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Economics Final Exam Review
Economics Final Exam Review
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1
Which one of the individuals below would be considered unemployed?
A person who is qualified to teach but is driving a bus instead
A person who stayed home to raise children but now starts looking for a job
A person who works 2 part-time jobs, but wants full-time
A person who quits work to care for aging parents
2
Which of the following is NOT a way in which fiscal policies would reduce inflation?
A mixture of raising taxes and reducing government spending
A reduction in government spending
An increase in taxes
An increase in government spending
3
The graph below shows:
A decrease in demand
no change in both supply and demand
a decrease in both supply and demand
A decrease in supply
4
If the Federal Reserve wants to INCREASE the money supply, it can do all of the following EXCEPT:
Reduce the discount rate
Reduce the reserve requirement
Sell government bonds
Purchase government bonds
5
What is the opportunity cost for this person of moving from point a to point b?
$20 of income per week
$5 of income per week
$10 of income per week
$10 per hour of studying per week
6
What is the purpose of a production possibilities curve?
Encourage worker productivity
Enable a country to mobilize its resources in times of war
Show opportunity costs associated with allocating resources b/w 2 goods
Make it possible to increase an economy's input resources
7
If country XYZ produces 6 million blankets, how many shirts can it efficiently produce?
6
2
8
12
8
When the Federal Reserve makes decisions about the control of the money supply their decisions are referred to as:
Monetary policy
Market policy
Fiscal policy
Investment policy
9
Which of the 4 courses of action would a
rational
consumer choose?
Action C
Action B
Action D
Action A
10
Trade-offs exist and choices must be made because:
society has only a limited amount of productive resources
not all production is efficient
buyers and sellers must often negotiate prices
human wants and needs are limited at a particular point in time
11
Which of the following lists the three basic economic questions that must be answered?
When to produce, How to produce, For whom to produce
What to produce, How to produce, Why to produce
What to produce, How to produce, For whom to produce
What to produce, When to produce, For whom to produce
12
Which of the following is NOT an indicator used by economists to measure the overall health of the economy?
The PPF
Consumer Price Index
Gross Domestic Product
Unemployment Rate
13
If you are only making the minimum payment on a loan or credit card balance each month, which of the following is TRUE?
Mr. Horne will be disappointed in your choice.
You are charged interest on the remaining balance
You are blocked from opening new lines of credit
Your credit line is restored to its original amount
14
Which of the following market structures includes
many
businesses that sell the
same
products?
Oligopoly
Monopolistic competition
Perfect competition
Monopoly
15
According to the graph, how many cookies will Grace buy if the price is $1.00 per cookie?
5
4
2
3
16
In this business structure, the owner has full control, keeps 100% of profits, but also has 100% of the liability/risk:
Partnership
Corporation
Sole Proprietorship
Limited Liability Corporation
17
Unemployment that occurs when there's a mismatch between skills people have learned and skills the job market requires
Natural
Cyclical
Structural
Frictional
18
When the price of a product is lower, people will demand/buy more of it. This describes:
Equilibrium
The Law of Demand
The Law of Supply
Gross Domestic Product
19
Someone buys a car for a large amount of money. They have completed an exchange in this part of the circular flow model:
Firms/Businesses
Product Market
Factor Market
Households/individuals
20
What is the opportunity cost of increasing the production of dolls from 200 to 300?
100 fire trucks
150 fire trucks
200 fire trucks
350 fire trucks
21
The economic system in which the government owns and controls the factors of production:
Market
Command
Traditional
Mixed
22
Which graph shows an increase in price for suppliers?
Graph C
Graph B
Graph A
Graph D
23
A type of fiscal policy that includes a reduction in taxes and/or increased government spending:
Contractionary
Expansionary
24
Which of the following people would be considered an entrepreneur?
Tommy volunteered at a soup kitchen
Dora opened a plant nursery that specialized in small trees and bushes
Bob got a job working as a cashier at Burger King
Jerome cut the grass and his mother gave him $10
25
Congress passes a new law taxing car producers due to the pollutants their plants create - which role of govt is this?
Protecting property rights
Stabilizing the economy
Maintaining competition in the market
Correcting for externalities
26
In which market would you receive a paycheck from working at Chic-fil-A?
Product Market
Factor Market
27
Which of the following motivates entrepreneurs to take risks?
