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Economic ACP REVIEW Flashcards | StudBud
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Economic ACP REVIEW
Economic ACP REVIEW
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Preparing for ACP's
Flashcards
50 cards
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Questions
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Answers
1
What condition differentiates a market of
pure competition
from
monopolistic competition
?
Products
Competition
Firms
Price
2
What incentive is a startup business most suited to offer investor?
A high interest rate due to the high risk of the investment
A cash bonus due to the low risk of the investment.
Position on the Board of Directors
Preferred stock to attract bond buyers
3
____ is an account whose funds can be removed by writing a check and using a debit card.
passbook account
money market mutual fund
demand deposit account
certificate of deposit
4
Changes in quantity demanded and changes in price have a (n) _________ relationship
positive
neutral
inverse
indirect
5
Which of the following is a advantage of corporations?
double taxation
Limited liability
expensive charters
owner have little voice
6
The laissez-faire (hands-off) economic approach is best determined by which economic system
Command
Traditional
Free Enterprise
Mixed
7
Any point on the curve of a Production Possibilities Curve Model indicates an economy -
with high unemployment
at full employment of resources
with less than maximum efficiency
with inflation
8
What economic concept is defined in the cartoon?
Unemployment
Inflation
Stagflation
Deflation
9
Prices for common vegetables tend to be elastic. Why?
because consumers must eat
because other vegetables are available
All choices are incorrect
because vegetables cannot be substituted
10
According to the pie chart, what was the largest expenditure?
Social Security
Net interest
Defense R&D
Medicare
11
At which stage of production does the concept of “diminishing returns” become significant?
Stage I
Stage 4
Stage III
Stage II
12
Which is not a type of business organization?
partnership
sole proprietorship
corporation
stockholder
13
What is the name of the economist that coined the term “the invisible hand”?
Adolf Hitler
Maynard Keynes
Adam Smith
Friedrich Hayek
14
Unincorporated business owned and operated by two or more people
partnership
sole proprietorship
creditors
stockholder
15
What do low prices signal buyers to do?
buy more
buy less
nothing
substitute
16
Use the cartoon to analyze the effects of lower prices and higher wages.
Higher wages require fewer goods for customers
Higher wages create higher prices for consumers
Higher wages have no immediate impact on profits
Higher wages result in a lower price equilibrium
17
Type of investment issued by local government is called a
savings bonds
mutual bonds
creditors
municipal bonds
18
Person who owns a share or shares of stock in a corporation
premium
collateral
partnership
stockholder
19
All are benefits of renting, EXCEPT for -
Amenities (stove, fridge, etc.)
easier to relocate
Little to no responsibility for maintenance
Pay property taxes
20
The most comprehensive measure of a nation’s wealth is provided by its
capital goods.
TINSTAAFL rating
product possibilities curve
Gross domestic product
21
Which of th following terms involves more competition?
Partnerships
Oligopoly
Mopolositic competition
Perfect competition
22
The study of economics involves
explaining how people deal with scarcity.
studying how things are made, bought, sold, and used
all of the above.
explaining how incomes are earned and how jobs are created.
23
All are "ways to avoid credit card debt", EXCEPT
Pay credit card bills on time
Limit number of credit cards
Pay some of the credit card bill
Avoid unnecessary purchases
24
As a borrower, you want to pay _______.
a varying interest rate
any of the above
a high interest rate
a low interest rate
25
_____ is act of not repaying borrowed money.
deductible
premium
defaulted
liability
26
Which of the following is NOT a factor affecting demand?
price of related good
consumer taste
expectations
price
27
Which of these do producers of an item hope to achieve when adopting new technologies?
a repeal of subsidies for production of that item
inelasticity of supply of that item
a shift of the supply curve for that item to the left
a shift of the supply curve for that item to the right
28
A business invests in new computer to handle phone calls. What economic question is answered?
How much to produce?
What to produce?
How to produce?
For whom to produce?
29
Which term is represented on by the visual?
economies of scale
capitalism
capital
scarcity
30
Which is
NOT
a characteristic of the US free enterprise system?
Competition among businesses
Consumer choice of goods and services
Government control of all businesses
Private ownership of property
31
A business investment that involves leasing or renting another successful business model.
multinational corporation
corporation
limited partnership
franchise
32
Why would the sale of a secondhand car
NOT
be included in a calculation of GDP?
The sale is a free-market transaction.
The car is an intermediate product.
The car does not represent new production
The transaction occurs in the underground economy.
33
One of the
characteristics
of a capitalist free enterprise economy is _______.
the minimum wage
consumerism
voluntary exchange
central planning
34
Persons or institutions to whom money is owed.
creditors
collateral
premium
interest
35
What is a disadvantage of a sole proprietorship?
Management requires one decision maker
Owner is liable for all business debts
Stockholders receive portion of profits
Owner controls all aspects of the business
36
____ is payment made for the use of borrowed money.
loan
premium
collateral
interest
37
Which of the following replaces a costly item with a less costly one?
the substitution effect
change in demand
the income effect
consumer taste
38
A business needs to decide if an action is worth the cost, the way would be use a (n)
Needs assessment
Economic model
Cost-benefit analysis
Production possibility comparison
39
Labor in a factory is an example of which of these?
a variable factor of production
a diminishing return
a marginal product
a fixed factor of production
40
One of the roles of government in the US Free Enterprise system is -
setting quotas for production
appointing CEOs of corporations
preventing monopolies
ensuring full employment
41
Every student who wants financial aid must _______.
join the military
take AP classes
complete the FAFSA application form
complete an application for a Social Security card
42
Societies are faced with which three basic questions about production of goods?
what, where, and when
Where, who, and why make it
what, how, and whom to produce for
how, could, where
43
Land, labor, capital and entrepreneurs are referred to as-
consumer expenditures
factors of production
goods and services
business income
44
The illustration represents which of the following choices?
decrease in suppliers
increased Input price
improvement in technology
increase in demand
45
____ is a certificate of ownership in a corporation.
stocks
franchiser
banks
bonds
46
The legally bound obligation to pay debts is known as a
Large amount of paperwork
Fringe benefit
Business license
Liability
47
The economic system of the United States is considered a _______.
socialist economy
command economy
capitalist economy
traditional economy
48
Which of the following is a disadvantage of a sole proprietorship?
simple management
easy to start
Keep most of profits
limited life
49
How do the government make revenue (money)?
Fundraiser
None of the above
Social security checks
Taxes
50
Which of these is used by macroeconomists to measure inflation?
the creation of an output-expenditure model
the calculation of GDP in current dollars
the establishment of a base year
the calculation of the number of households in a country
