WorksheetsBE 2.02 all Review
Total questions: 99
Worksheet time: 1hrs 10mins
A student must decide between going to the movies with friends or staying home and studying for a final exam. She chooses to stay home and study. Which economic concept describes going to the movies in this scenario?
Comparative Advantage
Equilibrium Point
Income Effect
Opportunity Cost
A person who purchases a good or service
consumer
taxes
supply
good
A person who provides a good or service
producer
need
want
consumer
Which of the following is true?
Needs, wants, and resources are all unlimited
Needs and wants are unlimited but resources are limited
Needs and wants are limited but resources are unlimited
Needs, wants, and resources are all limited
Consumption is using goods and services. Consumer preferences and ____________ determines what is produced and consumed
Incentives
Price
Factors of Production
Resources
The term for the combination of resources to make goods or provide services is
Consumption
Opportunity Cost
Production
Scarcity
things purchased by consumers
goods
consumer
producer
supply
There are 4 _______________. They are land, labor, capital and entrepreneurship.
Factors of Production
Market Economy
Profit
Economics
A characteristic of human wants is that they are
limited
unchanging
unlimited
consistent
Into what two categories can wants be divided?
Unlimited and noneconomic
Economic and noneconomic
Unlimited and limited
Unlimited and economics
Seeing a movie at a theater would be considered a(n) __________ want.
unlimited
limited
economic
noneconomic
Friendship would be considered a(n) __________ want.
economic
limited
noneconomic
unlimited
Which of the following groups of words best describes wants:
Limited, changing, and compensating
Limited, unchanging, and competing
Unlimited, unchanging, and compensating
Unlimited, changing, and competing
Water and air are examples of __________ resources, while people are considered to be __________ resources.
capital; human
natural; human
physical; mental
mental; natural
In economics, capital goods include
buildings and equipment.
labor and management.
mental and physical work.
trees and water.
Why are resources considered limited?
Everyone has them, and they change.
Entrepreneurs do not invest enough of them.
There are so many that people must decide which ones to choose at any one time.
There are not enough available for everyone to have as much of them as desired.
A gap between unlimited wants and limited resources creates
scarcity.
economics.
wants.
resources.
Michelle is trying to decide which goods and services to purchase so that she can get maximum satisfaction. Michelle is
creating scarcity.
economizing.
increasing distribution.
a producer.
John only had $40 to spend and couldn’t decide whether to buy a new pair of jeans or to go to an amusement park. He finally decided to spend his money on the amusement park. What was the opportunity cost of his decision?
New pair of jeans
$40
No opportunity cost was involved.
Trip to amusement park
A manager is willing to accept the production of fewer products as long as their workers produce higher-quality products. The manager is making a(n)
exchange.
trade-off.
capital good.
distribution.
What are the three basic economic questions?
When will products be produced, how will products be produced, and how will products be allocated
Where will products be produced, when will products be produced, and what products will be produced
What products will be produced, how will products be produced, and how will products be allocated
When will products be produced, what products will be produced, and how will products be allocated
The heart of economics is
wants.
resources.
trade-offs.
decision-making.
Which of the following is the best reason for studying economics:
To determine which occupations interest you
To find the best use for resources and supplies
To prepare for effective decision-making and responsible citizenship
To learn how to invest money and express social responsibility
The ultimate goal of all economic activity is
consumption.
production.
exchange.
distribution.
For consumption to occur, goods and services must be
specialized.
improved.
exchanged.
produced.
What do consumers, producers, and the owners of resources do with money payments to create a flow of resources, goods, services, and money payments?
Exchange
Distribute
Produce
Consume
Distribution examines how income is divided between
producers and resource owners.
consumers and producers.
consumers and resource owners.
producers and economizers.
Consumers are typically most willing to pay more for goods and services that bring them greater
opportunity costs.
satisfaction.
popularity.
trade-offs.
Two factors involved in determining the value of a resource, good, or service are
availability and trade-offs.
demand and desires.
productivity and opportunity costs.
availability and demand.
What is the amount of money for which an item sells in the competitive marketplace?
value
price
market
utility
What is one factor that will determine how much a customer is willing to pay for a good or service?
