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