A demand curve shifts tothe left when

people are willing to buy fewer items at all possible prices

Which of the following is a drawback of having credit?

spending more than you can afford by using available credit

Private property rights promote capitalism by

providing incentives tomake, save, and spend money.

What is financial capital?

money needed to start and operate a business

Which agency would recall a defective high chair?

Consumer Product Safety Commission

Price fixing occurs when two or more sellers agree

to increase prices by a certain amount.

Which of the following developments would cause the overall demandfor a product to increase

the price of acomplementary product decreases

Which of the following best explains the upward slope of thesupply curve?

High prices motivate suppliers to produce more

A demand curve shifts tothe right when

people willing to buy mor of TheSame item at a given price.

Which of the following statements correctly describes the federal income tax?

Ppl w/ lower income pay a smaller % of their income as taxes

Consumer sovereignty meansthat consumers

determine what productswill be produced.

Money is like a measuring stick because

it can be used to assign value to a good or service

Which of the following BESTdefines free enterprise?

Businesses may competewithout government interference.

Which is most likely to happen when the federal gvmnt spends more than it collects in revenues?

the federal budget will show a deficit

in alternating periods of growth and decrease

Which factor is most likelyto cause the supply of a product to decrease?

a repeal of subsidies for producers

The one characteristic that all financial institutions share is the need to

bring savers and borrowers together

Workers organize labor unions in order to

obtain better pay and working conditions.

Which of the followingrepresents marginal cost?

