The most important characteristics of an open market are?

efficiency, freedom, growth, competition, and incentives

The two markets in the circular flow model are the?

resource and goods and services, factor and product

process leading to innovation, high profit, better goods

Scarcity is defined as?

unlimited needs and wants limited resources

Rule of 72 states that if your divide the interest rate by 72 it will show for an investment?

how long it will take to double the principal

A point on the production possibilities curve represents

full employment, maximum efficiency, and full production

Goals and values of the United States economy are

stable interest rates, balanced budget, and low deficit, growth, price stability, full employment

The three basic economic questions are?

What to make? How to make it? For whom to make it for?

A change in demand occurs because of a change in _________.

buyers, income, taste, expectations, substitute or comp. $

Three types of economic systems

free market, command, and mixed.

increase in GDP, an increase in the production of goods and services

The advantages of a free market are

self-regulating,efficient,competition,innovation, freedom

52-Week High and Low –

High & low prices of a stock traded in the last 52 weeks.

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EOC- CFE Review Game updated 12-6-2017

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EOC-CFE review game

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Questions 125

Answers

1
The most important characteristics of an open market are?
goods, services, resources, and income
scarcity, factors of production, self-interest, revenue
efficiency, freedom, growth, competition, and incentives
income, revenue, resources, and opportunity costs
2
By moving factors of production from one good to another, the cost of the second item increases
decreasing cost
law of increase opp. cost
cost shift
exponential cost
3
Marginal cost is the cost of producing one additional product.
false
true
4
Perfect competition: many buyers and sellers, identical products, informed buyers and sellers.
true
false
5
The large number represents the
current market price
current ask
current bid
previous close
6
Typically a person will spend between ________% of their net monthly income on housing.
20% to 30%
22% to 27%
28% to 35%
9% to 12%
7
Which would be the ideal buy price?
$303.64
$304.00
$306.64
$305.00
8
An increase in supply is depicted with a shift of the supply curve to
the right
a shift in the demand curve to the right
the left
a movement along the curve
9
The flow of money in the resource market goes from the ______ to the ______?
household / business
household / government
business / government
business / household
10
The two markets in the circular flow model are the?
resource and goods and services
black and gray market
domestic and foreign market
factor and product
11
Competition is a
restrictive, depressing, staleness
process leading to innovation, high profit, better goods
process leading to complacency, arrogance, ignorance
process leading to stagnation, lower profit, inferior goods
12
A group of buyers and sellers looking to gain maximum utility from producing and consuming?
economic system
market
producers
consumers
13
If demand increases and supply is constant, price will
increase
stay the same
decrease
14
If demand is constant and supply decreases, price wil
increase
decrease
stay the same
15
Scarcity is defined as?
limited needs and unlimited resources
unlimited needs and wants limited resources
limited wants and unlimited resources
limited needs and wants unlimited resources
16
L.of Demand,increase price result decrease purchases, decrease price causes increase purchases.
true
false
17
Rule of 72 states that if your divide the interest rate by 72 it will show for an investment?
the investments capital gain
the investment dividend
how long it will take to mature
how long it will take to double the principal
18
Substitution effect,buy less of goods at higher price and more of other low cost goods.
false
true
19
A point on the production possibilities curve represents
full employment, maximum efficiency, and full production
maximum utility
inefficiency
rational self-interest
20
Goals and values of the United States economy are
stable interest rates, balanced budget, and low deficit
inequality, discrimination, oppression
growth, price stability, full employment
restrictions, regulations, and high taxes
21
(Q2-Q1)/[(Q2 + Q1)/2 / (P2+P1)/[(P1 + P2)/2]= PED using Mid-point or standard formula?
Standard formula
Mid-point formula
22
The three basic economic questions are?
Make luxuries? Make necessities? Make exports?
Make imports? Make superior goods? Make inferior goods?
What to make? How to make it? For whom to make it for?
cost to make? Need? or Want?
23
Monopolistic competition has many firms, few barriers, some price control, different products.
true
false
24
Demand schedule is a table of prices and quantities of goods.
false
true
25
Fixed cost of production are rent, taxes, salaries.
false
true
26
Expansion, peak, contraction, trough, and recovery (expansion) comprise the business cycle.
true
false
27
A change in demand occurs because of a change in _________.
technology, taxes, subsidies, # of sellers
price
resource availability
buyers, income, taste, expectations, substitute or comp. $
28
Three types of economic systems
radical, liberal, conservative.
socialist, communist, democratic.
free market, command, and mixed.
oligarchy, monarchy, parlimentary
29
A price floor = highest price a good can sell for, below the equilibrium / market price.
true
false
30
The dollar value of all final goods and service produced in a given year is GDP. C+I_g+G+ X_n
true
false
31
Socialism favors democratic means to provide political and economic equality.
true
false
32
Income, taste, expectations, population,and related goods prices cause a change in demand.
false
true
33
As more workers are added, greater production occurs is called increasing marginal returns.
