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Unit 7 Final Exam Review - Basics of Economics

Total questions: 27

Worksheet time: 14mins

Name
Class
Date
1.

  1. Scarcity is defined as “a limited supply of resources and…”

a)

  1. Limited wants for those resources

b)

  1. Limited resources

c)

  1. Unlimited resources

d)

  1. Unlimited wants for available resources

2.

  1. Why do we have to make production choices about available resources?

a)

  1. Too many resources for the demanded

b)

  1. Unlimited resources

c)

.Limited wants

d)

  1. Scarcity

3.

  1. Economics is the study of how

a)

  1. Governments allocate resources to satisfy citizens’ unlimited wants

b)

  2. People use their scarce resources to satisfy their unlimited wants

c)

  1. Governments supply money to businesses to produce goods and services

d)

  1. Businesses supply unlimited goods and services with limited resources

4.

  1. Opportunity cost is the value of the _______ that had to be given up if the alternative was chosen

a)

  1. All the items

b)

  1. The next best alternative

c)

  2. The least important alternative

d)

  1. Everything except the item chosen

5.

  1. Nemo is studying for his math test but his favorite show just started. If he continues to study for his math test he will miss out on watching is show. Nemo decides that studying for the math test is more important than watching his favorite tv show. In this scenario, what is the opportunity cost?

a)

  1. Studying for the quiz

b)

  1. Eating dinner

c)

  1. Watching TV

d)

  1. Taking a nap

6.

  1. Because of scarcity, people are forced to make _______ about how to utilize their resources

a)

  1. Scarcity

b)

  1. Opportunity cost

c)

  1. Needs

d)

  1. Supply lists

7.


  1. What is a production possibility curve?

a)

  1. A graph that shows how efficient an economy can produce a combination of two goods

b)

  1. A graph showing supply and demand within a country

c)

  1. A graph showing the needed price ceilings and price floors needed to obtain an equilibrium price

d)

  1. A graph showing the inefficiency of producing multiple goods over a period of time

8.


  1. Janet wishes to increase the productivity of her art design studio. In order to do so, she is considering buying more technology and also hiring additional employees. As both investments would require considerable capital, Janet wants to make sure she has carefully considered the direction her company should take based on changing trends in technology and the labor force. Which of the following tools might help her make the best decision for her company?

a)

  1. A supply graph

b)

  1. A production possibility curve

c)

  1. A demand graph

d)

  1. A circular flow model

9.


  1. The process of quantifying the costs and benefits of a decision is known as

a)

  1. Circular flow theory

b)

  1. Equilibrium analysis

c)

  1. Cost-Benefit analysis

d)

  1. Supply-Demand analysis

10.

  1. If the _________ is __________ than the next step should be taken.

a)

  1. Marginal benefit; greater; marginal cost

b)

  1. Total benefit; greater; total cost

c)

Marginal benefit; less; marginal cost

d)

  2. Total benefit; less; total cost

11.

  1. A production possibilities table lists a choice’s ___________ by summarizing what alternative outputs you can achieve with your inputs.

a)

  1. Equilibrium

b)

  1. Scarcity

c)

  2. Opportunity cost

d)

  1. Margin

12.

  1. A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in 

a)

  1. A decrease in the equilibrium quantity of eggs and no change in the equilibrium price. 

b)

  1. A decrease in the equilibrium price of eggs and no change in the equilibrium quantity. 

c)

  1. A decrease in the equilibrium price of egg; the equilibrium quantity may increase or decrease. 

d)

  1. A decrease in the equilibrium quantity of eggs; the equilibrium price may increase or decrease.

13.

  1. When Toyota introduced its 2010 Prius, it announced that the average retail price of the 2010 model would be lower than the average retail price was for the equivalent 2009 model. Which of the following would explain the price differential? 

a)

  1. The demand for the Prius had increased, and the supply of the Prius remained unchanged. 

b)

  1. The supply of the Prius had decreased, and the demand for the Prius remained unchanged.

c)

  1.  

