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Economics Midterm Exam Flashcards | StudBud
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Economics Midterm Exam
Economics Midterm Exam
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Questions
30
Answers
1
Which best describes the difference between preferred and common stock?
C.S.=priority for dividends, P.S.= no dividends
P.S.= priority for dividends, C.S.= no dividends
P.S.= vote for a board, C.S.= no voting
C.S. = 1 vote per share, P.S.= no voting rights
2
Which statement best explains the law of supply?
Qty supplied by producers increases as prices rise
Qty. supplied by producers decreases as prices rise
Qty supplied by consumers decreases as prices rise
Qty supplied by consumers increases as prices rise
3
Resources needed to provide goods or services are called
facts of production
functions of production
factors of production
facets of production
4
Assessing opportunity cost involves
reviewing past decisions and changing them
minimizing profit and loss
making choices and dealing with the consequences
choosing consequences over rewards
5
Put the stages of the business cycle in the order in which they occur.
depression, recession, recovery, prosperity
prosperity, recession, depression, recovery
recession, depression, prosperity, recovery
recovery, prosperity, recession, depression
6
Which of the following has the largest impact on opportunity cost?
limited resources
consumer wants
consumer needs
tight deadlines
7
How do changing prices affect supply and demand?
as price decreases, supply decreases, but demand increases
as price increases, supply decreases, but demand increases
as price increases, both supply and demand increase
as price decreases, both supply and demand decrease
8
A basic concept in economics is that all resources are
valuable
renewable
limited
allocated
9
A company sells an item for $45. Expenses are $15. What is the profit after 10 are sold?
$300
$400
$450
$350
10
Which best describes the availability of substitutes in a monopoly?
Products have different features
There are different brands
There are no substitutes
Price points vary
11
Which is the best definition for inflation?
gradual reduction in the price of goods and services
a gradual expansion in the price of goods and services
an exponential expansion in the price of goods and services
an exponential reduction in the price of goods and services
12
A mixed market economy tends to exist under a
democratic-some regulation
communist- little regualtion
representative-no regulation
socialist-lot of regulation
13
The aim of the study of macroeconomics is to examine
the relationship between supply and demand
the economy's viability
interactions between individual producers and consumers
the economy's behavior
14
Which statement best describes the impact of scarcity?
Economics can work to provide more goods and services
Govt. must try to meet the wants of citizens
Consumers must pay higher prices for many items
People meet most needs
15
Which situation is the best example of competition?
A federal agency is created to monitor prod. of supplements
a new restaurant near a theater - people go eat after movie
Small CD store cuts prices to get customers from a lg store
a shoe store offers a special for health club customers
16
What gives the U.S. Government the power to collect taxes?
an executive order
laws passed by Congress
The Constitution
common law
17
Which nation has a communist command economy?
Cuba
the United States
South Korea
North Korea
18
What area of economics focuses on the interactions between individual consumers and producers?
markets
aggregates
macroeconomics
microeconomics
19
Which completes the equation?
production cost, profit, revenue
profit, revenue, production cost
production cost, revenue, profit
revenue, profit, production cost
20
A plan for spending money is
a deficit
a surplus
an expenditure
a budget
21
Which point indicates an inefficient allocation of resources?
X
Y
C
B
22
Which best shows the importance of addressing the 3 ques. of econ. ?
Businesses need to use limited resources wisely
Businesses need to limit production
People's desires and needs are always changing
Traditional methods of production are outdated
23
The most common business organizations in the U.S. are
corporations
sole proprietorships
partnerships
franchises
24
What is a person concerned with when they are worried about paying all the bills?
wants and limits
needs and wants
needs
limits
25
An entrepreneur is someone who
starts and runs a business
invents products for other businesses
is an employee of a business
works for multiple developing businesses
26
Govt. regulation is intended to
encourage producers to take negative actions
discourage producers form taking harmful actions
discourage producers from making a profit
encourage producers to follow the Constitution
27
The point where supply and demand meet and prices are set is called
coordination
correspondence
equality
equilibrium
28
How do lower prices tend to affect demand?
increase interest in a product
decrease the availability of a product
Increase availability of a product
decrease interest in a product
29
In economics, if a good is inelastic,
Consumers have lost interest
its supply and demand is not sensitive to price changes
producers have lost interest
its supply and demand is too sensitive to price changes
30
The most common economic system in the world is a
closed economy
market economy
command economy
traditional economy