true
false
34
Economic growth is
increase in GDP
increase in GDP
an increase in the production of go
an increase in the production of goods and services
35
Public water, electrical, cable tv, trash pick up are examples of natural monopoly.
false
true
36
Variable cost of production are resource prices, electricity, and labor costs.
true
false
37
The advantages of a free market are
apprenticeship foundation using traditional values
competition, gov't. regulation, resource restriction
self-regulating,efficient,competition,innovation, freedom
regulated by the government, resource restricted, gov't run
38
A savings account that limits withdrawals to 6 a year and pays a higher interest rate is
bond
Certificate of deposit
a passbook savings
money market account
39
Guns and butter refers to which trade-offs?
factors of production
fiscal and physical goods
capital and consumer goods
opportunity cost
40
What is the least risky investment?
Stocks
Futures, options, and other derivatives
Bonds
Fixed annuities
41
The factor of production represented by natural resources. ( property, livestock, water, & oil)
entrepreneurship
land
labor
capital
42
As price increases, quantity supplied increases.
false
true
43
Multinational is a corporation operating in more than one country.
false
true
44
52-Week High and Low –
High & low quantity of a stock traded in the last 52 weeks.
High & low prices of a stock traded in the last 52 weeks.
High & low prices of a stock traded in the last 52 hours.
High & low volume of a stock traded in the last 52 weeks.
45
The factor of production that receives the payment of rent/ lease is
labor
capital
entrepreneur
land
46
Corporation is stock holder owned, limited liability, legal entity (individual identity).
true
false
47
Coffee and tea are _________ goods?
substitute
luxuries
inferior
complementary
48
Sole proprietorship; one owner, unlimited liability, total profit, full control of business.
false
true
49
Vertical merger is joining two or more companies together with complimentary resources.
false
true
50
a market condition in which securities / stock prices fall and confidence declines.
Bear market
Bull market
Capital loss
Capital gain
51
If demand decreases and supply is constant, price will
decrease
increase
stay the same
52
A bond is
a type of savings certificate
a dividend from an investment
a tax you pay on your income
a loan to a corporation or government
53
An internal tax imposed on the producer,seller, & consumer of products or services. (alcohol)
excise
credit
tariff
duty
54
A mutual fund is
managed investment with money pooled to buy stocks and bonds
fractional ownership a a single corporation
an interest earning FDIC insured account
an IOU
55
As more workers are added, quantity of products produced decreases, diminshed marginal returns.
false
true
56
A depression (trough) lasts _______. High unemployment,drop credit, low output, bankruptcy
two or more financial quarters
six months
two or more years.
3 months
57
An activity performed by someone for someone for a fee, commission, or payment is a
service
good
favor
courtesy
58
Communism (government control) is combined with a centrally planned command economy.
true
false
59
The flow of money in the product market goes from the _______ to _______.
household / government
business / government
business /household
household / business
60
As more workers are added, less production occurs is called increasing marginal returns.
false
true
61
The intersection of the demand and supply curve represents
utility maximization for the producer
producer profit maximization, consumer utility maximization
equilibrium/ market clearing price
profit maximization for the consumer
62
Rent control is an example of a price ceiling.
true
false
63
The factor of production that receives the payment of interest is
entrepreneur
labor
capital
land
64
A __________tax requires percentage paid in tax decreases as earned income increases.
progressive
excise
regressive
proportional
65
Supply changes occur from subsidies, technology,resource costs, taxes,regulation.
true
false
66
A ___is a corporation made up of different, unrelated businesses. Controlled by one business.
cooperative
multi-national
partnership
conglomerate
67
The flow of money from the bank to the business represents
interest received from an investment
fiscal capital
interest on a loan
real capital
68
Stock quote: High / Low represents the
the highest and lowest sale price for the year
the low closing price
high open price
stocks highest and lowest sale price of the day
69
What is the invisible hand?
an evil result of greed.
The benefit gained from rational self-interested people.
a negative externality
positive result of looking out for your own welfare.
70
This a business or organization owned by and operated for the benefit of the user-owners
sole proprietorship
partnership
cooperative
corporation
71
The determinants of supply are changes in resource prices, technology, taxes and subsidies,...?
number of suppliers
supplier expectations
price of other goods
demand
72
All opportunities given up to pursue an activity are?
tradeoffs
opportunity cost
loss
gain
73
A ___________ tax requires a percentage of income tax increase with increases in income levels.
regressive
sales
proportional
progressive
74
How does a mixed economic system answers the three basic economic questions.
individuals, society, and government decide.
individuals decide.
government decides.
society decides.
75
Economic freedom is
mandated resource use.
restricted choices and resources.
unlimited resource availability.
personal choice about using resources to create a good
76
Microeconomics study economy as a whole,macroeconomics study economic behavior of household.
false
true
77
The profit a person receives from selling stock is called a _________?
Yeild
dividend
capital gain
capital loss
78
a financial market of a group of securities in which prices are rising or are expected to rise.
Reccession
Bull market
Capital gain
Bear market
79
