Savings account deposits have

low return, but are easy to access

Each additional donut you eat gets less tasty. This is due to the

law of diminishing marginal utility

Which of the following statements about communism is accurate?

Resources are owned by the government.

Stagflation is best defined as

A decline in the GDP combined with a rise in price levels

10 people can make 30 hats, you hire 7 new employees but you only produce 10 more hats. Why?

law of diminishing marginal returns

Labor unions were formed because workers wanted to change

the dangerous working conditions & long hours in factories.

The opportunity cost of enjoying your favorite television show could be

staying after school to study for a test with friends

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Econ Exam Review

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Created as a end of the semester review before taking their Economic exam.

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Questions 125

Answers

1
The opportunity cost of doing your HW on a Sat. night is < it would be on a Thursday night.
False
True
2
In a dispute, serves as a third party to determine settlements that are legally binding
mediator
boss
arbiter
labor union member
3
A profit-seeker who develops a new product and assumes the risk of profit or loss.
producer
entrepreneur
seller
stock broker
4
What percentage must the unemployment rate be under to be considered healthy?
4%
3%
2%
1%
5
In a market economy, real power in the marketplace is held by the
seller
government
consumer
producer
6
Savings account deposits have
high return, but are hard to access
low return, but are easy to access
low return, but are hard to access
high return, but are easy to access
7
Legal protections resource owners have that allow them to use their resources as they see fit
monopolies
economic rights
voting rights
property rights
8
The study of how people use their scarce resources to satisfy unlimited wants.
microeconomics
scarcity
economics
production possibilities frontier
9
Mallory, 22, just graduated college and is looking for her first big career job. Mallory is
unemployed
scared
not in the labor force
employed
10
The economy of the US can be described as a
centrally planned economy.
traditional economy.
pure market economy.
mixed economy.
11
The fundamental economic problem is
scarcity
opportunity cost
TINSTAAFL
theory
12
The height of economic expansion in the business cycle is called
crest
peak
contraction
trough
13
Which country is not considered a developed nation?
Canada
Japan
China
South Korea
14
"The minimum wage is $7.50" is an example of a
positive economic statement.
economic choice.
normative economic statement.
marginal analysis.
15
Job loss due to technology replacing job's previously done by hand is called
structural
frictional
cyclical
16
An economic system that is based on private ownership of the factors of production is
mercantilism.
capitalism.
communism.
socialism.
17
Goods and services are bought primarily in the resource market.
True
False
18
With voluntary exchange, buyer and seller agree to do business together
for the mutual benefit of both
for the benefit of neither
only for the benefit of the seller
only for the benefit of the buyer
19
This is an example of a capital resource
a college education
job training
self-improvement courses
a warehouse
20
Gov. officials deciding the distribution of all resources is a feature of a
command economy.
market economy.
traditional economy.
mixed economy.
21
This is the market for goods and services. It is not a place, but rather a set of activities.
Factor market
Global market
Online market
Product market
22
An item you can touch that requires scarce resources to produce and satisfies wants.
land
good
capital
service
23
The value of the best alternative passed up for the chosen item or activity.
$15
scarcity
efficiency
opportunity cost
24
The addition of new resources often enables a nation to produce more goods and services.
False
True
25
Natural resources used to produce goods and services.
labor
goods
capital
land
26
The price of peanut butter increases. What will happen to jelly?
Supply of jelly will increase
Demand for jelly will increase
Supply of jelly will decrease
Demand for jelly will decrease
27
The chief advantage of a market economy is
security.
nationalization.
money.
freedom.
28
Which indicator measures the total value of all final goods and services made in a nation?
GDP
average household income
unemployment rate
inflation
29
How a society uses resources to satisfy unlimited wants and resolve what, how, and for whom is
marginal utility
an economic system
an incentive
scarcity
30
What does this graph show?
Business Cycle
Demand
Supply
Circular Flow of Income
31
An expansion in the economy's ability to produce.
production possibilities frontier
economic growth
efficiency
opportunity cost
32
Which of the following is not one of the Government's 3 goals for the economy?
decreased taxes
stable prices
full employment
economic growth
33
Consider the Circular Flow Diagram. A person hiring a waitress is participating in
circular flow market.
product market.
resource or factor market.
consumer market.
34
According to Karl Marx, all of history is a struggle between
producers.
classes.
businesses.
consumers.
35
Quitting your job is considered to be what type of unemployment?
structural
cyclical
frictional
36
Each additional donut you eat gets less tasty. This is due to the
real income effect
