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Economics Exam Review #1 Flashcards | StudBud
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Economics Exam Review #1
Economics Exam Review #1
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1
In every economic system, people must choose how to
create an equal distribution of income
make the best use of scarce resources
satisfy all of the wants of society
save $ to reduce the national debt
2
The specialization of labor usually results in
an increase in output per hour worked
a more equal distribution of income
a decrease in economic interdependence
an increase in inflation
3
Resources used in the production of goods and services are limited, so society must...
make choices about how to use resources
reduce their use of resources
try to obtain additional resources
none of the above
4
Factors that can affect economic growth in developing nations?
technical assistance
all of the above
investments in human & physical capital
free trade
5
Why do medical doctors generally earn more than corn farmers?
medical doctors are more scarce
medical doctors are more efficient
there are fewer medical doctors than corn farmers
medical doctors provide a service
6
Which question must be answered by people in all economic systems?
How will the goods and services be produced?
All of the above
Who will consume the goods and services?
What goods and services will be produced?
7
What primary function is $ serving when it is used to buy a ticket to a baseball game?
store of value
medium of exchange
flow of funds
unit of account
8
Goals of an economic system?
low unemployment
all of the above
economic growth
stable prices
9
A large increase in the # of fast food restaurants in a community is most likely to result in
higher prices & higher quality
lower prices and lower quality
none of the above
lower prices and higher quality
10
For most people, the largest portion of their personal income comes from
wages & salaries from their job
rental $ paid to them
% from stocks and bonds
all of the above
11
Real GDP increases, production stays the same, then production of services has
remained the same
decreased
none of the above
increased
12
An economy's potential output is limited by the quantity & quality of
capital
labor
land
all of the above
13
If Grayling sets a max $ landlords can charge in rent, what is the most likely result?
# of apartments available will be equal to the # of to rent
none of the above
Fewer apartments available than people want to rent
More apartments than people want to rent
14
A business owned by a single individual
partnership
sole proprietorship
corporation
15
Measure of the market value of the nation's output of final goods & services
GDP
GOP
GNP
NFL
16
Which of the following statements about the function of $ is wrong?
$ makes it easier to save
$ makes trading goods & services easier
money holds it value well in times of inflation
17
A decrease in consumer incomes will _____________ total spending in an economy.
none of the above
increase
do nothing to
reduce
18
Profits are equal to total
sales minus advertising costs
assets minus total liabilities
sales minus taxes
revenue minus total cost
19
One reason the federal government might reduce taxes is to
slow down rise in % rates
stimulate economy & increase consumer spending
slow down the rate of inflation
decrease business spending on plant & equipment
20
A person who starts a business to produce a new product is known as
a bureacrat
a manager
a teacher
an entrepreneur
21
If price of beef doubles, poultry stays the same, people would most likely buy
less poultry & more beef
more pork
more poultry & less beef
same amount of poultry & beef
22
If the government charges a new tax of 5 dollars on every pair of sweat pants sold. Result?
consumers would pay a higher price and buy fewer pants
consumers would pay a higher price and buy more pants
consumers would pay a higher price and make huge profits
none of the above
23
Which ? would differ b/t the economies of North Korea & the USA?
What to produce?
all of the above
How to produce?
For whom to produce?
24
_______________ benefit some groups at the expense of others
Tariffs
Don't pick this answer
<p>NO! Not this answer</p>
Don't pick this answer
25
When a person rents an apartment, who benefits from the transaction?
the renter and the landlord
only the landlord
only the person renting the apartment
none of the above
26
Common stocks, limited liability, and unlimited life are basic characteristics of
sole proprietorships
none of the above
corporations
partnerships
27
As income goes up, the tax rate goes up. Name this tax.
Depression
Proportional
Progressive
Regressive
28
In the USA, who determines what goods & services should be produced?
producers, consumers & government
consumers & government
none of the above
producers & government
29
Which of the following are most likely to be helped by inflation?
all of the above
People living on a fixed income
people who borrowed $ at a fixed % rate
banks that loaned $ at a fix % rate
30
When the federal gov'ts expenditures for a year are greater than its revenue.What is it called?
budget surplus
national debt
budget deficit
point of equilibrium
31
Which of the following are factors of production?
labor
all of the above
capital
land
32
Businesses want to make a profit. Households want to buy at a low price.This is resolved by
competition
lawsuits
collective bargaining
government
33
A basic role of entrepreneurs in the economy is to.....
limit the liability in new businesses
buy stocks
tell gov't what new products to sell
take the risks associated with starting a new business
34
An increase in the general level of prices.
recession
deflation
inflation
none of the above
35
In a competitive market, the price of shirts is likely to be increased by...
decrease in supply of cars
a decrease in supply of shirts
a decrease in demand for shirts
decrease in supply of shoes
36
As income goes up, the tax rate stays the same. Name this tax.
Progressive
Proportional
None of the above
Regressive
37
Mexico grows fruit.Argentina raises beef. If Mexico trades fruit to Argentina for beef....
both Mexico & Argentina lose from trade
Mexico benefits, Argentina loses from trade
both Mexico & Argentina benefit from trade
USA & Canada benefit
38
_________________ is the best measure of a nation's standard of living.
MLBPA
Real Income per Capita
Gross Income
NFLPA
39
One reason the federal government might reduce taxes is to ____________ consumer spending
increase
sharply decrease
None of the above
decrease
40
If China stops importing cars from Country X, who would most likely benefit?
Mexican Car Companies
Car manufacturers in X
Consumers in China
Car manufacturers in China
41
A decline in unemployment will be the result of an economy that is in which business cycle?
depression
recession
expansion
contraction
42
An increase from 4% to 9% in interest rates charged by banks would encourage
businesses to invest $
people to purchase land
people to save $
people to purchase housing