the cost of producing oneadditional unit

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Economics Final Review 1-75

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Questions 108

Answers

1
The primary motive inbusiness is to
increase profits
decrease productivity
decrease supply
increase prices
2
To keep track of inflation,the government uses the
consumer price index.
NYSE
gross national product.
real GDP.
3
When would most consumers prefer to borrow money?
when the Fed sells bonds
when the Fed buys bonds
when the Fed contracts the money supply
when demand for money increases
4
Economist say that money is anything that people are willing to
transport to marketplaces
divide into smaller units
pull from their wallets
accept in exchange for goods
5
The interest rate is the
percentage of money that banks must keep in reserve
control over the cost of borrowing money
cost of borrowing money
rate charged by the Fed to member banks for loans
6
Which of the followingwords BEST describes the flow of economic activity in a market system?
linear
back and forth
Circular
Sequential
7
A demand curve shifts tothe left when
prices of goods rise.
ppl are willing to buy more of the same item @ a GivenPrice
more consumers enter the market.
people are willing to buy fewer items at all possible prices
8
The loss of years of incomeresulting from the decision to go to college is the
total cost
variable cost
opportunity cost
marginal cost
9
A person is lending money to a company or government when buying
interest
stock.
a bond.
principal
10
A person who loans someonemoney to buy an item is
consumer
lender
investor
borrower
11
An example of a capitalgood needed by someone who builds new homes is a
ceiling fan
faucet
doorbell
screwdriver
12
Which of the following is a drawback of having credit?
learning financial discipline by making monthly payments
AnalyzingFinancialSituation ToSee IfYou CanAfford to charge
spending more than you can afford by using available credit
obtaining something before you have the money to pay for it
13
Private property rights promote capitalism by
permitting consumers to control the product market.
allowing consumers to demand competitive prices.
providing incentives tomake, save, and spend money.
setting limits oncompetition among consumers.
14
What is financial capital?
money needed to start and operate a business
funds that pay health benefits for employees
report of sales, expenses, and profits
investment of volunteer time in local charities
15
The market demand curveslopes downward because prices go
up as demand goes up.
down as demand goes up.
down as demand goes down.
up as demand remains stable.
16
Which agency would recall a defective high chair?
New York Stock Exchange
Consumer Product Safety Commission
Food and Drug Administration
Federal Trade Commission
17
Price fixing occurs when two or more sellers agree
not to bid against each other.
on the level of their bids.
to compete for the lowest price.
to increase prices by a certain amount.
18
Which of the following developments would cause the overall demandfor a product to increase
the product becomes moreelastic
the price of an acceptablysubstitute product decreases
the price of acomplementary product decreases
a drop in consumer income
19
Which of the following best explains the upward slope of thesupply curve?
High prices motivate suppliers to produce more
High prices motivateconsumers to buy more.
Low prices motivatesuppliers to produce less.
Low prices motivateconsumers to buy less.
20
What happens when the sameamount of input, in the same amount of time, produces a more output?
workers lose jobs
productivity goes up
labor costs increase
the GDP goes down
21
A demand curve shifts tothe right when
the number of consumers in the market area decreases.
the average income of consumers in the market area declines.
people willing to buy mor of TheSame item at a given price.
ConsumersAre willing to buy fewer items AtAll PossiblePrices
22
Which of the following statements correctly describes the federal income tax?
Ppl w/ higher income pay a proportional income tax
Ppl w/ higher income pay smaller % of their income as taxes
Ppl w/ lower income pay a smaller % of their income as taxes
Ppl w/ lower income pay a regressive income tax
23
Consumer sovereignty meansthat consumers
set the prices of goods andservices.
practice innovation intheir purchasing strategies
exercise their economicfreedom.
determine what productswill be produced.
24
Money is like a measuring stick because
it can be used to assign value to a good or service
it can be traded
it can be traded for goods and services
banks accept it
25
Which of the following BESTdefines free enterprise?
Individuals may buy andsell property without paying taxes
Buyers/sellers conduct business voluntarily in a marketplace
Individuals may start new business ventures at no cost.
Businesses may competewithout government interference.
26
Which is most likely to happen when the federal gvmnt spends more than it collects in revenues?
the federal budget will show a deficit
state governments will help decrease the national debt
the federal budget will show a surplus
the federal government will decrease sales taxes
27
Which of the followingsells a service rather than goods?
total cost
medical office
clothing mall
ice cream shop
28
Which of these is a free trade agreement among the United States, Canada, and Mexico?
NAFTA
IMF
EU
WTO
29
Which of the followingpairs of products are complements?
pens and pencils
coffee and tea
lightbulbs and lamps
butter and margarine
30
Which of the following isan example of microeconomics?
economics of a government
economics of an individual
economics of an industry
economics of a society
31
When businesses buy goods from other businesses, they arefunctioning in
an employer role.
an arbitrator role.
a producer role.
a consumer role.
32
The economy grows
at a constant decrease
in alternating periods of growth and decrease
at a constant increase
at a constant rate
33
1st pizza slice eaten gives more satisfaction than 2nd and 3rd pieces. This is an example of
diminishing marginalutility
a change in demand
the free market mechanism
opportunity cost
34
Your ____ is the money you earn from all sourcesand your __ are the money you choose to spend.
balance/expenditures
surplus/deficits
income/expenses
collateral/interests
35
Which factor is most likelyto cause the supply of a product to decrease?
