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ECON FINAL REVIEW
ECON FINAL REVIEW
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1
What econ law states the following? When a good's price is higher, businesses will sell more."
Law of Supply
Law of Demand
Law of Gravity
Law of Absolute Advantage
2
Compound interest ________ the rate at which your investment grows.
decreases
doesn't change
increases
3
What is the term for the most desirable alternative given up for the decision?
opportunity cost
trade-off
economic system
scarcity
4
If a country experienced an increased standard of living, its GDP would most likely ______.
increase
decrease
stay the same
5
The price of Coke, a sub for Pepsi, decreases. Which graph represents the market for Pepsi?
Graph B
Graph C
Graph A
Graph D
6
The price of cream, an input for oreos, increases. Which graph represents the Oreo market?
Graph C
Graph A
Graph B
Graph D
7
The government collects taxes so it can provide _______ goods.
free rider
private
used
public
8
Which role of government is represented by redistribution of income?
protecting property rights
maintaining competition
promoting economic well-being
protecting savers and investors
9
Why is scarcity the basic problem of economics? Limited ____ vs. Unlimited ____!
wants; resources
jobs; skills
resources; wants
goods & services; government policies
10
The gov't decides to subsidize dairy farming. Which graph represents the market for milk?
Graph D
Graph B
Graph A
Graph C
11
When demand decreases, what happens to equilibrium price and quantity in the market?
Price Decreases, Quantity Increases
Price Increases, Quantity Decreases
Price Decreases, Quantity Decreases
Price Increases, Quantity Increases
12
During economic contractions, what type of unemployment is increasing?
Frictional
Structural
Cyclical
Seasonal
13
When supply decreases, what happens to equilibrium price and quantity in the market?
Price Decreases, Quantity Increases
Price Decreases, Quantity Decreases
Price Increases, Quantity Decreases
Price Increases, Quantity Increases
14
Demand is ___________ when price changes have a significant impact on buyers.
Inelastic
Elastic
15
Which of the following would be included in the calculation of GDP?
the price of materials used to build a house
the selling price of a used car
the selling price of a new iPhone
$ earned from babysitting
16
Which tax structure takes a larger percentage of income as income increases?
Progressive
Proportional (Flat tax)
Regressive
17
The ability of one country to produce a product at a lower opportunity cost than another is
The Theory of Comparative Advantage
The Theory of Absolute Advantage
18
During economic contractions, what is generally happening to the unemployment rate?
It is not changing.
It is increasing.
It is decreasing.
19
What economic law states the following? "When a good's price is lower, people buy more of it."
Law of Comparative Advantage
Law of Diminishing Marginal Returns
Law of Demand
Law of Supply
20
Which market structure is represented in each row?
A)Perfect Comp B)Monopoly C)Monopolistic Comp D)Oligopoly
A)Monopolistic Comp B)Monopoly C)Perfect Comp D)Oligopoly
A)Perfect Comp B)Monopolistic Comp C)Oligopoly D)Monopoly
21
What are the factors of production?
technology products and entrepreneurship
goods and services
all of the products in an economy
land, labor, capital, and entrepreneurship
22
The Fed would ______ the growth of the money supply if it wanted to decrease economic activity.
maintain constant
slow
accelerate
23
A price floor of $700 would result in a surplus of _______ units.
5,000
4,000
3,000
7,000
24
Which of the following would NOT cause a decrease in demand (curve SHIFTING left)?
an increase in the price of a complement
a decrease in the price of a substitute
a decrease in consumer income
a decrease in the price of this good
25
Which of the following would NOT cause an increase in supply?
The number of sellers of the product decreases
Prices of resources decrease
There are advances in production technology
26
INCREASING tax rates and DECREASING government spending are ________ fiscal policy tools.
expansionary
contractionary
27
What is the group that defends workers by fighting to improve work conditions & benefits?
board of directors
labor union
citizen council
parent teacher organization
28
Adam Levine begins endorsing beanie babies. Which graph represents the beanie baby market?
Graph C
Graph D
Graph B
Graph A
29
One way the gov't incentivizes firms to invest in research and development is by granting ____.
public goods
awards
taxes
patents
30
How many cakes will be demanded at the price of $2?
5
1
10
8
31
Your credit score would be ___________ affected if you made a late payment.
positively
negatively
32
The reason for government deficit spending (overspending) is to increase ______ in the economy.
happiness
scarcity
demand
supply
33
Police and fire protection are nonexcludable and nonrival in consumption, making them ____ ___.
substitute goods
private goods
public goods
complementary goods
34
One negative impact of globalization is...
loss of U.S. jobs
adaptation of new technologies
increased access to global markets
increased environmental awareness
35
What is one argument in favor of free trade?
decreases competition
decreases prices of consumer goods
increases the number of U.S. jobs
increases wages in the U.S.
36
What is the opportunity cost of increasing production of X from 2 (Pt C) to 3 (Pt D)?
3 units of X
1 unit of X
11 units of Y
4 units of Y
37
What 3 basic production ?'s must be addressed by all economic systems because of scarcity?
What, For Whom, Why?
What, How, For Whom?
When, How, Where?
Why, Where, When?
38
How would the Fed adjust the discount rate to encourage banks to make more loans?
DECREASE the discount rate
leave the discount rate untouched
INCREASE the discount rate
39
When investors "diversify" their investments, what happens to their risk level?
It decreases.
It stays the same.
It increases.
40
What is it called when the union negotiators meet with company reps to agree on a new contract?
a strike
picketing
collective bargaining
court proceedings
41
What are two broad social goals of the market economic system?
profit, traditions, and government control
freedom and efficiency
choice, central planning, and security
socialism that evolves into pure communism
42
A price ceiling of $300 would result in a _________ of 4,000 units.
shortage
surplus
43
What economic system did Adam Smith favor?
Command Economy
Mixed Economy
Market Economy
Traditional Economy
44
One way the gov't prevents the formation of monopolies is by enforcing ______ laws.
civil
antitrust
constitutional
criminal
45
Inflation causes purchasing power to _________.
decrease
increase
stay the same
46
An individual would _______ his/her human capital by becoming educated, certified, or licensed.
not change
increase
decrease
47
Demand for prescription medication would be __________.
Inelastic
Elastic
