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Economics Final Exam Review Flashcards | StudBud
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Economics Final Exam Review
Economics Final Exam Review
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1
A government set maximum price that can be charged for goods and services is
rationing
a price ceiling
an equilibrium price
a price floor
2
The largest installment debt in the United States is money people owe
on cars
on appliances
on home mortgages
on clothes
3
In economic terms, the marketplace
exists only at the local level throughout
operates through voluntary exchange
is a place where people buy food
exists only at the national level
4
What trade-off is involved when you buy a CD?
exchanging good for services
exchanging money for goods
exchanging one service for another
exchanging time for money
5
A rational choice involves choosing
most expensive goods
goods that you believe can best satisfy your wants
goods that are highly advertised
least expensive goods, regardless of quality
6
The maximum amount of goods and services a person can buy on the promise to pay in the future
finance charge
annual percentage rate
credit limit
credit card
7
An ad that appeals to emotions, but does provide facts is an example of
informative advertising
competitive advertising
bait and switch
comparison shopping
8
Which of the following types of financial institutions controls the most money
finance company
commercial bank
savings and loan
savings bank
9
Almost all economic systems today are
traditional economies
command economies
market economies
mixed economies
10
All economic choices involve
tax dollars
shortages
trade-offs
destruction of resources
11
The need to make choices arises because
people need to share their resources
some things are not limited
shortages are a constant situation
everything that exists is limited
12
Which of the following factors might affect a person's capacity to pay back a loan
involvement in community organizations
other large debts
problems with the law
educational background
13
Who owns the factors of production and makes economic decisions in a market economy?
communities
government
economists
individuals
14
The first decision a consumer must make is
what quality the product should be
whether the product has a warranty
how to use the product
whether or not to buy an item
15
Economic equity deals with the issue of
specialization
profit
choices
fairness
16
Which of the following groups of people have a traditional economy?
Chinese factory workers
Australian Aborigines
North Koreans
medieval peasants
17
Competition forces businesses to
raise prices
lower the quality of their products
keep prices low
raise the costs of production
18
Which of the following are durable goods
cosmetics
groceries
concert tickets
refrigerators
19
Anytime you receive credit, you are
going into debt
increasing the value of an item
earning interest on borrowed money
lowering the cost of an item
20
The opportunity cost of comparison shopping is
price you pay for the item you choose
money advertisers spend to attract your attention
money you save by making a rational choice
time you could have spent doing something else
21
Since the 1880s, the role of government in the United States has
decreased
been eliminated
had no impact on the economy
increased significantly
22
The basic problem of economics is
shortages
scarcity
lack of choice
overabundance of resources
23
When a product becomes a fad, the demand curve for that product
shifts to the left
shifts to the right
slopes upward
becomes a straight line
24
Which of the following describes what economist do?
predict which policies will be good or bad
rely on public opinion
consider every detail of a problem
offer solutions to economic problems
25
The amount of good and services people can actually buy with their money is their
utility
substitution effect
purchasing power
voluntary exchange
26
What do Treasury bills, Treasury notes, and Treasury bonds have in common?
all are issued by the federal government
all pay the same interest rate
all mature in the same amount of time
all are exempt from federal income tax
27
In a free enterprise system, who makes the decisions about what should be produced?
government
consumers
entrepreneurs
sellers
28
A method of payment that enables customers to transfer funds electronically from their bank is
regular charge account
credit card
debit card
revolving charge account
29
A shift to the left in the demand curve indicates
increase in demand
decrease in price
decrease in demand
increase in population
30
The use of a slogan, a jingle, or a celebrity endorsement are examples of
price leadership
product pricing
product identification
direct-mail advertising
31
One way to extend the life of a product is to
produce more of it
find new uses for it
replace it with a similar product
raise the price
32
Methods of production have changed as a result of
lack of financing
technology
decrease in workers
increase in raw materials
33
Which type of financial institution is owned and operated by its members
credit union
consumer finance company
savings and loan
commercial bank
34
In a trade-off, opportunity cost is the value of the
next best alternative
scarce resources
factors of production
action that was chosen
35
The benefit of using credit is
paying lower prices for expensive durable goods
being able to buy and enjoy a good or service now than later
paying interest on borrowed funds
not going into debt to buy things you want
36
What motivates people to establish new businesses or expand existing ones?
government regulations
freedom of choice
profit incentive
private property
37
According to the law of supply, as the price rises for a good,
quantity supplied decreases
quantity supplied increases
consumers stop buying it
manufacturers stop producing it
38
Prices on good and services are determined
both by demand and supply
only by demand
only by supply
neither by demand nor supply
39
A law dealing with unemployment compensation helps provide
economic stability
economic equity
economic growth
economic security
40
Which statement reflects the inverse relationship between quantity demanded and price
as the supply goes up, the demand goes up
as the price goes down, quantity demanded goes up
as the supply goes up, the price goes up
as the price goes up, quantity demanded goes up
41
All economic systems
have the same resources
distribute products through majority rule
must answer the same basic three questions
produce the same goods
42
The four factors of production are the resources of land, labor, capital, and
services
productivity
technology
entrepreneurship
43
Which of the following is the most efficient method of gathering information?
going to different stores
browsing the web
making telephone calls
listening to ads on the radio
44
The use of technology to produce and distribute goods will
decrease supply
increase supply
move the supply curve to the left
not affect supply
45
American consumers spend most of their money on
recreation
health and personal care
housing and food
transportation
46
Which of the following is a visual aid that helps a business determine how to use its resources
scarcity
opportunity cost
trade-off
production possibilities curve
47
The goal of economic freedom is to
allow the government to control the economy
limit competition
prevent businesses from failing
allow each member of society to make choices
48
The relationship between price and quantity supplied is
nonexistent
an indirect one
a direct one
an inverse one
49
As an economic term, land includes
knowledge
work people do
machinery
natural resources
50
Economic models are useful because they
provide every detail about a problem to be studied
show the way people react to changes in the economy
judge the value of economic events
make testing a hypotheses unnecessary
51
To an economist, a want is
something other than a basic survival need
something you do not have
something most people have
something you must have to survive
52
Your credit rating affects your ability to
get a job
save money
obtain a loan
get an education
53
To determine which creditor is charging the most for credit, a consumer should compare
monthly payments
length of the credit agreements
finance charges
annual percentage rates
54
Which of the following could be uses as collateral?
car
credit card
job
current debts
55
All the steps in consumer decision making involve
disposable income
luxury items
opportunity cost
discretionary income
