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WorksheetsFinal Review
Total questions: 70
Worksheet time: 39mins
Who is recognized as the 'father of Economics'?
Adam Smith
John Maynard Keynes
Milton Friedman
Karl Marx
What does normative economics involve?
Describing economic outcomes
Advising on economic policies based on value judgments
Analyzing individual and business decision making
Studying the overall economy
Which of the following would NOT be included in GDP?
A new car made in a factory in the U.S.
A haircut at a local salon
A used car sold at a dealership
A meal at a restaurant
Which of the following is an example of a transfer payment?
Social Security
Paycheck from private workplace
Check from your grandma
Money in an envelope
What describes positive economics?
It prescribes economic solutions based on opinions
It focuses on economic behavior without making judgments
It involves the study of economic scarcity
It is concerned with what ought to be in the economy
What does marginal utility refer to?
The total satisfaction received from consuming a product
The satisfaction gained from the first unit of consumption
The extra satisfaction from an increase of one additional unit of consumption
The decrease in satisfaction after consuming too much
A free enterprise system enforces contracts and protects property rights:
True
False
What results in a 'negative utility'?
Gaining too much satisfaction from a product
Having no economic gain from an additional unit
The initial cost of acquiring a product
Consuming less than one unit of a product
What are goods?
Services provided by professionals
Physical items that benefit consumers
Intangible items with economic value
All resources available in nature
Which of the following is considered a service?
A brand-new computer
Legal advice from a lawyer
A freshly harvested crop of corn
Manufactured goods from a factory
What does 'maximizing your utility' in school mean?
Attending as many classes as possible
Choosing the best courses to satisfy personal and educational needs
Spending more time in school than at home
Maximizing the number of textbooks read
What does GDP stand for?
Gross Domestic Product
General Domestic Production
Global Development Plan
Gross Development Policy
What is meant by 'trade-offs'?
The financial transactions involved in buying and selling goods
The benefits received from goods and services
The alternative choices faced when making a decision
The costs associated with production
Which economic system is primarily based on customs, traditions, and beliefs where economic roles are typically passed down from one generation to the next?
Market economy
Command economy
Traditional economy
Capitalism
In which type of economy does the government make all the decisions regarding what to produce, how to produce it, and for whom to produce?
Market economy
Command economy
Traditional economy
Socialism
Which system is characterized by private ownership where prices are determined by the market?
Socialism
Communism
Market economy
Command economy
What is included in the calculation of a country’s GDP?
The value of all goods and services produced within a country
Only goods produced by large companies
The total value of goods imported from other countries
The money earned by citizens working abroad
Which economic system advocates for social ownership of the means of production, but allows for some degree of private ownership and operates within a market structure for the distribution of goods?
Capitalism
Communism
Socialism
Traditional economy
Which economic system emphasizes minimal government intervention in the economy, private property rights, and free enterprise
Socialism
Communism
Traditional economy
Capitalism
What is the focus of macroeconomics?
The decision-making processes of individuals
The study of economy-wide phenomena
The analysis of costs and benefits
The prediction of economic outcomes
What effect do subsidies generally have on supply?
Increase supply
Decrease supply
Shift the supply curve left
Have no effect
What role does the government play in a pure market economy?
It does not interfere at all in economic activities.
It only collects taxes but does not provide any services.
It regulates and intervenes in the economy when necessary.
It owns all the means of production.
An example of a 'public good' is:
A branded smartphone.
National defense.
A cup of coffee.
A concert ticket.
The concept of 'diminishing marginal utility' suggests that:
The first unit of consumption of a good or service yields more satisfaction than the second and subsequent units.
Satisfaction increases with each additional unit consumed.
The utility of a good decreases with its abundance.
Consumers derive increasing satisfaction from goods as prices drop.
What is the primary difference between macroeconomics and microeconomics?
Macroeconomics deals with the economy as a whole, while microeconomics focuses on individual decisions.
Microeconomics studies global economies, whereas macroeconomics focuses on local economies.
Macroeconomics is a theoretical study, while microeconomics is practical.
There is no significant difference; they are interchangeable terms.
Which of the following best describes the term 'factors of production'?
Goods and services produced in an economy.
Resources used to make all goods and services.
The final products available in the market.
The outcome of economic activities.
Which term describes the image above?
mixed economy.
market economy.
command economy.
communism.
Which terms describe the image above?
mixed economy.
market economy.
capitalism.
communism.
In a market economy, who decides what goods and services will be produced?
The government
Corporations
Consumers and producers through the market
International trade agreements
What is inflation?
A decrease in the overall price level of goods and services
An increase in the overall price level of goods and services
The rise in the value of money over time
A drop in the cost of living
How does the Commerce Clause promote economic interdependence?
It discourages local markets.
It defines legislative powers vaguely.
It keeps states from creating trade barriers.
It puts pressure on states to increase production
In a voluntary exchange, why do people give something up?
to increase their self-sufficiency
to get something they want more
to allocate scarce resources fairly
to comply with state requirements
How does trade increase the value of an item?
