Why does a command economy have a large government?

They need to decide what and how products are made

Which of the following is NOT a characteristic of a traditional economy?

People have freedom to choose what to do

Which of the following is NOT true of a public good?

They transfer money to people that need it

Which of the following would cause the price of Indy Eleven tickets to decrease?

Ticket sellers know the price will decrease next month

Why would you want a 401(k)?

Employers can match contributions

Why are the 3 basic questions important?

They determine the use of scarce resources

What would cause a decrease in the supply of fast food?

Workers at fast food places no longer get a discount on food

What's the advantage of a credit union?

They can offer lower interest rates on loans

How would you determine how long it will take your money to double?

Take 72 divided by the interest rate

How are partnerships and sole proprietorships different?

P. have easier access to resources than S.P.

How can you see opportunity cost on the PPC?

Moving from Point B to Point D losing Good Y to gain Good X

What does it mean when a country has consumer sovereignty?

Consumers decide what is produced

How is revenue different from profit?

R is money made before cost and P is money made after cost

Why does the government offer transfer payments?

To provide a safety net for people not helped in market econ

How does economies of scale help a producer?

It makes the cost of production ↓ as the company gets bigger

What does a business association do?

businesses work to encourage their common interests

Which of the following is true of franchises?

Owners don't get a say in many of the materials they use

Why must money be durable?

Because durability keeps the cost of printing money low

Which of the following would cause an increase in demand for apartments?

If you sign a 1 year lease you get half off a U-haul truck

What's the purpose of a financial intermediary?

To bring savers together to lend money to borrowers

Why is economics important?

Determines how to use limited resources to satisfy desires

What's the difference between a Treasury note and a Treasury bill?

Bills have a shorter maturity date than notes

How can you see the law of demand in the demand curve?

Curve is downward since P & QD are indirectly related

What's the appeal of a money market mutual fund?

Offer investors a higher interest than a savings account

Which of the following is an example that illustrates the law of diminishing marginal utility?

Getting consecutive plates of food at a buffet restaurant

If you are saving for distant expenses why do you not want to generate current income?

You are likely to spend current income

How is a monopolisiticly competitive market different from a perfectly competitive market?

