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Economic Final
Economic Final
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1
Reitz raises the price of season tickets by 100% and the Bowl still sells out. This is an example of:
supply
inelastic demand
inferior good
elastic demand
2
All of the following shift the deman curve for automobiles to the right except?
the local factory gives a big raise to its employees
consumer except the price of automobiles to rise next year
a study comes out that says automobiles are very dangerous
the price of gasoline falls
3
A power company decides to bury its power lines. This answers which economic question:
for whom
how
what
why
4
What is the concept of a bank leaving a small amount in reserve/on hand?
Store of Value
Monetary Policy
Discount Rate
Required Reserve Ratio
5
Which of the following makes someone an enterepreneur?
inventing and selling the rights to manufacture a computer game
running a service that hires people to install sprinkler systems in lawns
earning akit if money as a computer programmer
becoming a highly paid dancer
6
What condition is necessary for a fiat money system to work?
Banks must hold enough gold to cover paper money they give out
Money owed by customers must be paid on time
Customers with checking accounts cannot earn interest
The government must control the money supply
7
When credit is expensive to borrow and in short supply it is called:
Tight Money
Loose Money
Fiat Money
Near Money
8
____ taxes are designed to take a larger percentage of high incomes as compared to lower incomes:
Regressive
Negative
Progressive
Porprotional
9
A surplus occurs when the price is
less than the equilibrium price
greater than the equilibrium price
none of the above
equal to the equilibrium price
10
Which of the following is an example of money as a unit of account?
people in business cannot calculate their profits or losses
people can decide which of 2 items is a better bargain
keeping financial records is diffcult
comparing the value of items is difficult
11
Which movement reflects a decrease in the price of fruit roll-ups a substitute fruit snacks?
D to D2
b to a
D to D1
D2 to D1
12
The purpose of a production possibilities graph/curve is to
keep an economy from having nonproductive workers
make it possible to increase an economy's output
Enable a country to mobilize to win a war
show alternative ways to use an economy's resources
13
An increase in the number of fast-food restaurants
increases the demand for fast food meals
increases the demand for substitutes for fast-food meals
increases the supply of fast food meals
raises the price of fast food meals
14
Which of the following is not a monetary polcy tool used by the Fed?
Taxes
Required Reserve Ratio
Discount Rate
Open Market Operations
15
Wila opens a spa and finds out that the govt has set a price cap on how much she can charge for Spa treatments. This is
price ceiling
equilibrium
price floor
surplus
16
The government takes part in the United States economy to
encourage competition and fair play
regulate industries in which monopolies serve the public good
all of the above
prevent monopolies and reduce cost of imperfect competition
17
What does it mean when a person is underemployed?
the person is not making as much money as they need
the person is looking for work in a special field
the person has a job but they overqualified for it
The person has been working but now is laid off
18
GDP is
value of all final good and services produced in the US in the given period
value of all final goods and services produced in the given period of time
the sum of all currency and coins in circulation
value of all final good and services produced anywhere in the world
19
A monopoly's prices are determined by
market equilbrium
competing firms
perfect competition
the monopoly
20
In a perfect competitive market, prices are set by
supply and demand
companies in the industry
a few firms with government help
a mix of market and government forces
21
Penny agrees to paint a portrait of John's family in exchange for a homemade table. Their transaction is called?
banking
credit
unit of account
bartering
22
A large # of buyers and sellers who exchange identical products characterizes the market structure called __.
Oligopoly
Monopoly
Monopolistic Competition
Perfect Competition
23
Which of the following lists of factors of production would an economist categorize as land?
factories, office buildings, assembly lines, workers
iron ore, natural gas, fertile soil, water
dams, bridges, rock quarries, oil wells
farm fields, tractors, pesticides, fertilizers
24
Anti-trust legislation has been passed to allow the government to _____.
create combinations of companies
complete with private companies
break up monopolies
prevent interference with trust
25
What is a factory building an example of?
technology
physical capital
an economic trade-off
human capital
26
Which movement reflects an increase in demand?
a to b
D3 to D1
D2 to D3
D3 to D2
27
If the Fed wants to make a "tight" money policy it would:
all answers are in correct
raise the required reserve ratio
raise the discount rate
the first 2 answers are correct
28
The equilibrium price and quantity in the figure is
$35, 125 tons of water
$0.25, 60 tons of water
$3.00, 60 tons of water
$1.25, 35 tons of water
29
Mallory spends 3 hrs working overtime rather than watching a movie. She earns $8 hr. Her opportunity cost of working is
the enjoyment she would have received had she watched the movie
the $24 she earns working
the $24 minus the enjoyment she would have received from watching the movie
nothing since she have received less than $24 worth of enjoyment
30
How does a bank make most of its profit?
by paying out less in interest on deposits than it earns interest on loans
by receiving fees from the government for handling accounts
by collecting fees on safe deposit boxes
by collecting fees on credit card purchases
31
Economics is the study of:
how businesses use unlimited resources to satisfy unlimited consumer wants
how governments satisfy business demand
how people use scare resources to satisfy unlimited wants
how people use unlimited resources to satisfy limited wants
32
Two goods that go together, increased demand for 1 will likely mean increased demand for the other (like pb&j) this is
substitution effect
inferior goods
cost of production
complementary goods
33
Scarcity implies:
something is temporarily
the government should stay out of economics
you should always go with your second choice
there are forever never enough resources
