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WorksheetsEcon Final Prep Questions
Total questions: 125
Worksheet time: 2hrs 38mins
Too much money in an economy can cause inflation
true
false
One measure of a nation’s economic health is __________. This is the total value of all goods & services produced in a country each year.
Macroeconomics
The economy
microeconomics
Gross domestic product (GDP)
What customary role does the United States government play related to refineries and factories?
takes control if they do not make a profit.
regulates their release of pollutants into the atmosphere
tells refineries and factory owners what they are allowed to produce.
It tells the owners how much they are allowed to produce.
Which of these is NOT an advantage of the free market?
growth & innovation
freedom of choice
no private ownership
variety of goods
In a pure market system, who controls production?
Government
Businesses
Individuals
What is a mixed economic system?
both individuals and government make decisions
completed run by the government
Individuals make the decisions
Corporations make the decisions
What is specialization?
resources to produce a single or few kinds of goods/services
amount of goods/services produced by a worker or business in a given time frame
Not enough of a certain resource to satisfy persons wants or needs
Workers
What are the 4 factors of production?
Natural resources
capital
Air
labor
entrepreneurs
A graph that shows the alternative ways to use resources
bar graph
line graph
pie chart
production possibilities frontier
Economic system where central authority is in charge of the economy
market economy
capitalism
privatization
command economy
risk-taking individual in search of profits
regulator
entrepreneur
mixed economy
catalyst
consumer
What is the role of producers?
Make the product
Buy the product
to carry out a government economic program
to increase the profit of other established retail stores
Something essential for survival
Want
Need
Good
Service
The study of how people choose to use limited resources to satisfy their wants
The study of how governments allocates scarce resources to satisfy people's unlimited wants.
Which of the following is not one of the three basic questions economists try to solve?
What should be produced?
How should it be produced?
Who gets what is produced?
When should it be produced?
A public good
can be shared and is excludable
is excludable and isn't shared
can be shared and isn't excludable
isn't shared and isn't excludable
In a monopoly, customers will pay a higher price because there are no alternative products to those of the supplier.
True
False
Why might the government institute a price control?
to allow monopolies to exist.
to raise the prices of all goods.
to help curb inflation and create balance in the marketplace.
to favor businesses they support.
Define Antitrust legislation
How does the government promote competition?
By allowing businesses to do whatever they want
By providing public goods
By creating laws to regulate/prevent monopolies
By ameliorating negative externalities
What are public goods?
Goods and services provided by the government for everyone to enjoy
Goods and services provided by private companies
Goods and services that can be denied to a particular subset of the population
Goods and services that are highly profitable
Why does the government set market standards?
To issue income tax refunds
To promote uncertainty
To eliminate the need for taxes
To ensure fair and consistent measurements
In order to correct an instability in the US economy, the government can (there are TWO correct answers; choose both)
Increase or decrease taxes
Increase or decrease spending
Change the discount rate
Go back on the gold standard
This kind of policy is used by government at the federal, state, and local levels to regulate economic growth
Fiscal policy
Physical policy
Monetary policy
Tariffs
Policies used by the Federal Reserve to regulate the money supply
Monetary policy
Fiscal policy
Taxes and tariffs
Currency
Water, Wood, Oil and rocks are all examples of what type of resource?
Natural
Capital
Human
Which of these productive resources includes factories, tools, trucks, machines, and computers?
Natural
Capital
Human
A teacher who provides a service is an example of a.....
Natural Resource
Human Resource
Capital Resource
All of the above
A sewing machine would be an example of a .....
human resource
capital resource
natural resource
none of the above
In which of these situations would a manufacturer decide to produce more units?
The marginal cost is greater than the marginal benefit.
The wants are less than the needs.
The marginal benefit is less than the marginal cost.
The marginal benefit is greater than the marginal cost.
What is the act of giving up one benefit in order to gain another, greater benefit?
scarcity
opportunity cost
trade-offs
want
What is the term used to describe a temporary low supply of a good or service?
need
scarcity
shortage
want
A point inside of the production possibilities curve would indicate which of the following?
an increase in production
a decrease in technology
a decrease in available resources
available resources that are remaining idle/unused
Efficient production exists when the economy is
operating underneath its production possibilities curve
operating on its production possibilities curve
operating outside its production possibilities curve
in a recession
A person who purchases a good or service
consumer
taxes
supply
good
A cost and benefit analysis refers to the positive and negative effects making a certain decision
True
False
Someone who buys or uses goods and services.
producer
services
consumer
This is where buyers and sellers exchange goods and services.
government
economics
market
What type of economy is based on trading and bartering?