Production costs
Buying power
Rationing
Incentive
How much a consumer is willing to pay for a product depends partly on the consumer's opinion of the product's
value
production costs
efficiency
target market
Which of the following is a business comparing when it analyzes the cost of buying wood desks versus the cost of buying metal desks:
Incentives
Excess demand
Inflated price
Relative price
Which of the following is an example of a change in the relative price ratio when the original price of red apples is 60¢ per pound and the original price of green apples is 80¢ per pound:
Red apples @ 30¢ per pound; green apples @ 40¢ per pound
Red apples @ 90¢ per pound; green apples @ 80¢ per pound
Red apples @ 45¢ per pound; green apples @ 60¢ per pound
Red apples @ $1.20 per pound; green apples @ $1.60 per pound
How do producers answer the economic question of what to produce in a market economy?
They produce products that are the most profitable.
They produce products that provide the least incentives.
They produce products that cost them the most to produce.
They produce products for which they have the most information.
To be able to charge competitive prices in our economy, producers must combine resources and technologies to produce
limited quantities of goods.
items at the lowest cost possible.
more than consumers will buy.
items to sell at relative prices.
What do consumers, producers, and resource owners need to have in order to make economic decisions?
Economic incentives
Information about prices
Rationing skills
Limited liability
What are the incentives in our economy that encourage producers to change and reallocate their resources?
Stocks
Consumers
Profits
Expansions
How are prices used in our economy?
To ration limited resources
To provide equilibrium in the market
To encourage excess supply
To encourage excess demand
Who gets the goods and services produced in our economy?
Whoever is most efficient
Whoever has the least costs
Whoever is willing and able to pay the price
Whoever obtains the most information and incentives
A store sells T-shirts for $10. Which of the following would be the most likely to occur if all other factors remain the same, and there is a demand for the T-shirts at $10:
If the price is raised, business profits will go up.
If the price is lowered, business profits will go down.
If the price is raised, the volume of sales will go up.
If the price is lowered, the volume of sales will go up.
What usually happens to the demand for a good or service when the price increases?
it increases
it decreases
it varies
it stays the same
Determine a product’s equilibrium price by examining the following table:
$11.00
$11.50
$12.00
$12.50
What exists when producers produce more than buyers are willing and able to buy?
Excess supply
Equilibrium price
Normal price
Excess demand
What do producers often do when supply is greater than demand?
Increase price
Increase quality
Lower prices
Lower quality
When supply is greater than demand, a __________ often develops.
shortage
price ceiling
buyer's market
seller’s market
After a mild, dry winter, the supply of sleds should be __________ than demanded. Therefore, the price would be __________.
less; increased
less; decreased
greater; increased
greater; decreased
Excess demand is eliminated when the selling price reaches the point at which consumers are willing to buy __________ producers have to sell.
fewer products than
the same quantities that
a larger amount than
more expensive goods than
When demand is greater than supply, a __________ often develops.
buyer’s market
seller’s market
surplus
price ceiling
Which of the following is an example of the substitution effect:
The price of laptops went up recently, so Francis decided to buy a tablet instead.
The mayor recently instituted a price ceiling on the monthly rent that apartment landlords can charge their tenants.
The demand price of a ticket at the local amusement park is exactly equal to its supply price.
A candy bar costs $0.50, and the price of a pack of gum is $1.00. The relative price ratio
is 1 to 2.
Prices set higher than the equilibrium price will result in
excess supply.
excess demand.
decreased supply.
increased profits.
Jeremy has $15,000 to spend on a new car. He found a car that cost $14,500, but he did not think the car was worth more than $12,000. The dealer told Jeremy that he has not been able to sell this model because other customers have expressed the same opinion as Jeremy. Does demand for this car exist?
Yes, because consumers like the car but don’t buy it.
Yes, because consumers think the car is worth $12,000.
No, because consumers do not have the buying power to purchase this car.
No, because consumers are not willing to pay the price
The quantity of a good or service that producers are able and willing to offer for sale at a specified price in a given period of time is
quantity demanded
quantity sold
demand
supply
When the price of Bluetooth speakers increases, the quantity of Bluetooth speakers offered for sale will increase. This is an example of the law of
supply
cost of production
demand
standardization
Your business is selling more and more large-screen televisions each month. Applying the law of supply and demand, what do you expect to happen to the price and supply of these televisions over the next few months?
The price will decrease, and supply will increase.
The price will decrease, and supply will decrease.
The price will increase, and supply will decrease.
The price will increase, and supply will increase.
A local neighborhood has many houses for sale at a low price, but demand for the houses is low. What kind of market most likely exists in the neighborhood?