A steady increase in GDP
A low unemployment rate
The potential to make a profit
A good credit score
28
What is the consumer price index used for?
monitor changes in the cost of living
monitor changes in the level of real GDP
track changes in the level of wholesale prices in the economy
track changes in the stock market
29
An office building is an example of:
Labor
Capital
Entrepreneurship
Land
30
Which of the following is an example of human capital?
the equipment used by a dentist to fix teeth
the salary paid to a plant supervisor
the knowledge a mechanic has about fixing cars
the machinery used to build cars
31
A PRICE FLOOR typically leads to:
Equilibrium
Production Possibilities
Surplus
Shortage
32
The opportunity cost of this economy moving from point E to point A is:
3 shin guards
4 shin guards
5 shin guards
8 shin guards
33
Economics is BEST defined as the study of how:
Choices are made due to the scarcity of resources
Modern businesses have grown and prospered.
Capitalism has survived in today's world
Various societies have dealt with unemployment and inflation
34
When choosing a credit card, you should consider all of the following EXCEPT:
Penalties and fees
Credit limit
Annual Percentage Rate
If you can put a design on the card
35
The interest rate that the Fed charges banks to borrow money from them is known as:
Discount rate
Annual Percentage Rate
Reserve requirement ratio
Equilibrium price
36
Which of the following would be an example of complementary goods?
Flashlights, candles
Bar soap, body wash
Hot dogs, hot dog buns
DVDs, VHS tapes
37
When the government uses taxes and spending to address economic problems, it is practicing:
trickle-down economics
free enterprise
monetary policy
fiscal policy
38
Which of the following market structures is made up of
one firm
that dominates the market and supplies all the output?
Monopolistic competition
Oligopoly
Perfect competition
Monopoly
39
A type of unemployment that occurs when there is a downturn in the economy:
Cyclical
Natural
Frictional
Structural
40
What is the 70-20-10 Rule?
70 percent purchase, 20 percent save, 10 percent borrow
70 percent purchase 20 percent save, 10 percent investment
70 percent sales, 20 percent discount, 10 percent write off
70 percent purchase 20 percent investment, 10 percent save
41
What is a benefit that
corporations
have that other business structures do not have?
They obtain loans from banks.
The do not have to share control of the business with other individuals
They have 100% of the liability/risk if the business fails
They can sell stock of the company to the general public
42
The physical effort of people to produce goods and services describes which factor of production?
Capital
Land
Labor
Entrepreneurship
43
Freedom of choice and competition are commonly found in which type of economic system?
Socialist
Market
Command
Traditional
44
A PRICE CEILING is a government imposed:
Regulation on safety standards
Maximum amount that can be legally charged for an item
Minimum amount that can be charged for an item
A price ceiling is not government imposed
45
The fact that people have unlimited wants but limited resources is known as:
Incentives
Surplus
Opportunity Cost
Scarcity
46
Which of the following is NOT a tool that the Federal Reserve can use to change the supply of money?
Discount rate
Taxation rate
Reserve requirement ratio
Open-market operations
47
A type of unemployment that occurs when an individual voluntarily leaves one job to find another job:
Natural
Structural
Frictional
Cyclical
48
What is the Federal Reserve?
The nation's budget committee
The nation's economic advisors
The nation's central banking system
The nation's primary producer of coins
49
This headline is an example of which economic role of government?
Stabilizing the economy
Correcting for externalities
Protecting property rights
Maintaining competition in the market
50
The efficient use of resources is represented by point(s):
Points A, B, and C
Point D
There are no points that represent an efficient use of resources.
Point E
51
All of the following are barriers to entry except:
In order to become a teacher, one must get a degree & become certified
Water companies must lay miles of pipe before serving any customers
Some states require liquor stores to open up after a certain time
A person wanting to start a business is responsible for all start-up costs
52
In which market structure is the consumer going to get the lowest price?
Perfect competition
Monopolistic competition
Monopoly
Oligopoly
53
Which of the following examples would be included in the calculation for Gross Domestic Product?
The purchase of a home built 10 years ago
The purchase of new Nike Jordans as a Christmas gift
Social Security payment to a retired military officer
Contributions to a charity organization
54
The decrease in the price of hotdogs results in a decrease in the demand for hamburgers. These two products are:
Substitute goods
Final goods
Complementary goods
Intermediate goods
55
What is the most important factor a bank will consider when deciding to give someone a loan?
Age
Gender
Occupation
Credit score
56
The graph below shows:
An increase in both supply and demand
An increase in supply
No change in both supply and demand
An increase in demand
57
Increased investment in technology within a country would most likely cause:
The PPC to shift inward
The PPC to shift outward
No change
Movement along the curve
58
Which of the following is NOT a problem caused by monopolies?
Fewer new products
Low quality
Poor customer service
More competition
59
The point at which both quantity demanded and quantity supplied are equal on a graph is known as:
Supply
Quantity
Equilibrium
Demand
60
If your credit score is _________, your interest rate will be __________.
low , low
high , low
high , high
Credit scores to not impact interest rates