decrease in the price of resources used to make the product
a decrease in taxes on businesses
a repeal of subsidies for producers
an increase in the number of suppliers
36
A surplus typicallyindicates that
suppliers cannot meet the demand.
the price is too high.
the market is in equilibrium.
government price controls are needed.
37
The one characteristic that all financial institutions share is the need to
provide full banking services to all customers
bring savers and borrowers together
achieve nonprofit status for their customers
loan more money than their customers deposit
38
What forces people to make economic choices
need for shelter
desire for profit
scarcity of resources
abundance of goods
39
In order to survive, banks must have
credit
investors
depostitors
fees
40
Which of the following is an example of a need?
movies
vacations
swimming pools
fruit
41
The amount you initiallydeposit into an account is the
bond
stock
principal
interest
42
If it costs $100 to producetwo books, what is the marginal cost of producing one more book?
$150
$50
$100
$200
43
One advantage of a sole proprietorship is that the owner
operates with limited liability.
raises financial capital.
draws on the talents of partners.
receives all the profits.
44
Which describes situation - the GDP is falling, unemployment's up&inflation cuts spending.
recession
recovery
decline
prosperity
45
Increasing spending and_____ are examples of fiscal policies.
cutting taxes
cutting jobs
cutting welfare
cutting stocks
46
If 20 bottles of soda aresold for $2.00 each, what is the total revenue?
$10
$40
$22
$2
47
Workers organize labor unions in order to
boycott competitive businesses.
capitalize on the talents of business partners.
obtain better pay and working conditions.
strike a balance between work and leisure.
48
The vertical axis of a demand curve for a product displays
quantities
elasticity
prices
utility
49
Which type of savings pays high interest and allows writing checks against deposited $?
a certificate of deposit (CD)
a savings account
a checking account
a money market account
50
Which of the followingrepresents marginal cost?
wages and raw materials
mortgage payments
the cost of producing oneadditional unit
the sum of fixed costs andvariable costs
51
How do corporations financetheir start-up and operation?
sales of stock
bulk purchases
savings
partnership
52
When an entrepreneur startsa business that fails, the U.S. government typically
grants financial assistance
offers no assistance.
restricts competition.
takes over the business.
53
The resources needed to produce goods and services are called
product markets.
inputs and outputs.
factors of production.
factor markets.
54
On average, income tends to increase as
educational level increases.
educational level decreases.
family wealth decreases.
discrimination increases.
55
Which of the following is true of a regressive tax, such as the tax on gasoline?
wealthy families pay alarger bit of their income on the tax
tax rate for poorerfamilies decreases as they buy more gas
Poorer families pay a largerbit of their income on the tax
taxes for wealthy families decrease as they buy more gas
56
Which of the followingcauses a change in demand?
cost of resources
taxes on businesses
number of consumers
government subsidies
57
Scarcity affects the global community by
encouraging international trade
promoting command economies
discouraging international trade
creating quotas
58
According to rationaleconomic decision making, we should accept an option when
the benefits outweigh thecosts
there are no benefits.
the costs outweigh thebenefits
there are no costs
59
Which of the following would be most likely to happen when morejobs become available?
fewer people will collect unemploymentpayments
fewer people will becomeeligible for social
more people will join theMedicaid program
more people will move intoa lower income tax bracket.
60
What is a budget?
the ability to pay laterfor something that you receive today
a careful record of all themoney that you earn and spend
the amount of money leftover after subtracting expenses
a monthly payment thatteaches you financial discipline
61
Which of the following is true of a regressive tax on gasoline?
Poorer fams pay a larger part of their total income on this
The tax rate for poorer fams decreases as they buy more gas
Wealthier fams pay a larger pt of their total income on this
Tax rate for wealthier fams decreases as they buy more gas
62
What is economics?
the study of how peoplemake decisions with limited resources
the financial well-being ofa country
the way a society organizes the production of goods
the goods and services acountry produces
63
Which of these terms describes someone whostarts a new business/introduces a new product?
human resources manager
laborer
entrepreneur
production factor
64
Which example illustrateshow changes in substitutes can influence demand?
demand for DVDsdeclines when the price of DVD players rises.
demand for PC software declines when PC prices rise.
demand 4 Fords increases when the price of GM cars increases
demand 4 tennis ballsincreases when PriceOf racketsDecreases
65
Individuals have the most influence in a
socialist economy
communist economy
mixed economy
pure market economy
66
Freedom of Individuals and Business to operate with minimum government regulation
Antitrust Law
Free enterprise
Fiscal Policy
Competition
67
Choosing to buy a DVDplayer instead of something else is an example of
scarcity
a trade-off
total cost
macroeconomics
68
A change in price wouldhave the LEAST affect on market demand for which product?
Theater Tickets
Blood Pressure Meds
Flat Screen TV
New Car
69
The horizontal axis of a demand curve displays
elasticity
prices
quantities
utility
70
Another benefit toinvesting in stocks is that
they have a guaranteed return.
an investor can sell stocks at any time with a sure profit.
their value is backed by the government.
you own a part of the company in which you invest.
71
The extra revenue thatresults from selling one more unit of the output is the
average total cost
total revenue
marginal benefit
marginal revenue
72
A company makes a decision to drop AProduct from its line. This decision was MOSTlikely due to
study that showsmore could be made more quickly by machine
cost-benefit analysis shows no profitability
rise in cost of materials
elastic demand for item makes it difficult to set price