A change in quantity demanded occurs because of a change in_________.
# of buyers
price
price of substitutes
income
80
A company where owners are not liable personally (seizure of assets) for the company's debts.
Limited liability company
Unlimited liability company
multi-national
conglomerate
81
Structural, frictional, cyclical, are types of unemployment.
false
true
82
The picture is the Mid-Point or standard formula for Price Elasticity of Demand?
Mid-point
Standard
83
The person who uses land, labor, captial, and their own personal skill in business is
liscensee
venture capitalist
angel investor
an entrepreneur
84
A _____________tax requires every income earner to pay the same percentage tax on their income.
proportional tax
progressive
income
regressive
85
GDP (Gross domestic product) total $ value of all goods and services sold in a year.
true
false
86
A good or service that is life sustaining is a
luxury
need
royalty
want
87
What does this picture reference?
price fluctuations for the stock for the month of June 2015
which days of the month the stock traded at a low price
which days of the month the stock traded at a high price
a 30 day / 1 month chronology of the stocks prices
88
Real GDP is adjusted for inflation. Nominal GDP is not.
true
false
89
Disadvantages of a free market economy
unregulated, profit motive, freedom
lower prices, better products, more choices
fewer choice, quality concerns, gov't. regulation
income inequality,overproduction/greed, profit v. safety
90
A good or service that is not a necessity is a
want
need
inferior
royalty
91
Oligopoly is a market few firms, high startup cost (barriers), significant control over price.
true
false
92
Monopoly is a single seller market, high barriers to entry, seller has complete price control.
false
true
93
Who was Adam Smith?
The Wealth of Nations
invisible hand
rational self-interest
father of modern economics
94
Incentives are
decrease in corporate taxes
increase in business subsidies
motivational energizers (paid leave)
increase profit motive
95
Which price would be the ideal sale price?
$303.64
$304.00
$303.17
$303.01
96
Economic efficiency is
resources are allocated to maximize waste.
a point under the production possibilities curve.
resources are allocated to minimize waste.
a point on the production possibilities curve
97
Using the Consumer Price index, a market basket of goods can be compared to predict inflation
true
false
98
The study of how people satisfy their needs and wants is ?
psychology
entrepreneur
Sociology
Economics
99
Minimum wage is an example of a price floor.
true
false
100
____________ Fiscal Policy increases government spending and lowers taxes.
progressive
regressive
Contractionary
Expansionary
101
Horizontal merger is joining two or more companies competing in the same market.
false
true
102
How does a traditional economic system answers the three basic economic questions.?
society, individuals, and government decide.
individuals decide
government decides.
people (society) based on tradition decide.
103
Coffee and doughnuts are ______________ goods?
luxuries
complementary goods
substitute goods
inferior goods
104
Contractionary fiscal policy consists of
raising taxes
decreasing subsidies
a reduction in government spending
105
The determinant of demand are
# of sellers, resource prices, taxes, technology
tastes,income,# of buyers,expectations, related good prices
politics, religion, gender, and income
gender, ethnicity, occupation, and income
106
A product that is a necessity or a luxury that satisfies a need or a want is a
inferior product
superior service
service
good
107
How does a command economic system answers the three basic economic questions?
individuals decide
individuals, society, and government decide.
society decides
government decides
108
If demand is constant and supply increases, price will
increase
decrease
stay the same
109
A recession is more than two months consecutive contraction of GDP.
true
false
110
Expansionary monetary policy consists of the FED
lowering the federal funds rate
selling government securities
buying government securities in the open market
decreasing the reserve requirements for banks
111
A shortage occurs when the quantity supplied is less than the quantity demanded at a price.
false
true
112
The factor of production that receives the payment of wages and salary is
entrepreneur
labor
capital
land
113
The human resources, natural resources, and capital resources are
fire-fighter, water, & building,
runner, grass, and shoes
truck driver, diesel, truck
farmer, pasture land, & fence
114
Demand is the desire and ability to purchase something.
true
false
115
What is opportunity cost?
positive externality
negative externality
an opportunity lost due to making a choice.
an opportunity gained due to making a choice
116
A change in quantity supplied results from
a change in prices
a change in the number of suppliers
a change in resources prices
a change in the price of related goods
117
free markets to regulate themselves by competition, supply, demand, and self-interest.
Paul Krugman
Adam Smith
Jacob Clifford
David Ricardo
118
Money is anything that represents value and a medium of exchange.
true
false
119
The glass ceiling,an unofficial, invisible barrier limiting people from advancing in business.
false
true
120
Investing; directing financial assets into profitable stock, bonds, mutual funds, and futures.
false
true
121
As more workers are added, fewer products are produced this is increased marginal returns.
false
true
122
Using a decision making grid helps when making a choice by enabling cost and benefit analysis?
False
True
123
Type of business expense where the owners are liable for the debts owed by the business
Refusal
bankruptcy
Limited Liability
Unlimited liability
124
A shortage occurs when the quantity supplied is less than the quantity demanded at a price.
false
true
125
Diversification; investing money in different places to minimize risk and maximize gain.
true
false

EOC- CFE Review Game updated 12-6-2017 Flashcards | StudBud