Socialist
Traditional
Free Enterprise
Command
Which of the following leads to an increase in supply?
Gallery Furniture will raise prices on all wood furniture
six new companies begin producing smart phones
price of a complementary good goes down
increased cyclical employment
When producers offer more of a good as its price increases and less as its price falls, this defines the
law of demand
law of supply
change in demand
change in supply
The Law of Supply states that when the price of a good DECREASES, quantity supplied (Qs)...
Increases
Decreases
Which of the following are examples of substitute goods?
Pens and pencils
Tea and coffee
Gasoline and cars
Peanut butter and jelly
Anything that affects the buying decision, other than the product's price, will change demand. These are determinants of demand.
True
False
What changes quantity demanded?
Consumer tastes and preferences.
Price of a complementary good.
Price of a good.
Price of a substitute good.
The Law of Demand states that when the price of a good DECREASES, quantity demanded (Qd)
Decreases
Increases
The Law of Demand states that when the price of a good INCREASES, quantity demanded (Qd)
Decreases
Increases
Hot wings and ranch represent which type of goods?
Substitute goods
Complementary goods
According to the law of supply, as prices increase, quantity supplied will _____
increase
decrease
remain the same
change occasionally
The law of supply says that there is a ________ relationship between price and quantity supplied.
inverse
direct
no relationship at all
The __________ effect occurs when changes in price affect the purchasing power of customers. They can purchase less with the money they have.
law of diminshing marginal utility
substitution effect
income effect
____________ is another word for utility.
supply
demand
satisfaction
As you consume a product or service, you will eventually get less additional utility from each unit consumed. This is called the _______
income effect
law of diminishing marginal utility
substitution effect
The entire demand curve can only shift if something other than price changes.
True
False
Which of the following is NOT a shifter of demand?
tastes/preferences
number of consumers
price of related goods
income
taxes
What is a Sole Proprietorship?
A business where 2 or more people share ownership
A business owned by shareholders
A business that is owned by one individual
Business owned by shareholders is
Partnership
Sole proprietorship
Corporation
Franchise
Google, Amazon, and Facebook are examples of...
Sole Proprietorships
Partnerships
Corporations
What is an entrepreneur?
Risk-taking individuals who introduce new products or services in search of profit; one of the four factors of production.
People with all their abilities and efforts; one of the four factors of production.
Cost of the next best alternative use of money, time, or resources, when one choice is made rather than another.
Alternative that must be given up when one choice is made rather than another.
All firms in a __________________________ market must accept the market price and are called price takers.
pure competition
monopolistic competition
oligopoly
monopoly
Check all of the market structures that have a high barrier to entry:
Pure competition
Monopolistic competition
Oligopoly
Monopoly
Which market structure would be easy to enter, but require lots of advertising to differentiate the new product?
Pure competition
Monopolistic competition
Oligopoly
Monopoly
A dividend is a portion of a company’s profit paid out to
the government for taxes
shareholders of the company
each partner of the business
the sole proprietor
Which of the following is a disadvantage of a sole proprietorship?
limited lifespan
high taxes
legal constraints
difficult to start up
Stocks are:
promises to repay a loan.
also known as bonds.
issued by sole proprietorships.
shares of ownership of a corporation.
Most large businesses are
sole proprietorships.
general partnerships.
corporations.
cooperatives.
Advertisements and giveaways are examples of _______________________.
collusion
non-price competition
price-fixing
price leadership
Liability is the
necessity to do a lot of paper work.
requirement to offer fringe benefits.
legal obligation to pay debts.
opportunity of the sole proprietor to keep all profits after taxes.
An industry comprised of four firms, each with about 25 percent of the total market for a product is an example of:
monopolistic competition
oligopoly
pure monopoly
pure competition
A one-firm industry is known as:
monopolistic competition.
oligopoly.
monopoly.
perfect competition.
Franchisors usually provide all of the listed items except....
Advertising
Training
Loan
Equipment
The Red Cross, museums, National Education Association and labor unions are all examples of
Non-profit organizations
S corporations
consumer cooperatives
producer cooperatives
Which of the following is a characteristic of a corporation?
