WorksheetsContemporary Economics Final Review Quiz
Total questions: 51
Worksheet time: 33mins
What is the basic economic problem that arises because resources are limited and wants are unlimited?
Inflation
Scarcity
Opportunity Cost
Equilibrium
Which of the following best defines "opportunity cost"?
The money you spend on a product
The next best alternative given up when making a choice
The total cost of all options
The price of a good in the market
Which economic system relies primarily on customs and traditions to make economic decisions?
Command economy
Market economy
Traditional economy
Mixed economy
What is the role of government in a mixed economy?
To control all production and distribution
To have no involvement in the economy
To regulate and sometimes participate in the market
To only collect taxes
What happens to the quantity demanded of a product if its price increases, all else being equal?
It increases
It decreases
It stays the same
It doubles
Which term describes the point where the quantity supplied equals the quantity demanded?
Surplus
Shortage
Equilibrium
Price floor
Which market structure is characterized by a single seller?
Perfect competition
Oligopoly
Monopoly
Monopolistic competition
Which type of business is owned by shareholders and can sell stock to raise capital?
Sole proprietorship
Partnership
Corporation
Cooperative
Gross Domestic Product (GDP) measures:
The total value of all goods and services produced within a country in a year
The total amount of money in circulation
The number of people employed
The total value of exports
Which of the following is considered a sign of inflation?
Falling prices
Rising unemployment
Rising general price levels
Decreasing GDP
Which institution is primarily responsible for controlling the money supply in the United States?
The Treasury Department
The Federal Reserve
The World Bank
The Internal Revenue Service
What is the main function of banks in the economy?
To print money
To collect taxes
To accept deposits and make loans
To set interest rates
Which of the following is an example of a fiscal policy tool?
Changing the reserve requirement
Open market operations
Government spending
Setting the discount rate
What is a budget deficit?
When government revenue exceeds spending
When government spending exceeds revenue
When exports exceed imports
When imports exceed exports
Which of the following is a benefit of saving money in a retirement account?
Immediate access to funds without penalty
Earning interest or investment returns over time
Paying higher taxes
No protection from inflation
Which of the following is an example of a fixed expense in a personal budget?
Groceries
Rent or mortgage payment
Entertainment
Clothing
If a country experiences high unemployment and low inflation, which fiscal policy action might the government take to stimulate the economy?
Increase taxes
Decrease government spending
Increase government spending
Raise interest rates
A consumer is deciding between buying a new phone or saving the money for a trip. What is the opportunity cost of buying the phone?
The money spent on the phone
The enjoyment of the trip that is given up
The price of the phone
The time spent shopping
If the price of a substitute good increases, what is likely to happen to the demand for the original good?
Demand will decrease
Demand will increase
Demand will stay the same
Supply will increase
A person receives a credit card offer with a low introductory interest rate, but the rate increases significantly after six months. What is the best financial decision?
Ignore the interest rate change and use the card freely
Use the card only if you can pay off the balance before the rate increases
Max out the card before the rate increases
Never use credit cards
How does scarcity affect economic decision-making?
It eliminates the need for prioritisation.
It forces individuals to make choices based on limited resources.
It allows for unlimited consumption of goods.
It reduces the need for budgeting.
What is opportunity cost?
The cost of the next best alternative foregone.
The total cost of all alternatives.
The cost of the least preferred option.
The cost of producing a good or service.
Which market structure is characterized by a large number of small firms, identical products, and easy entry for new firms?
Monopoly
Oligopoly
Perfect competition
Monopolistic competition
Which of the following best describes a mixed economy?
An economy where all decisions are made by the government.
An economy that operates without any government intervention.
An economy that incorporates elements of both market and command economies.
An economy where decisions are made solely through market forces without any regulation.
In a market economy, who primarily decides what goods and services should be produced?
The government
Consumers
Large corporations
International trade partners
What does GDP stand for?
General Domestic Product
Gross Domestic Product
Governmental Domestic Product
Gross Domestic Performance
What does it mean if a country's GDP is increasing?
The country is experiencing deflation
The country's economy is shrinking
The country's economy is growing
The country's unemployment rate is increasing
_____ is the study of how people manage limited resources to satisfy their wants and needs.
Economics
Supply
Demand
Business Plan
In this type of economy, the government makes all of the economic decisions.
Traditional
Command
Market
Which of the following are reasons to create a budget? You may select more than one response.
Plan for a financial goal.
Be able to spend all your money.
Help pay off debt.
A plan that details how money will be earned and spent.
needs
budget
bill
savings
IRS stands for
Internal Revenge Service
International Revenue System
Internal Revenue Service
Inspection Ravioli Sauce
Which of the following taxes is applied to wages, salaries, dividends, and interest earned?
Corporate Income Tax
Income Tax
Estate Tax
Excise Tax
Local Governments earn the majority of their money from...
Property tax
Sales Tax
Corporate Tax
Fees
the Federal Government earns most of its money from...
Corporate Tax
Social Security and Retirement
Individual Income Tax
Hint: think of the soda market
Which statement describes the law of demand?
As prices rise, quantity demanded decreases
As prices rise, demand decreases.
As prices fall, quantity demanded decreases.
As prices fall, demand decreases.
Which is an example of the Law of Demand at work?
The price of the pizza goes up when the price of cheese goes up.
Demand for pizza goes down when tacos become more popular
The price of pizza falls when the demand for pizza falls
Demand for pizza rises when the price of pizza falls
What causes a shift in the demand curve?
A decrease in price
An increase in price
A change in an area other than price
A change in price and availability
The amount of a good or service that producers are willing and able to sell at all possible prices during a given period of time.
Supply
Demand
Factor of Production
Production
The market equilibrium price is the price at which
surpluses depress the number of goods supplied
shortages and surpluses will have no effect on the market
the government will not intervene in the market
the quantity demanded is the same as the quantity supplied
What is the Equilibrium Price?
1
2
3
4
When there is a shortage the price will usually?
rise
fall
remain the same
equilibrium
The diagram represents a(n)
increase in supply
decrease in supply
change in quantity supplied
none of the above
The diagram represents a
increase in demand
decrease in demand
change in quantity demand
none of the above
