WorksheetsEconomics Final Exam
Total questions: 60
Worksheet time: 35mins
Which rate of unemployment is expected in a healthy economy (full employment)?
0–1%
4–6%
8–10%
12–15%
What is the main incentive producers have to sell their products in a market economy?
Profit motive
Pleasing the customer
Shutting down other businesses
Popularity of product
Land, labor, capital and entrepreneurship are the ______ ________.
Basis of employment
Results of production
Factors of production
Results of supply and demand
Which of the following financial intermediaries is owned by its members and provides loans at lower interest rates?
Bank
Credit Union
Payday lender
Title pawn lender
When you are investing money, what is the best type of interest to seek on your earnings?
Variable
Compound
Fixed
Simple
What type of unemployment is typical during a contractionary phase of the business cycle?
Frictional
Structural
Cyclical
Seasonal
Which type of cost occurs when an individual pays for a piano lesson instead of going to a movie?
Fixed cost
Marginal cost
Residual cost
Opportunity cost
Which sentence describes the risk and returns of investing in stocks?
They offer the lowest risks and the lowest potential returns.
They offer the highest risks and highest potential returns.
They offer the lowest risks, but the highest potential returns.
They offer the highest risks, but the lowest possible returns.
Banks aim to make a profit. To achieve this, they:
Receive donations from members of the local community.
Sell shares of other companies on the open market.
Charge interest on loans.
Rely solely on ATM service fees.
The basic economic condition that exists when unlimited wants exceed limited productive resources is called ________.
Capital
Scarcity
Hyperinflation
Opportunity cost
The BEST example of a regressive tax in the U.S. is:
personal income tax
sales tax
luxury tax
property tax
What potential effect can government regulation have on consumers?
Improve profits for producers
Protection to ensure safe and quality products
Lower costs for consumers
Decrease innovation among producers
If the state of Georgia increased that sales tax rate from 6% to 9%, what group of people would be hurt the MOST?
high income workers
skilled laborers
low income workers
trained professionals (lawyers, teachers, etc.)
A tax for which the percentage of taxes paid goes down, because all income levels pay the same amount is ...
Progressive
Regressive
Regulated
Proportional
Which type of insurance does a person need if they wish to continue to receive a paycheck while they are out of work due to an injury?
Life
Disability
Health
Property
Use the graph below to answer the question that follows. A company produces two products, X and Y. All of the points represent possible product outputs EXCEPT
Point A
Point B
Point C
Point D
The property that is used to secure (get) a loan is called ____.
Collateral
Interest
Premium
Deductible
Using the table Average Earnings per Education Level, on average, about how much more do females with a bachelor's degree make over female high school graduates? Use these table values for females: High School Graduate 13,950;Bachelor′sDegree 30,913.
about $2,400
about $26,000
about $17,000
about $37,500
The unemployment rate is a(n)
externality indicator
accelerator indicator
economic indicator
production indicator
Which of the following is most likely when the business cycle is in a trough?
Unemployment is high
Inflation is high
Interest rates are rising
Standard of living is rising
Which market structure is typically characterized by a large number of producers selling similar, but differentiated products?
Monopolistic competition
Perfect competition
Oligopoly
Monopoly
Use the graph below to answer the question that follows. Which of the following would cause the PPC to shift to the right? The graph shows a downward-sloping production possibilities curve between Production of Basketballs (vertical axis) and Production of Whoopee Cushions (horizontal axis).
Improved technology in making whoopee cushions
an increase in prices
shortage of required resources
higher labor costs
What is the difference between government deficit and national debt?
Government deficit is a yearly discrepancy; national debt is accumulated over time
Government deficit is solved by taxation; national debt is solved by taking out loans
Government deficit is caused by poor laws; national debt is caused by too many taxes
Government deficit is money owed to other countries, national debt is a shortage of currency
Which action demonstrates change in the government's fiscal policy?
an increase in the price of good
a decrease in unemployment
a decrease in collected revenue
an increase in taxes
If the federal government spends more than it collects in revenue, then
It is running a surplus
It is running a deficit
The inflation rate should decline
The unemployment rate may increase
Tom decides to stay home Saturday afternoon instead of going to the $10 movie with his friends. What is the marginal benefit?
He spends $10 at the movie
He loses time with friends
He spends time with friends
He saves $10
The Open Market Committee of the Federal Reserve System __________________
votes to either increase or decrease taxes
directs policy regarding the stock markets, commodity markets, and futures exchanges
votes to increase or decrease federal spending
directs the buying and selling of government securities in order to expand or contract the amount of money in the banking system
A farmer sells a truckload of grain for 1000$. He then takes the cash to the tractor dealer and buys a new set of tires for his cultivator. This illustrates that one function of money is to be a:
medium of exchange
measure of value
store of value
bartered item
What is the primary purpose of job specialization?
regional self-sufficiency
increased consumer income
increased marginal utility
Increased efficiency and productivity
The government determines economic growth from one year to the next by
using the nominal inflation rate
comparing the CPI
using real GDP
looking at the trade deficit
Use the statement box below to answer the question that follows. Sean decided he no longer needs his smartphone, but would really like a small camera. Sarah, on the other hand, has a small camera she is not using and desperately needs a smartphone. They agree to trade each other their unwanted goods for those that they want and need. The scenario above could BEST be described as ___________.
law of supply
law of demand
equilibrium price
Voluntary exchange
In a market economy, prices are established by
The government
Producers and consumers
Labor unions
Business because they buy and sell the products
According to the graph above, __________ would most likely cause the movement from D0 to D1.
decrease in the price of intermediate goods
increase in the price of related goods
increase in consumer preference for this product
increase in price of substitute goods for this product
The Law of Supply states that when prices _______________.
increase, supply increases
increase, quantity demanded decreases
decrease, quantity supplied decreases
decrease, quantity supplied stays the same
A shift in the demand curve will occur when there is a change in the number of ____________.
