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Economics Final Exam Review
Economics Final Exam Review
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1
The opportunity cost of this economy moving from point E to point A is:
8 shin guards
3 shin guards
5 shin guards
4 shin guards
2
Increased investment in technology within a country would most likely cause:
The PPC to shift inward
No change
The PPC to shift outward
Movement along the curve
3
In which market structure is the consumer going to get the lowest price?
Monopoly
Oligopoly
Monopolistic competition
Perfect competition
4
Which of the following is NOT a problem caused by monopolies?
More competition
Low quality
Poor customer service
Fewer new products
5
Which of the following is NOT a way in which fiscal policies would reduce inflation?
A mixture of raising taxes and reducing government spending
An increase in government spending
A reduction in government spending
An increase in taxes
6
What form would you use to determine if you need to pay additional income taxes to the IRS or if you're getting a refund
W-4 form
1040 form
I-9 form
Gross pay form
7
Which of the following examples would be included in the calculation for Gross Domestic Product?
Contributions to a charity organization
Social Security payment to a retired military officer
The purchase of a home built 10 years ago
The purchase of new Nike Jordans as a Christmas gift
8
What is a benefit that
corporations
have that other business structures do not have?
They have 100% of the liability/risk if the business fails
The do not have to share control of the business with other individuals
They obtain loans from banks.
They can sell stock of the company to the general public
9
What is the purpose of a production possibilities curve?
Encourage worker productivity
Show opportunity costs associated with allocating resources b/w 2 goods
Make it possible to increase an economy's input resources
Enable a country to mobilize its resources in times of war
10
A type of fiscal policy that includes a reduction in taxes and/or increased government spending:
Contractionary
Expansionary
11
If you are only making the minimum payment on a loan or credit card balance each month, which of the following is TRUE?
You are blocked from opening new lines of credit
Your credit line is restored to its original amount
You are charged interest on the remaining balance
12
Which of the following motivates entrepreneurs to take risks?
A steady increase in GDP
A good credit score
The potential to make a profit
A low unemployment rate
13
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
14
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
15
Congress passes a new law taxing car producers due to the pollutants their plants create - which role of govt is this?
Correcting for externalities
Stabilizing the economy
Maintaining competition in the market
Protecting property rights
16
In which market would you receive a paycheck from working at Chic-fil-A?
Product Market
Factor Market
17
The graph below shows:
no change in both supply and demand
A decrease in demand
A decrease in supply
a decrease in both supply and demand
18
Which of the 4 courses of action would a
rational
consumer choose?
Action D
Action A
Action C
Action B
19
The interest rate that the Fed charges banks to borrow money from them is known as:
Equilibrium price
Discount rate
Annual Percentage Rate
Reserve requirement ratio
20
A type of unemployment that occurs when there is a downturn in the economy:
Frictional
Natural
Cyclical
Structural
21
The efficient use of resources is represented by point(s):
Point D
Point E
There are no points that represent an efficient use of resources.
Points A, B, and C
22
The decrease in the price of hotdogs results in a decrease in the demand for hamburgers. These two products are:
Substitute goods
Complementary goods
Final goods
Intermediate goods
23
When the government uses taxes and spending to address economic problems, it is practicing:
trickle-down economics
monetary policy
fiscal policy
free enterprise
24
The graph below shows:
An increase in both supply and demand
An increase in demand
An increase in supply
No change in both supply and demand
25
Which of the following lists the three basic economic questions that must be answered?
What to produce, How to produce, Why to produce
What to produce, When to produce, For whom to produce
When to produce, How to produce, For whom to produce
What to produce, How to produce, For whom to produce
26
Which of the following insurance coverages is required by law?
Auto Insurance
Life insurance
Health Insurance
Homeowner’s/Renter’s Insurance
27
When the Federal Reserve makes decisions about the control of the money supply their decisions are referred to as:
Fiscal policy
Investment policy
Monetary policy
Market policy
28
The ideas & motivation a person has to produce something that people want to buy describes which factor of production?
Land
Capital
Entrepreneurship
Labor
29
If the Federal Reserve wants to INCREASE the money supply, it can do all of the following EXCEPT:
Reduce the reserve requirement
Purchase government bonds
Sell government bonds
Reduce the discount rate
30
The next best use of time, money, and/or resources is called:
equilibrium price
production possibility
opportunity cost
A rational decision
31
Freedom of choice and competition are commonly found in which type of economic system?
Socialist
Command
Market
Traditional
32
Which of the following is NOT an indicator rused by economists to measure the overall health of the economy?
Unemployment Rate
The PPF
Gross Domestic Product
Consumer Price Index
33
The physical effort of people to produce goods and services describes which factor of production?
Land
Capital
Labor
Entrepreneurship
34
What conclusion can you draw by looking at the graph below?
People who work at "high stress" jobs earn more than those with normal jobs
People with college degrees earn more than people with only a HS diploma
People with college degrees get fewer job offers
There is no discernable connection between education level and income
35
Which of the following would be an example of complementary goods?