73
What is the main purpose ofgovernment price controls?
to correct unfairness insupply and demand
to increase taxes
to create surpluses
to give producers an edgeover consumers
74
Demand is likely to beinelastic for goods that
can be purchased at a latertime.
have many substitutes.
are very expensive.
have very few or nosubstitutes.
75
Which method might a business use to encourage union workers to accept a contractterms
boycott
strike
lockout
double taxation
76
Specialization helpsimprove productivity because it allows businesses to
focus on what they do best.
divide large jobs intosmall, separate tasks.
offer incentives toworkers.
become self-sufficient.
77
An example of mandatory spending by the federal government is the money used for
social security benefit checks
national defense
military operations
highway construction
78
An electric company that serves an entire state is an example of a
public good
fiscal policy
merger
natural monopoly
79
Demand for a product tendsto increase when
consumers expect a shortage.
the price of a complement increases.
consumers expect a surplus.
the price of a substitute decreases.
80
The Federal Reserve System's Board of Governors is independent so that it may
govern the 12 regional districts
buy stock in the Federal Reserve
make decisions without political pressure
function as a full service, international bank
81
Property put down assecurity for a loan is known as
dividend
collateral
charge
budget
82
In the USA, prices are established primarily through
government regulations.
the decisions of major corporations.
the forces of supply and demand.
tax incentives.
83
According to thelaissez-faire philosophy of economics, government should generally
help small and largebusinesses alike.
encourage foriegn trade
support laborers
stay out of the marketplace
84
What is an example of a resource?
house
wood
fence
deck
85
The demand for goods andservices in a particular area would probably increase if
a new apartment building in the area filled with families.
a large number of residents moved out of the area.
people expected hard economic times.
people’s incomes decreased.
86
Which factor has the MOST significant influence on the quantitysupplied of any product?
availability of complements
expectations of consumers
price of the product
availability of substitute products
87
Which of the following statements best describes the graph?
a decrease in supply costsresults in a lower market price
increase in a goods popularity
an increase in supply costsresults in a higher market price
an increas in a good’spopularity leads to a higher price
88
what does a demand schedule show?
prices and elasticity
elasticity and utility
quantities and elasticity
quantities and prices
89
Which level of government is responsible for fire protection?
local
federal
regional
state
90
The Gross Domestic Productexamines the
amount of intermediategoods produced
quality of final goodsproduced
volume of used goods soldin public markets
quantity of goods andservices produced
91
The purpose of the FDIC is to
sell government bonds and Treasury bills
function as the federal government's bank
insure depositors up to $100,000
regulate competition among banks
92
What is the most commontype of business in the United States?
sole proprietorship
partnership
cooperative
coperation
93
The choices all societiesmust make about production are driven by
scarcity
microeconomics
price systems
capitalism
94
The government sector of the United States receives most of itsrevenues from
the factor market.
the product market.
taxes on individuals and businesses.
fees collected from citizens using its services.
95
Which of the following is a human resource?
oil
goods
tools
knowledge
96
What government actions would most likely be taken to fix the previous problem
increase taxes and raisethe discount rate
cut taxes and purchasetreasury bonds
sell treasury bonds and raisethe discount rate
lower the discount rate anddecrease price of basic goods.
97
Which of these phrases best describes the U.S. balance of trade?
the US exports more than it imports
the US exports and imports the same amount of goods
the US does not import goods from other countries
the US imports more than it exports
98
Which of the following is a characteristic of a market economy?
The government limits thevariety of products made.
The government limits thequantity of products made.
People have the freedom tochoose from a variety of products.
Prices are not flexible.
99
How are stock prices determined?
supply and demand
the Dow Jones Industrial Average
the New York Stock Exchange
government spending
100
Why are money and factors/goods moving in opposite directions?
taxation on products moves money in the opposite direction
businesses&householdsare in competition to Control market
supply & demand dictatethat they move in opposite direction
the are the means ofexchange for one another
101
Which example illustrateshow changes in complements can influence demand?
demand for pencilsincreases when the price of pens rises.
Demand for teadecreases when the price of coffee decreases
demand for lightbulbsincreases when price of lamps decreases
demand for margarineincreases when price of butter rises.
102
What is a charter?
a statement of corporation debt
a not-for-profit business
a document needed to start a corporation
a technique used to settle labor disputes
103
One purpose of saving money is to
increase risk when investing for the long term.
decrease interest when paying back a loan.
make a plan for expenditures and income.
collect enough money for a major purchase.
104
Which of the following does the Fed regulate?
large commercial banks in the United States
banks in other countries
Congress's use of taxpayer money
the daily operations of the FDIC
105
Which act bans monopolies?
Equal Pay Act
Civil Rights Act
Americans with Disabilities Act
Sherman Antitrust Act
106
The government can borrow money by
increasing entitlements
selling bonds
raising taxes
decreasing the federal debt
107
Which of the following defines global interdependence?
economic equality betweenricher and poorer nations
nations that place tariffson foreign imports
countries that trade freelywith neighboring countries
countries rely on oneanother for their goods and services
108
Which of the following is a want?
clothing
food
vacations
shelter

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