Monopolistic has more control over price

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Econ Final Quiz

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An #Econ final Quiz

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Questions 90

Answers

1
Why does a command economy have a large government?
They need to ensure workers are efficient at their jobs
They need to ensure the culture is continued
They need to encourage entrepreneurial ideas
They need to decide what and how products are made
2
What happens to the PPC when more resources are added?
Move from Point B to Point F
Move from Point D to Point E
Move from Point C to Point D
Move from Point A to Point C
3
Which of the following is NOT a characteristic of a traditional economy?
Entrepreneurs are discouraged
People have freedom to choose what to do
Many people live below the poverty line
Everyone helps each other in times of trouble
4
Which of the following is NOT true of a public good?
Government provides them
They transfer money to people that need it
One person's use of product doesn't diminish it for others
People can't be excluded from the benefits of it
5
Which of the following would cause the price of Indy Eleven tickets to decrease?
Website to buy tickets go down
Indy Eleven has a winning record
Ticket sellers know the price will decrease next month
Get a free Indy Eleven t-shirt with ticket purchase
6
Why would you want a 401(k)?
Employers can match contributions
It offers low interest rate
It is ensured by the government
It is tax free
7
Which of the following items has the most elastic demand?
Foreign travel
Tobacco products (for smokers)
Prescription drugs (for older people)
Physician’s service
8
This type of money only works because people believe in it
Financial money
Fiat money
Commodity money
Representative money
9
Why are the 3 basic questions important?
They determine the utility of the product being produced
They determine the wealth of the country
They determine the wealth and utility of the country
They determine the use of scarce resources
10
What would cause a decrease in the supply of fast food?
Price of beef to make hamburgers decreases
3 new types of fast food chains open up in the area
Workers at fast food places no longer get a discount on food
Grills that cook food better and faster
11
Since you know that bitcoin is high risk you can expect
Easy to get your money when you want
Low potential return
Hard to get your money when you want
High potential return
12
What economic system does Country Tango have?
Market
Command
Traditional
13
Which of the following is NOT an argument against rent control?
Tenants don't get updated apartments
Landlords will convert apts to office space
There are shortages of apartments
It only helps producers
14
This is when the factors of production are owed by individuals
Socialism
Communism
Capitalism
Privatizing
15
In the following situation what are the trade-offs?
Movie & babysitting
Concert
Concert, movie, and hike
Concert, movie, babysitting, and hike
16
This is partial ownership in a corporation
Municipal bond
Stock
Treasury note
Corporate bond
17
When the price of an item increases a lot and consumers don’t react a lot what is this called?
Elastic demand
Change in Quantity Demand
Inelastic Demand
Unit Elastic Demand
18
What's the advantage of a credit union?
They can offer lower interest rates on loans
They can give out more loans
They can offer higher interest rates on savings accounts
They can offer more branches than banks
19
How would you determine how long it will take your money to double?
Take 72 minus your age
Take 72 divided by the interest rate
Take 72 times your age
Take 72 and add your interest rate
20
How are partnerships and sole proprietorships different?
S.P. have unlimited liability and P have limited liability
P. have easier access to resources than S.P.
S.P. needs legal documents to start and P don't
P. has unlimited life and S.P. has limited life
21
How can you see opportunity cost on the PPC?
Points under the curve shows you don't have enough resources
Moving from Point B to Point D losing Good Y to gain Good X
Moving from Point F to Point D losing Good Y to gain Good X
Expanding the curve out when desires of the consumer change
22
What does it mean when a country has consumer sovereignty?
Consumers are provided for by the government
Consumers are independent of production process
Consumers own the factors of production
Consumers decide what is produced
23
How is revenue different from profit?
R is money made before cost and P is money made after cost
R is used for how many workers to hire and P is break-even
R is money made after cost and P is money made before cost
R is for break-even and P is for how many workers to hire
24
Why does the government offer transfer payments?
To provide a safety net for people not helped in market econ
To pay for negative externalities
To get rid of free riders
To ensure fair competition
25
How does economies of scale help a producer?
It makes it easier for a new seller to enter an industry
It makes a product unique to sell
It gives sellers more control over the price
It makes the cost of production ↓ as the company gets bigger
26
Which of the following is NOT a characteristic of a perfectly competitive market?
Many sellers
Easy to enter the market
Producers work independently
Similar products
27
What does a business association do?
people work to improve their occupation
people can buy goods in bulk for lower prices
people can negotiate for better working conditions and pay
businesses work to encourage their common interests
28
Where is the largest surplus? How much of a surplus is there?
$2, 20
$14, 16
$6, 8
$10, 4
29