Seller's
Buyer's
Inelastic
Discretionary
Which of the following is characteristic of a seller’s market:
small demand
high prices
low profits
large supply
Orlando changes the price of one of his products, and this price change leads to a major change in the number of people who purchase the product. This means that demand for Orlando’s product is
constant
inelastic
competitiive
elastic
Demand for a good is more likely to be elastic when the good is
imported
a luxury
a necessity
inexpensive
Which of the following describes inelastic demand:
limited to luxury goods
not affected by price change
fluctuating
variable
Even though gasoline prices increased 15 cents per gallon as the result of the new gas tax, Alice continued to buy gas so that she could make her 20-mile drive to work. This is an example of what type of demand?
discretionary
elastic
inelastic
complementary
Which of the following is a factor affecting a product’s utility to the individual customer:
number of producers
number of consumers
price of other goods
consumer's age
Which of the following determines whether consumers can purchase goods or services:
buying power
labor costs
competition
production cost
The price of complementary products has an effect on
elasticity
supply
utility
demand
Most businesses strive to supply goods and services in direct proportion to
supply
demand
cost of production
standard of living
What is the amount of money for which an item sells in the competitive marketplace?
Value
Price
Market
Utility
How much a consumer is willing to pay for a product depends partly on the consumer’s opinion of the product’s
value
price
market
utility
What is one factor that will determine how much a customer is willing to pay for a good or service?
production costs
buying power
rationing
incentive
Which of the following is a business comparing when it analyzes the cost of buying wood desks versus the cost of buying metal desks:
incentives
excess demand
inflated price
relative price
Which of the following is an example of a change in the relative price ratio when the original price of red apples is 60¢ per pound and the original price of green apples is 80¢ per pound:
Red apples @ 30¢ per pound; green apples @ 40¢ per pound
Red apples @ 90¢ per pound; green apples @ 80¢ per pound
Red apples @ 45¢ per pound; green apples @ 60¢ per pound
Red apples @ $1.20 per pound; green apples @ $1.60 per pound
How do producers answer the economic question of what to produce in a market economy?
They produce products that are the most profitable.
They produce products that provide the least incentives.
They produce products that cost them the most to produce.
They produce products for which they have the most information.
To be able to charge competitive prices in our economy, producers must combine resources and technologies to produce
limited quantities of goods.
items at the lowest cost possible.
more than consumers will buy
items to sell at relative prices.
How are prices used in our economy?
To ration limited resources
To provide equilibrium in the market
To encourage excess supply
To encourage excess demand
Who gets the goods and services produced in our economy?
Whoever is most efficient
Whoever has the least costs
Whoever is willing and able to pay the price
Whoever obtains the most information and incentives
A store sells T-shirts for $10. Which of the following would be the most likely to occur if all other factors remain the same, and there is a demand for the T-shirts at $10:
If the price is raised, business profits will go up.
If the price is lowered, business profits will go down.
If the price is raised, the volume of sales will go up.
If the price is lowered, the volume of sales will go up.
What usually happens to the demand for a good or service when the price increases?
it increases
in decreases
it varies
it stays the same
What exists when producers produce more than buyers are willing and able to buy?
excess supply
equilibrium price
normal price
excess demand
When supply is greater than demand, a __________ often develops.
shortage
price ceiling
buyer's market
seller's market
After a mild, dry winter, the supply of sleds should be __________ than demanded. Therefore, the price would be __________.
less; increased
less; decreased
greater; increased
greater; decreased
Excess demand is eliminated when the selling price reaches the point at which consumers are willing to buy __________ producers have to sell.
fewer products than
the same quantities
a larger amount than
more expensive goods than
When demand is greater than supply, a __________ often develops.
buyer's market
seller's market
surplus
price ceiling
Which of the following is an example of the substitution effect:
The price of laptops went up recently, so Francis decided to buy a tablet instead.
The mayor recently instituted a price ceiling on the monthly rent that apartment landlords can charge their tenants.
The demand price of a ticket at the local amusement park is exactly equal to its supply price.
A candy bar costs $0.50, and the price of a pack of gum is $1.00. The relative price ratio is 1 to 2.
Excess demand and excess supply cause changes in
price index
price determination
market price
relative price ratio
Any factor that causes changes in supply and demand will cause changes in
price
value
utility
usefulness
Some energy companies offer free electricity at night and on weekends because during those times
supply and demand are equal.
supply is greater than demand.
demand is greater than supply
the substitution effect occurs
Prices set higher than the equilibrium price will result in
excess supply
excess demand
decreased supply
increased profits
What do producers often do when supply is greater than demand?
increase prices
increase quality
lower prices
lower quantity
