A rational consumer stops eating cookies when?

The total benefit equals the total cost

What is the purpose of competition?

to act as a regulating force in the marketplace

Which of these is an example of economies of scale?

A factory increases profits by doubling production

Which of the following is a key characteristic of all economic incentives?

They can persuade people to make decisions

If the supply of a good is inelastic

a big price change will cause little/no change in quantity supplied

loans extended for longer periods of time often involve higher interest rates in order to:

compensate lenders for greater risk

Which of the following would result in a leftward shift of the SUPPLY curve

an increase in the cost of flour

Productivity can be increased by

improving the education of workers

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Final review

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Questions 20

Answers

1
A _______________ summarized an individuals planned income and spending over a specific period of time.
Budget
Wage
Investment
Salary
2
A rational consumer stops eating cookies when?
The marginal cost of eating cookies is maximized
The total benefit equals the total cost
The marginal benefit equals the marginal cost of the next cookie
The marginal benefit is minimized
3
What is the purpose of competition?
to cause buyers to have to be careful about spending their money
to cause producers to attempt to put each other out of business
to act as a regulating force in the marketplace
to act as a motivating force for the government
4
Which of these is an example of economies of scale?
A restaraunt charges customers $1 for a drink that used to be free
A store makes more profit by hiring HS workers for a lower wage
A factory increases profits by doubling production
Hotel makes more by charging different fee for different times of the year
5
When buyers are willing to buy exactly as much as sellers are willing to sell for, what is this called?
price floor
shortage
equilibrium
surplus
6
What is the biggest motivation for a manufacturer to sell something?
Making a profit
Putting others out of business
Pleasing the consumer
Popularity of the product
7
Which asset would be most liquid?
money in a certificate of deposit
money in a savings account
money in an ira
an antique car
8
Which of the following is a key characteristic of all economic incentives?
They usually result in lower profits
They require customers to give up benefits
They can persuade people to make decisions
They will have little impact on consumer behavior
9
In which system do the consumers and producers answer the 3 fundamental questions?
Mixed
Market
Command
Traditional
10
The ability for a customer to buy goods or services before paying for them, based on an agreement to pay later is ?
Credit
Rent
Investment
Interest
11
Which of the following is NOT a fundmantal question every economic system must answer?
WHEN will the be produced?
WHAT goods and services will be produced?
FOR WHOM will the products be produced for?
HOW the goods and services will be produced?
12
If the supply of a good is inelastic
a big price change will cause little/no change in quantity supplied
a small price change will cause a big change in quantity supplied
producers have diminishing marginal returns to labor
A big price change will cause a big change in quantity supplied
13
If you put $2000 into a 1 year Certificate of Deposit w a interest rate of 5%, How much interest will you earn in 1 yr?
$100
$50
$5
$200
14
loans extended for longer periods of time often involve higher interest rates in order to:
encourage savings
compensate buyers for usings savings to make a purchase
encourage consumers to buy durable goods
compensate lenders for greater risk
15
Which of the following would result in a leftward shift of the SUPPLY curve
a decrease in the price of hamburgers
an increase in the cost of flour
a decrease in the price of hot dogs
an increase in the price of hotdogs
16
Which of the following is most likely to have the most INELASTIC demand?
Grape Juice
Potato Chips
Motorcycle
Life-sustaining pills
17
There is a family with generations of farmers. They have no choice. What kind of economic system do they participate in?
mixed
command
traditional
market
18
Productivity can be increased by
improving the education of workers
raising union worker wages
raising minimum wages
restricting trade with foreign nations
19
Which of the following is a fixed cost for a store?
Delivery costs
Raw materials
Short term workers
Rent
20
What is the marginal cost of making the 3rd output
$30
$260
$110
$80

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