Which of the following is true of franchises?
They have limited life
They have double taxation
They have to pay dividends
Owners don't get a say in many of the materials they use
30
Why must money be durable?
Because durability keeps the cost of printing money low
Because durability makes money easier to carry
Because durability makes money less scarce
Because durability increases the value
31
Which of the following is NOT a key freedom in a free enterprise economy?
Free contract
Open opportunity
Legal equality
Consumer sovereignty
32
Which of the following would cause an increase in demand for apartments?
There will be a sale on apartments next month
IUPUI has a small incoming freshman class
Interest rates on house loans decrease
If you sign a 1 year lease you get half off a U-haul truck
33
Where is the smallest surplus on the following graph? How much of a surplus?
$2, 20
$14, 16
$6, 8
$10, 4
34
What's the purpose of a financial intermediary?
To provide a backing for representative money
To bring savers together to lend money to borrowers
To facilitate bartering
To set the value of money
35
Why is economics important?
Determines if an item is a good or a service
Determines profit required for a company to be successful
Determines how much satisfaction people get from products
Determines how to use limited resources to satisfy desires
36
Which of the following is an example of a positive externality?
Holiday lights on many houses
Quality bridges
Opportunity to do what you want with your property
Gov't providing products that private businesses wouldn't
37
Which of the following would cause a decrease in supply for Beats headphones?
Price of plastic decreases
Employees get stock in the company
Price of Beats decreases
Excise taxes increase
38
What type of economic system does Country Delta have?
Market
Traditional
Command
39
Which of the following would NOT be an example of a factor market?
Hair salon
Financial planner
For sale sign
Craigslist
40
What's the difference between a Treasury note and a Treasury bill?
Notes are cheaper to purchase than bills
Notes are more safe than bills
Bills have a lower risk than notes
Bills have a shorter maturity date than notes
41
Where is the smallest shortage on the following graph? How much of a shortage is there?
$14, 16
$6, 8
$2, 20
$10, 4
42
How can you see the law of demand in the demand curve?
Curve is downward since P & QD are directly related
Curve is downward since P & QS are directly related
Curve is downward since P & QD are indirectly related
Curve is downward since people get tired of products
43
What's the appeal of a money market mutual fund?
They are cheap to start
They are insured by the government
Offer investors a higher interest than a savings account
Employers often add their own contributions
44
Why are corporate bonds sometimes called junk bonds?
Because it is hard to cash them in
Because they don't pay very much
Because they are not good for retirement
Because they are high risk
45
When the price is at $12 on the following graph what needs to happen?
The price needs to increase
More products need to be made
A rebate needs to be offered
A price ceiling is set
46
Which of the following is an example that illustrates the law of diminishing marginal utility?
Never getting tired of your favorite movie
Diabetics always needing insulin
Buying more shirts when the store is having a sale
Getting consecutive plates of food at a buffet restaurant
47
If you are saving for distant expenses why do you not want to generate current income?
These investments are not insured
You are likely to spend current income
These investments are not diversified
Investments are riskier when they generate income
48
What type of merger would it be if AT&T merges with Verizon?
Conglomerate
Vertical
Horizontal
Franchise
49
How is a monopolisiticly competitive market different from a perfectly competitive market?
Monopolistic has more control over price
Perfect competition has brand names
Perfect competition is harder to enter
It is hard to enter a monopolistically competitive market
50
Why do people argue against raising the minimum wage?
It would cause equilibrium for labor to change
It would cause prices to rise
It would cause a shortage of workers
It would cause shortages of products
51
Which of the following would cause less digital cameras to be sold?
Unemployment rate drops
Price of plastic increases
Producers of cameras expect the price to drop in the future
Price of SD cards drops
52
What point on the graph is the most inefficient?
Point E
Point A
Point D
Point C
53
What are the 3 basic questions?
How, what, and when to produce
How, for whom, and what to produce
What, why, and for whom to produce
What, why, and how to produce
54
How is a modified free enterprise circular flow different from a market circular flow?
Modified version doesn't apply to the US and market does
Market version keeps changing while modified version doesn't
Modified version includes gov't while market does not
Market version has many businesses while modified has few
55
Problem with this type of money was more money couldn't be created until more gold was found
Bartering money
Commodity money
Fiat money
Representative money
56
How are 401(k) and 403(b) different?
403(b) is for nonprofit companies and 401(k) is for profit
Easier to get your money out of a 401(k) than a 403(b)
401(k) is more risky than a 403(b)
401(k) is for long term and 403(b) is for short term
57
This is a company you invest in that buys a collect of stocks & bonds and manages it for you.
Municipal bond
Mutual fund
Certificate of deposit
Pension fund
58
This type of investment is fairly safe because it is insured by the FDIC
401(k)
Certificates of Deposit
