ruble has depreciated
c)
in Serbia because the ruble has depreciated
d)
in Russia because the ruble has appreciated
40.
The graphs show the production possibilities frontiers for two countries who can produce only two products. Country X has an absolute advantage in which product or products, if any?
a)
wheat
b)
sugar
c)
both sugar and wheat
d)
neither sugar nor wheat
41.
Buying stocks, purchasing bonds, using profits to buy better machinery, and using part of one's income to take a training course are all forms of
a)
investments.
b)
insurance.
c)
credit.
d)
capital.
42.
Which of the following statements BEST describes the operation of banks?
a)
Banks take in deposits which they used to pay their employees andother costs.
b)
Banks, under license from the government, print money that they then loan out to businesses and households.
c)
Banks take in deposits, for which they pay a relatively small rate of interest, they then hold a small amount aside and loan out the rest at a higher rate of interest.
d)
Banks borrow money from the government at low interest rates and they loan that money to customers at higher interest rates.
43.
Most stocks in the United States are traded on the
a)
New York Stock Exchange.
b)
American Stock Exchange.
c)
over-the-counter market.
d)
regional stock exchanges.
44.
What amount was deducted from this paycheck for Social Security and Medicare tax?
a)
$40.01
b)
$104.70
c)
$61.20
d)
$4.00
45.
The three criteria for effective taxes are
a)
equity, progressiveness, and efficiency.
b)
efficiency, simplicity, and repressiveness.
c)
equity, simplicity, and efficiency.
d)
efficiency, simplicity, and progressiveness.
46.
Of the stocks shown in the quotation, which had the highest price per share withing the last 52 weeks?
a)
ExtndStayAm ESA
b)
ExxonMobile XOM
c)
FedExCp FDX
d)
FordMotor F
47.
Which of the following statements MOST ACCURATELY defines the term "interest rate"?
a)
the level of attention that economist pay to economic activity at any one time
b)
money paid by banks and financial institutions to the U.S. government
c)
discounts on purchases made with a credit card
d)
money paid by a borrower to a lender in exchange for the use of money
48.
Which of the following is an investment which allows someone to transfer financial risk?
a)
capital
b)
insurance
c)
entrepreneurship
d)
embargoes
49.
Corey borrows $100 dollars from Adam. They agree that Corey will pay back the loan in two months at a rate of 10% monthly. If Corey pays back exactly $120, then the interest was
a)
free.
b)
compounded.
c)
simple.
d)
impounded.
50.
An agreement in which a buyer receives goods or services a the present time in exchange for a promise to pay for them at a later time is called
a)
interest rate
b)
debt
c)
interst
d)
credit
100 %