It makes the item more expensive to buy.
It puts more different goods into competition.
It provides work for storekeepers and truckers.
It transfers the item to someone who values it more.
What happens to supply when the cost of inputs increases?
Supply curve shifts right
No change in supply
Quantity supplied increases
Supply curve shifts left
Which term best describes the condition that exists when the state of Michigan depends on Florida to produce orange juice, and Florida depends on Michigan to produce cherries?
Economic Interdependence
Comparative advantage
Whiteout Conditions
Opportunity cost
What is the primary role of a bank?
To sell goods and services
To bring together buyers and sellers
To provide legal advice to consumers
To insure vehicles and properties
Which of the following is NOT a type of deposit offered by banks?
Checkable deposits
Savings deposits
Mortgage
Time deposits
What is unemployment?
The number of people who are retired
The number of people without jobs who are actively looking for work
The number of people who are not working by choice
The total population of a country
How does fractional reserve banking benefit banks?
It allows them to lend out all of their deposits at high interest rates.
It requires them to keep all deposits in reserve.
It permits them to lend out a portion of deposits while keeping a fraction in reserve.
It lets them invest in the stock market with depositors' money.
What function does the Federal Reserve NOT perform?
Issuing dollars
Fining banks
Clearing checks
Managing the nation’s money supply
What does liquidity mean in banking terms and which type of account is considered 'highly liquid'?
Liquidity refers to the risk in investments; stocks are highly liquid
Liquidity is the bonus interest rate; savings accounts are highly liquid
Liquidity refers to the ease of converting assets into cash; checkable deposits are highly liquid
Liquidity measures the bank's overall financial health; time deposits are highly liquid
How do complementary goods affect demand?
Price changes in one good affect the supply of the other
Price changes in one good affect the demand for the other
They have no impact on each other
They cause movement along the supply curve
Who typically takes out consumer loans and for what purpose?
Businesses, to cover operational costs
Individuals, for personal items like cars or boats
Governments, for funding public projects
Non-profits, for organizational expansion
What best describes a sole proprietorship?
A business owned by several individuals
A business owned by a single individual
A business that is legally incorporated
A non-profit entity
Which of the following is an effect of high inflation?
Money buys more goods and services than before
People can save more money easily
Money loses value, and goods become more expensive
Prices remain stable over time
Who was the founder of modern economics?
Thomas Malthus
Adam Smith
David Ricardo
Karl Marx
What are the two parts of economics?
(a)
Supply and demand
Gross Domestic Product and unemployment
Inflation and interest rates
Scarcity affects how the four (a) are put to use.
Since people cannot have everything they want, they have to make (a) , which involves a (b) (something you have to give up to get what you want).
Scarcity arises because human (a) are limitless, while resources are (b) .
Which of these statements is an example of normative economics?
"Taxes ought to be lowered."
"Inflation is higher this year."
"The bond market is in decline."
"Speculation caused a recession."
Which of the following statements is normative?
Large government deficits cause an economy to grow more slowly.
People work harder if the wage is higher.
The unemployment rate should be lower.
Printing too much money causes inflation.
This means that the government should not interfere in the marketplace.
Laissez Faire
Capitalism
Communism
Socialism
Economic side effects that affect the economy in a positive or good way.
Negative Externality
Positive Externality
Externality
NO Externality
The study of the economic behavior of individual persons, families, and businesses is known as (a) .
The formula C+I+G+X represents (a) .
Adam Smith economic theory is described in...
The Wealth of Nations
Rip Van Winkle
Evangaline
The Communist Manifesto
Adam Smith...(more than 1 answer!)
is the creator of the invisible hand
created communism
found self-interest and competition moved the economy
a proponent of laissez faire
Economics can be described as the study of (a)
Match the following:
Supply
How much is available to buy
Demand
How much people want it
Commodity
Item that is bought and sold
Producer
Someone who makes or grows an item
Consumer
Someone who buys items
The desire or willingness a consumer has to purchase a good or a service is called? (a)
What defines "factors of production"?
Resources used to produce goods and services
Resources used to consume goods and services
Resources used to dispose of undeeded goods
Resources used to maximize the amount of goods produced
Which of the following best defines a command economic system?
Political leaders organize production and distribution
Everyone is involved in production and distribution
Customs and traditions are used to organize production and distribution
None of the above
Which of the following best defines the law of demand?
As price increases, quantity demanded decreases
As price increases, quantity demand increases
How a change in price effects the quantity demanded
How a change in price effects the quantity supplied
Inflation can be described as an:
Increase in prices
Increase in demand
Increase in supply
All of the above
Which of the following economic systems is defined by very little government involvement?
Capitalism
Socialism
Communism
Fascism
Which of the following economic systems is defined by some government involvement, usually with critical resources?
Capitalism
Socialism
Communism
Fascism
Which of the following economic systems is defined by majority, if not complete government involvement?
Capitalism
Socialism
Communism
Fascism
Which of the following economic systems is only theoretical and has never worked in practice?
Capitalism
Socialism
Communism
Fascism