Hot dogs, hot dog buns
Bar soap, body wash
DVDs, VHS tapes
Flashlights, candles
36
What is the most important factor a bank will consider when deciding to give someone a loan?
Age
Gender
Occupation
Credit score
37
In this business structure, the owner has full control, keeps 100% of profits, but also has 100% of the liability/risk:
Partnership
Limited Liability Corporation
Corporation
Sole Proprietorship
38
What is the Federal Reserve?
The nation's primary producer of coins
The nation's central banking system
The nation's budget committee
The nation's economic advisors
39
A PRICE CEILING is a government imposed:
Minimum amount that can be charged for an item
Maximum amount that can be legally charged for an item
Regulation on safety standards
A price ceiling is not government imposed
40
Someone buys a car for a large amount of money. They have completed an exchange in this part of the circular flow model:
Households/individuals
Firms/Businesses
Factor Market
Product Market
41
This headline is an example of which economic role of government?
Correcting for externalities
Protecting property rights
Stabilizing the economy
Maintaining competition in the market
42
If country XYZ produces 6 million blankets, how many shirts can it efficiently produce?
12
8
2
6
43
A type of unemployment that occurs when an individual voluntarily leaves one job to find another job:
Frictional
Cyclical
Structural
Natural
44
What is the out-of-pocket minimum that you are required to pay before insurance will cover any costs?
Deductible
Liability
Premium
Collateral
45
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 works 2 part-time jobs, but wants full-time
A person who quits work to care for aging parents
A person who stayed home to raise children but now starts looking for a job
46
Which graph shows an increase in price for suppliers?
Graph C
Graph A
Graph B
Graph D
47
When the price of a product is lower, people will demand/buy more of it. This describes:
Equilibrium
Gross Domestic Product
The Law of Demand
The Law of Supply
48
The fact that people have unlimited wants but limited resources is known as:
Scarcity
Surplus
Incentives
Opportunity Cost
49
The point at which both quantity demanded and quantity supplied are equal on a graph is known as:
Supply
Quantity
Equilibrium
Demand
50
The amount that is being taken out of your paycheck in taxes/deductions is known as:
Gross Pay
Premiums
Withholdings
Net Pay
51
What is the opportunity cost of increasing the production of dolls from 200 to 300?
350 fire trucks
100 fire trucks
150 fire trucks
200 fire trucks
52
When choosing a credit card, you should consider all of the following EXCEPT:
Credit limit
Penalties and fees
Annual Percentage Rate
If you can put a design on the card
53
All of the following are barriers to entry except:
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
In order to become a teacher, one must get a degree & become certified
54
Which of the following market structures is made up of
one firm
that dominates the market and supplies all the output?
Oligopoly
Perfect competition
Monopolistic competition
Monopoly
55
Unemployment that occurs when there's a mismatch between skills people have learned and skills the job market requires
Structural
Frictional
Cyclical
Natural
56
What is the consumer price index used for?
track changes in the level of wholesale prices in the economy
monitor changes in the level of real GDP
track changes in the stock market
monitor changes in the cost of living
57
Trade-offs exist and choices must be made because:
not all production is efficient
human wants and needs are limited at a particular point in time
buyers and sellers must often negotiate prices
society has only a limited amount of productive resources
58
According to marginal analysis, rational choices and decision-making involves:
taking action if marginal cost is GREATER than marginal benefit
taking action only if the decision involves needs - not wants
taking action if marginal benefit is GREATER than or EQUAL TO marginal cost
taking action if marginal benefit is slightly LESS than the marginal cost
59
Which of the following market structures includes
many
businesses that sell the
same
products?
Perfect competition
Monopoly
Oligopoly
Monopolistic competition
60
A PRICE FLOOR typically leads to:
Production Possibilities
Equilibrium
Surplus
Shortage
61
Economics is BEST defined as the study of how:
Modern businesses have grown and prospered.
Capitalism has survived in today's world
Choices are made due to the scarcity of resources
Various societies have dealt with unemployment and inflation
62
The economic system in which the government owns and controls the factors of production:
Mixed
Traditional
Market
Command
63
The way in which an economy answers the three economic questions determines its:
Market Structure
Production Possibilities
Fiscal Policy
Economic System
64
If your credit score is _________, your interest rate will be __________.
low , low
Credit scores to not impact interest rates
high , low
high , high
65
According to the graph, how many cookies will Grace buy if the price is $1.00 per cookie?
5
4
3
2
66
Which of the following people would be considered an entrepreneur?
Jerome cut the grass and his mother gave him $10
Dora opened a plant nursery that specialized in small trees and bushes
Bob got a job working as a cashier at Burger King
Tommy volunteered at a soup kitchen
67
An office building is an example of:
Capital
Labor
Entrepreneurship
Land
68
What is the opportunity cost for this person of moving from point a to point b?
$20 of income per week
$10 of income per week
$5 of income per week
$10 per hour of studying per week