  2. The demand for the Prius had decreased, and the supply of the Prius had increased. 

d)

  1. The demand for the Prius had increased, and the supply of the Prius had decreased

14.

  1. Selena Gomez is seen wearing a new fit and flare dress at the Grammys. People now want this dress. Which demand determinant is this most likely to fall under

a)

  1. Change in income

b)

  1. Change in the price of a substitute good

c)

  1. Change in preferences

d)

  1. Change in Future price

15.


  1. If an airline expects ticket prices to drop in September when families are less likely to travel due to school, they will supply more flights during the summer months when they can charge a higher fare. Identify the correct determinant of supply.

a)

  1. Change in the factors of production

b)

  2. Expectations

c)

  1. Change in the number of sellers

d)

  1. Change in technology

16.


  1. Labor is considered a significant part of the resource market because labor constitutes the majority of resources used in production. If the U.S employment rate for 2020 was 14%, due to complications arising from the COVID outbreak, which of the following statements is true? 

a)

  1. The supply of labor exceeded the demand for labor

b)

  2. The demand for labor exceeded the supply of labor

c)

  1. There was an equilibrium of labor supply and demand

d)

  2. 14% is the natural unemployment rate expected in the USA

17.

  1. Amazon is a good example of a product market because…

a)

  1. Amazon acquires factors of production based on demand

b)

  1. Amazon offers goods and services to consumers based on demand

c)

  3. Amazon leases out land based on market demand

d)

  1. Amazon acts a government entity regulating factor markets

18.

  1. In which type of economy does the government maintain control of everything?

a)

  1. Traditional

b)

  1. Market

c)

  1. Mixed

d)

  1. Command

19.

  1. What economic system is based on supply and demand?

a)

  1. Traditional

b)

  1. Market

c)

  1. Mixed

d)

  1. Command

20.


  1. The concept that people have the right and privilege to control their possessions as they wish.

a)

  1. Legal equity

b)

  1. Private property

c)

  1. Open opportunity

d)

  1. Profit incentive

21.

  1. In the 18th century, Britain decided to ship convicts to Australia. The transportation was privately provided but publicly funded. A lot of convicts died along the way due to disease and overall poor conditions on the boat. On one ship in particular, 37% of convicts aboard the vessel died. How might Britain have decreased the number of convict deaths on the passage to Australia? 

a)

  1. Passed convict health laws

b)

  1. Educated Captains on general health and safety measures

c)

  2. Provided incentive pay to captains for every convict who lived

d)

  1. Upgraded the ships making the passage to Australia

22.

  1. All of the following are common measures of a country’s economic growth except

a)

  1. Gross Domestic Happiness

b)

  1. Gross Domestic Product

c)

  1. Inflation

d)

  1. Unemployment

23.

  1. A good measurement of price stability is?

a)

  1. Quantity demanded

b)

  1. Quantity supplied

c)

  1. Inflation

d)

  1. Unemployment

24.


  1. __________ is often enacted to stabilize the business cycle and is either expansionary or contractionary depending on what is happening in the private sector.

a)

  1. Circular Flow Theory

b)

  2. Supply Policy

c)

  1. Fiscal Policy

d)

  1. Command Economics

25.

  1. All of the following are common factors of Fiscal Policy EXCEPT

a)

  1. Tax rates

b)

  1. Rates of government spending

c)

  1. Changes to interest rates

d)

  1. Changes to total equilibrium

26.


  1. The Federal Reserve…

a)

  1. Regulates the amount of money in circulation

b)

  1. Provides financial services to banks and the public

c)

  1. Supervises banks

d)

  1. All of the above

27.

  1. If the Federal Reserve decides to increase the supply of money, what will naturally follow?

a)

  1. Deflation

b)

  1. Inflation

c)

  1. Increased unemployment

d)

  1. Decreased unemployment

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