Ownership through shares of stock
Owned by a single individual
Unlimited liability for owners
Limited lifespan
In a partnership, who is responsible for the debts of the business?
No one is responsible
Only the partner who signed the contract
All partners share responsibility
Only the managing partner
Which of the following industries is an example of a monopoly?
utilities/water
department stores
auto industry
commercial airlines
Public utilities are an example.
Perfect Competition
Natural Monopoly
Monopolistic Competition
Oligopoly
A market that has a few sellers of basically the same goods.
Perfect Competition
Pure Monopoly
Monopolistic Competition
Oligopoly
A plan of your expected income and how you will use it to meet your expected expenses over a period of time
income
budget
plan
statement
Expenses that are essential for you to be able to live and function
wants
cost of living
needs
variable expenses
A fee paid to you for keeping your money in an account OR a fee charged to you for a loan or credit card
maintenance
annual percentage (APR)
insurance
interest
Money you put into your account
deposit
balance
income
expense
A measurement of your assets minus your liabilities is ____________.
spending money
net worth
liabilities
payments
The amount of money you have in your bank account
balance
deposit
income
credit
A fixed amount that you are paid over a period of time, regardless of how many hours you work
budget
revenue
wage
salary
Items or services you pay for such as rent, groceries, entertainment, bills, etc.
credits
expense
liability
revenue
Protects the deposits of customers against loss up to $250,000 per account
FDIC insurance
life insurance
home insurance
renters insurance
A card that allows the holder to make purchases without cash by borrowing money
Credit Card
Debit Card
Apple Pay
Google Pay
Developing a personal budget is an effective way to:
calculate assets
increase debt
pay bills
manage money
Which of the following is a variable expense that Jake must consider when developing his personal budget:
Anticipated salary increases
Unexpected car repairs
fixed car-loan payments
homeowner insurance premiums
Which of the following is a possible consequence of having one's identity stolen
homelessness
unemployment
need for new identity
damage to credit history
When Charles receives a check four times a year for income he has earned on his stock investments, he is receiving
deposits
cash
dividends
credit
The disadvantage to using credit cards to pay for goods and services is that you
defer cash payments
pay interest on purchases
establish a credit rating
earn quarterly dividents
the price of a good is affected when there is a change in consumer income.
Scarcity arises because all societies have
limited productive resources to satisfy unlimited wants
unlimited productive resources to satisfy limited wants
limited needs and unlimited wants
unlimited needs and limited wants
Which of these is the fundamental human resources on which labor is based?
skills
intelligence
productive capacity
time
Most economies today are
pure command economies
pure market economies
traditional economies
mixed economies
Which of the following is not true of a pure market economy?
resource owners have property rights
markets are regulated by government
prices guide resources to the most productive use
markets answer the what, how, and for whom questions
A public utility is
any company whose records are open to the public
a government owned and regulated monopoly
an individually owned monopoly whose records are open to the public
a company owned jointly by the citizens of the community
Long-lasting monopolies are rare because
they are generally outlawed by the government
there is too much foreign competition
a profitable monopoly attracts competitors and substitutes
consumers avoid buying from monopolies because of higher prices
Which of the following is NOT a determinant of supply?
producers expectations
technology used to make the good
consumer expectations
the number of sellers in the world
A market sorts out the conflicting views of price between demanders and suppliers. In short, markets _______.
reduce transaction costs
increase transaction costs
have little effect on transaction costs
eliminate transaction costs
The law of comparative advantage helps explain
opportunity costs
how economists work
why a person talented in many things can get more done by specializing
why some products do better than others
A surplus causes
new workers to be hired
producers to increase their price to the equilibrium price
consumers to pay more for goods
producers to lower their price to the equilibrium price
Elasticity of supply indicates
how quickly producers can provide a product
how responsive producers are to a change in price
how much the product costs
how many products are in stock
Which of these explain why a homeowner would pay more on a weekend to have a furnace repaired?
time price of this service
money price of this service
relative price of this service
dollar price of this service
With supply, the assumption is that producers try to maximize utility.
True
False
Lenders typically charge higher interest on car loans than on something like home loans because houses do lose their value and cars do.
True
False
There are 2 ways to earn a return from owning corporate stock: 1) stockholders may receive a dividend or 2) if they sell the stock for more than they paid for it, they earn a capital gain.
True
False
Goods and services are bought and sold in a resource market.
True
False
Private corporations account for the overwhelming share of corporations in the US.
True
False
