WorksheetsEconomics Final Exam Review
Total questions: 60
Worksheet time: 30mins
Societies are faced with three basic questions about the production of goods?
what, how, and why
what, where, and when
what, how, and for whom
when, where, and for whom
Which of the following descriptions best explains the meaning of opportunity cost?
The initial cost of starting a new business.
The cost of business failure.
The cost of choosing one alternative over another.
The risk associated with producing a new item.
Which of the factors of production involves taking risks and combining resources to produce a good or service?
Land
Labor
Capital
Entrepreneurs
Which of the following statements best describes the purpose of a production possibilities frontier?
It predicts the future production of a nation.
It identifies trends in production.
It shows which products are most profitable.
It identifies all possible combinations of goods and services an economy can produce.
Which of these economic systems have the least in common?
Market economy and capitalism
Command economy and socialism
Command economy and capitalism
Free-enterprise economy and market economy.
Which type of economy is the most prevalent in the world today?
Mixed
Market
Command
Traditional
The dollar value of all final goods, services, and structures produced in a country in a year is known as ?
Gross National Product
Franchise
Profit motive
The struggle among sellers to attract customers by offering the best products at the lowest prices is known as ?
Voluntary exchange
Profit motive
Property rights
Private property rights give people the incentive to work, save, and .
Purchase
Invest
Compete
A general rise in the level of prices over time is known as .
Deflation
Stagflation
Hyperinflation
When the price of something increases, the quantity demanded .
Increases
Remains unchanged
Reverses
Consider the term marginal utility. Which word is the best synonym for marginal?
Satisfactory
Borderline
Additional
What is the main cause of a change in quantity demanded?
Substitution
Changes in revenue
Change in price
The income effect
Which of the following replaces a costly item with a less costly one?
The substitution effect
The income effect
Change in demand
Consumer taste
Which is a likely complement to a table computer?
DVDs
Movie tickets
Apps
Pencils
For which product is demand likely to be the most elastic?
A product with no substitutes
A product with inadequate substitutes
A product with many adequate substitutes
It is impossible to tell
Which of these best describes the influence of high prices on the behavior of producers?
They are an incentive for producers to produce more.
They are an incentive for producers to buy less.
They encourage producers to modify their supply schedules.
They have no significant overall effect on producers’ behavior.
Which of these is an example of a fixed cost?
Labor
Delivery charge for output
State and local property taxes
Charges for a factory’s electrical use
Which of these is an example of a variable cost?
Raw materials
The interest fees on bonds
State and local property taxes
Charges for a factory’s electrical use
Which term denotes the change in total income when one additional unit of output is added?
Total product
Supply schedule
Change in supply
Marginal revenue
Which of these tends to force the price of an item downward?
A surplus of that item
A shortage of that item
Attainment of an equilibrium price for that item
Attainment of an equilibrium quantity of that item
Which of these tends to force the price of an item upward?
A surplus of that item
A shortage of that item
Attainment of an equilibrium price for that item
Attainment of an equilibrium quantity of that item.
Equilibrium is reached when what occurs?
Quantity supplied equals quantity demanded
There is no change in the quantity supplied
Price increases
Prices are inelastic
What do price ceilings and price floors prevent?
Shortages
Surpluses
Prices reaching equilibrium
Benefits to consumers
Which market structure is defined by a single producer?
Pure competition
Monopolistic competition
Oligopoly
Monopoly
Which of the following can cause a market failure?
Too much mobility
Too much competition
Not enough information
Too much information
In the economic term oligopoly, the word part “olig-” probably means?
Few
Single
All
One
When a factory pollutes a river, the resulting water pollution is an example of a ?
Technological monopoly
Public good
Neutral spillover effect
The Sherman Act, the Clayton Act, and the Federal Trade Commission Act were all designed to.
Ensure competition
Promote trusts
Create public goods
Extend mortgages
A business run by a single person is a ?
Partnership
Corporation
Limited liability corporation
When a union negotiates pay and other job-related matters, this is called .