Producers
Consumers
Businesses
Suppliers
In which type of business organization does the owner have the MOST liability?
monopoly
Corporation
Partnership
sole proprietorship
Ms. Johnson’s class is having a bake sale, and very few people are buying cupcakes. Which is the best way for the class to SELL cupcakes?
Raise the price.
Lower the price.
Make more cupcakes.
Eat the extra cupcakes.
According to the Law of Demand, as the price of gasoline increases in Oregon, motorists SHOULD
Begin to use more gasoline
Begin to use less gasoline
Use the same amount of gas
Completely stop driving cars
The three most common types of business organization are _______________.
sole proprietorship, partnership, and monopoly
nonprofit organization, partnership, and corporation
sole proprietorship, partnership, and corporation
sole proprietorship, franchise, and cooperative
Which transaction below will take place in the product market on a circular flow diagram?
Smithville Farm's purchase of 3 new tractors.
The Pencil Company pays yearly taxes.
Jenny's posting of her resume on a website.
Chris' purchase of a new video game.
Trade between nations can be mutually beneficial if one country has ______.
a monopoly
an absolute advantage
a comparative advantage
a protective tariff on imports
A country has a comparative advantage if it has the ability to produce a product relatively more efficiently or at a lower ____.
Fixed cost
Opportunity cost
Rate of return
Tax rate
The price of one nation’s currency in terms of another nation’s currency is called
Fiscal policy
Monetary policy
The exchange rate
The discount rate
For what reason might a nation apply tariffs on imported goods?
To protect domestic producers from competition
To improve trade with other nations
To encourage consumers to spend more money on items made abroad
To increase the quantity of manufacturers brought into the country
All of these restrict international trade EXCEPT
Quotas
Standards
Embargoes
Trade deficit
The government determines economic growth from one year to the next by
using the nominal inflation rate
comparing the CPI
using real GDP
looking at the trade deficit
If a nation’s balance of trade is in a deficit, that country is
spending more money on imports than it is receiving for exports
strengthening the value of the dollar overseas
exporting more goods than it is producing
producing more goods than it is importing
What happens in the market for railroad travel when the price of traveling by air decreases?
The supply curve shifts left.
The demand curve shifts right.
The supply curve shifts right.
The demand curve shifts left.
Which is NOT an example of why entrepreneurs take risks?
Make a profit
Decrease competition
Increase innovation
Job creation
Use the graph below to answer the question that follows. The trade off to move from point A to point B is
Increase in the production of D
Increase in the production of C
Increase in the production of X
Increase in the production of Y
Matching: Match each term with its correct definition.
Entrepreneurship - (a)
Specialization - (b)
Opportunity Costs - (c)
Factors of production - (d)
Scarcity - (e)
Matching: Match each term with its correct definition.
Standard of living
The material well-being that people in an economy enjoy.
Command economies (Centrally planned)
The central government makes all decisions about the production and consumption of goods and services.
Production possibilities curve
The line that shows the maximum possible output for that economy.
Market Economies
Economic decisions are made by individuals and are based on voluntary exchange.
Consumer Sovereignty
Businesses produce what consumers are willing to buy. consumers are the ones who really determine what is produced in a market economy.
Matching: Match each term with its correct definition.
Equilibrium price
Point where quantity supplied and quantity demanded are the same.
Price Ceiling
The government sets a maximum price at which a good can be sold and typically causes a shortage.
Law of Demand
As price goes up, demand goes down and as price goes down, demand goes up.
Law of supply
Price goes up, supply goes up, and as price goes down, supply goes down.
Price floor
The government sets a minimum price for how much a product can be sold for and typically causes a surplus.
Matching: Match each term with its correct definition.
Sole Proprietorship
Business owned by only 1 person.
Shortage
Demand exceeds supply.
Market failures
Occur when the private market is unable to produce goods and services with a marginal benefit that is equal to or greater than the marginal cost to society.
Barrier to entry
How difficult it is to get into a market.
Corporations
Business owned by shareholders (stockholders).
Match each term to its correct definition.
Aggregate Supply and Demand
The demand or supply for all goods and services in the economy at different price levels.
Fiscal Policy
Taxing and spending by the government to influence the economy.
Gross Domestic Product
The total value of all final goods and services produced by a country during a year.
Monetary Policy
Tools used by the FED to stabilize the economy.
Consumer Price Index
Measures inflation by determining how the cost of a standard group of consumer goods (or “market basket”) has changed over time.
Match each term to its correct definition.
Standard
Rules that the government sets to ensure the safety of imported goods and to make sure those goods comply with local laws.
Embargo
When a government completely prohibits the import of an item.
Subsidy
Payments that the government makes to a local supplier to reduce the production costs for the supplier.
Quota
Limits the amount of a good that is allowed into the country.
Tariff
A tax on imported goods.
Match each term to its correct definition.
Progressive Tax
Tax rate increases as income increases.
Credit Worthiness
Likelihood of a borrower to repay—based on factors such as history of repayment, credit score, and current debt.
Savings
Monetary deposits secured for a later, undetermined use.
Proportional Tax
Everyone pays the same percentage of their income.
Investment
Using money in a way that carries an expectation of some future return or benefit.
Types of Unemployment
Frictional Unemployment
Trying to find a job.
Cyclical
Unemployment
Mirrors Economy
Seasonal Unemployment
Mirrors the seasons demands
Structural Employment
Skills do not match available jobs
Under Employment
Working but still not making enough.
If the price of concert tickets for Maya's favorite band increases, what is likely to happen to the demand for those tickets?
Demand will increase
Demand will decrease
Demand will stay the same
Demand will become unpredictable