Treasury bonds
Corporate bonds
59
What's the difference between a public and private corporation?
Public has double taxation and private doesn't
Private has more shares than public
Private has limited life and public has unlimited life
Public can get more money than private
60
What economic system does Country Gamma have?
Market
Traditional
Command
61
How is an oligopoly different from monopolistic competition?
O. has some control over price and M. has not control
O. have standardized products and M. are similar
Monopolistic is easy to enter and oligopoly is hard to enter
Monopolistic has advertising and oligopoly doesn't
62
Why could Google be accused of predatory pricing for their mobile software?
They are changing the price depending on the customer
They are charging more than what it cost to make it
They are charging less than what it cost to make it
They are only charging Europeans for the software
63
How are the 3 types of partnerships different?
Some have fewer partners than others
Some require a legal document and others don't
Some has limited life and some have unlimited life
Some has limited liability and some has unlimited liability
64
What do municipal bonds help fund?
Federal government debt
Local parks, stadiums, and other projects
Retirement for employees
Corporate expansion
65
Which type of market structure is created when one company has economies of scale?
Natural monopoly
Oligopoly
Government monopoly
Monopolistic competition
66
Which of the following is NOT a way that the government ensures fair competition?
Limiting the number of companies in an industry
Making predatory pricing illegal
Preventing trusts
Requiring businesses to disclose ingredients
67
Why is it important for money to be divisible?
It keeps prices low
It protects against counterfeiting
It gives money a higher value
It makes money last longer
68
What do points on the PPC tell you?
Scarcity doesn't exist
Resources are being used most efficiently
Economic growth has been reached
Consumers like these products
69
This type of nonprofit is when people work to improve their occupation
Labor Union
Service Cooperative
Professional Association
Business Association
70
Why are price ceilings controversial?
They create an artificial equilibrium
They cause a surplus
They cause a shortage
They favor producers
71
How can you see trade-offs on the PPC?
Expanding the curve out to Point E
Shrinking the curve inward to Point C
All the options on the curve and under it are possible
Moving from one pt on the curve to another pt on the curve
72
Which of the following is NOT included in M1?
Cash
Checking accounts
Savings accounts
Debit cards
73
What type of merger would it be if AT&T merged with Time Warner?
Vertical
Multinational
Horizontal
Limited liability
74
In the following situation what is the opportunity cost?
Time it takes to hike
Concert
Cost of concert & movie
Money earned babysitting
75
Where is the greatest shortage on the following graph? How much of a shortage?
$6, 10
$10, 4
$2, 20
$14, 16
76
What does it mean for money to have a store of value?
Stores will value money
Money is not very scarce
Businesses will accept money as payment
The value of money doesn't change much over time
77
Which product is likely to have the most elastic supply curve?
iPads
Aircraft carrier
Houses
Roads
78
Why is a price ceiling set?
To cause a shortage
Because there is a shortage
Equilibrium is too high
Equilibrium is too low
79
What type of monopoly occurs when a specific technique is reserved for only one company?
Government monopoly
Natural monopoly
Technological monopoly
Geographic monopoly
80
How do you determine how many workers to hire in a production schedule?
Any pt above break even
Profit max point
Any worker above inc returns
Where revenue is highest
81
What does the law of supply state?
Price & quantity supply are indirectly related
Quantity demand & quantity supply are directly related
Price & quantity supply are directly related
Quantity demand & quantity supply are indirectly related
82
Which of the following is NOT a characteristic money must have?
Scarcity
Divisibility
Exchangeability
Uniformity
83
What type of elasticity is from C to E?
Inelastic
Elastic
Unit Elastic
84
Why does diminishing marginal returns happen?
Too many inputs are changing in the short run
Too many products are being produced
The company isn’t managing their people well
Workers max their use of the other resources
85
What's the difference between a Roth IRA and a regular IRA?
Roth has you pay taxes now and IRA pays at retirement
IRA has you pay taxes now and Roth pays at retirement
Roth has a collection of stocks and IRA is just 3
IRA is insured and Roth is not
86
Which of the following is NOT a negative externality?
Area of town around bars after they close
Factory that pollutes the air
Secondhand smoke
Someone who watches fireworks from their house
87
If the price of Pepsi increases what happens to the equilibrium for Coke?
Price decreases, Quantity decreases
Price decreases, Quantity increases
Price increases, Quantity decreases
Price increases, Quantity increases
88
Which of the following will cause an increase in quantity demand for iPads?
Microsoft surface price increases
Price of iPads increases
iPads will be on sale next week
Price of iPads decreases
89
Which of the following is NOT an example of a factor of production in a pro football game?
Turf
Fans
Gatorade
Walter Camp
90
Why do market economies have a huge divide between the rich & poor?
Government decides who gets education and who doesn't
There is no incentive to work hard
Customers only favor rich producers
Some people can't afford the education needed to get ahead

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