Going on strike
Cooperative bargaining
Accessing resources
Which activity is illegal in a state with a right-to-work law?
Joining a union
Denying any qualified worker a job
Requiring a higher hourly rate for overtime hours
Requiring union membership as a condition of employment
Which of the following tactics is used only by management?
Picket
Lockout
Boycott
Negotiation
Which word is a good synonym for the word barter in the term barter economy?
Trade
Borrow
Save
Invest
Which of the following is a basic characteristic of money?
Portability
Durability
Divisibility
All the above
Which of the following is one of the three functions of money?
Portability
Scarcity
Store of value
Divisibility
The Federal Reserve is the nation’s bank.
Only
First
Oldest
When making a risky investment, investors usually demand a .
Higher selling price
Lower compensation
Lower purchasing price
Which of the following terms describes a strong stock market?
Bull market
Bear market
Spot market
Futures market
What is the main difference between Treasury bonds, Treasury notes, and Treasury bills?
The amount of time for maturity
The interest rate
The minimum purchase requirement
The method of sale
Which of these is an example of an intermediate product?
A new computer monitor sold alone
A secondhand computer monitor sold alone
A computer monitor packaged as part of a new computer system
A computer monitor that has been broken and needs replacement.
A decline in real GDP usually lasting two quarters or more is called a ____?
Recession
Business fluctuation
Peak
Business cycle
A period of recovery from a recession is known as a ____?
An econometric model
A trough
An expansion
A peak
The Federal Deposit Insurance Corporation (FDIC) was created to ____?
Prevent working people from being exploited by employers
Provide modest bank insurance for depositors
Regulate new companies that were soliciting funds from investors
Help people provide for their own retirement
When the general level of prices rises, the economy is experiencing ____?
Construction
Stagflation
Deflation
Inflation
Which of the following is NOT a form of unemployment?
Underemployment
Long-term unemployment
Frictional unemployment
structural unemployment
Which of the following is NOT a cause of inflation?
Wage-price spiral
Reducing purchasing power
Cost-push
Demand-pull
An effective tax is one that exhibits one or more of the following characteristics.
Equity
Simplicity
Efficiency
All the above
In discussing taxes, what is the opposite of regressive?
Progressive
Flat
Value-added
Alternative
Which of the following is NOT an example of federal mandatory spending?
Social security
National defense
Income security
Medicare
What is the main purpose of a sin tax?
Business investment
Behavior adjustment
Income redistribution
Resource allocation
Fiscal policy may involve ____.
Estimating the GDP
Regulating labor unions
Recognizing an economic problem
Taxing corporations
In the model, GDP = C + I + G + (X – M), “G” stands for ____.
Government spending
Growth
Gross domestic product
General revenue
Which of the following groups does supply-side policy target through stimulation?
Producers
Consumers
Workers
Government
What do banks do with customer deposits?
They use them to conduct monetary policy.
They use them to enforce wage-price controls.
They keep a portion as legal reserves and loan out a portion at interest.
They use a portion to calculate interest rates and keep a portion as legal reserves.
The Fed’s main tools for conducting monetary policy are:
Open market operations, discount rate, and reserve requirements
Taxation, government spending, and subsidies
Import tariffs, export quotas, and trade agreements
Minimum wage laws, labor unions, and price controls
Which of these is a prominent feature of monetary policy?
Adjusting government expenditures to stimulate the economy
Adjusting tax rates to stimulate the economy
Adjusting interest rates to stimulate the economy
Adjusting discretionary spending to stimulate the economy
What does a domestic protective tariff seek to protect?
Protectionists
Revenue
Free trade
Domestic industries
Country A can produce more coal than Country B. An economist would say that Country A has ____ over Country B.
An export advantage
A comparative advantage
An absolute advantage
A production possibility advantage
The three synonymous terms to describe the U.S. economy system are free enterprise, capitalism, and ______.
Limited government.
Competition
Free market
Economic freedom