law of diminishing marginal utility
cost of inputs
law of diminishing marginal returns
37
Which of the following statements about communism is accurate?
Workers are often employed by private firms.
Resources are owned by the government.
Investments are undertaken by private parties.
Income distribution is determined by market forces.
38
What type of partnership includes all partners sharing equally in responsibility & liability?
limited
general
equal
limited liability
39
A recession is a prolonged economic contraction that generally lasts for
2 years
1-2 weeks
6-18 months
3-6 months
40
Chick-fil-a makes $250,000 weekly and must pay $30,000 to the franchiser. These payments are
royalties
income tax
assets
stock
41
Stagflation is best defined as
a rise in the GDP combined with a drop in price levels
A decline in the GDP combined with a rise in price levels
a decline in the GDP combined with a drop in price levels
a rise in the GD combined with a rise in price levels
42
According to Adam Smith, market forces coordinate production as if by
an invisible hand.
a court ruling.
a government order.
majority rule.
43
10 people can make 30 hats, you hire 7 new employees but you only produce 10 more hats. Why?
law of diminishing marginal returns
demand for hats decreases
law of diminishing marginal utility
Those people weren't trained well
44
Labor unions were formed because workers wanted to change
the dangerous working conditions & long hours in factories.
company efforts to hire & retain highly skilled workers.
the practice of featherbedding in the railroad industry.
the 1938 Fair Labor Standards Act, which banned child labor.
45
In economic terms, laissez faire means that the government
does not support capitalism.
gets involved in the marketplace.
supports socialism and capitalism.
stays out of the marketplace.
46
What type of curve is shown here?
Demand
PPF
Equilibrium
Supply
47
In the factor or resource market, businesses are the _____ and individuals are the _____.
owners/partners
customers/producers
partners/owners
producers/customers
48
Worker who performs manual labor for an hourly wage.
blue-collar
white-collar
semi-skilled
workers with minimal specialized skills and education
49
The opportunity cost of enjoying your favorite television show could be
deciding to save more of your income for your college fund.
loaning your best friend $20
spending $25 to buy a shirt.
staying after school to study for a test with friends
50
What occurs when the demand for goods exceeds the supply?
inflation - prices will rise
peak
unemployment
wage price spiral
51
Working at a job for which one is overqualified, or part time when wanting to work full time is
discouraged worker
full employment
underemployment
qualification deprivation
52
Which type of economy is the most common in the world?
Communist
Captialist
Traditional
Mixed
53
What is the fundamental problem in economics?
Some countries are the best at making EVERYTHING
Communism vs. Capitalism
Scarcity
You have to pay for things
54
Business owned and managed by a single individual
corporation
non-profit organization
franchise
sole proprietorship
55
Human time, effort, and talent, both physical and mental, used to produce goods and services.
labor
capital
service
land
56
Examines behavior and choices as they relate to the entire economy.
production possibilities frontier
microeconomics
economics
macroeconomics
57
Consider the Circular Flow Diagram. A person buying a Spotify subscription is participating in
circular flow market.
resource or factor market.
product market.
economic resources market.
58
A normative economist might conclude that
certain types of lotteries raise millions of dollars.
a lottery can be conducted in several ways.
certain types of lotteries raise more money than others.
a lottery is a bad policy b/c it burdens the poor.
59
The study of how individuals and nations make choices about how to use scarce resources.
Scarcity
Economics
Trade-off
Absolute Advantage
60
Owned by individual stockholders
franchises
partnerships
corporations
sole proprietorships
61
Sally is over 18 and a (paid) firefighter. Economically speaking Sally is
not in the labor force
brave
unemployed
employed
62
Land, Labor, Capital, and Entrepreneurship are the
Determinants of Supply
4 Factors of Production
4 Elements of Owning a Business
Determinants of Demand
63
In a simple circular-flow model, households supply all to firms through the resource market BUT
consumer goods
human resources
capital goods
natural resources
64
What is considered a normal unemployment rate when the economy is working properly?
4 to 6 %
8 to 10 %
0 to 3 %
10 to 12 %
65
Produced resources used to produce other goods and resources.
services
labor
capital
goods
66
How does a bank make most of its profit on its business?
by receiving fees from the government for handling accounts
by paying less interest on deposits than it earns on loans
by collecting fees on safe deposit boxes
by collecting fees on credit card purchases
67
Wilbur retired at 65 and is enjoying his beach house and grandchildren visiting. Wilbur is
my hero
employed
not in the labor force
unemployed
68
When goods or services are sent to be produced in a foreign country
outsourcing
embargo
developing countries
product placement
69
The stock market crash, known as Black Tuesday, occurred on
October 31, 1931
October 1, 1942
October 29, 1929
October 19, 1943
70
An object that has value b/c the holder can exchange it for something else of value is
exchangeable money
fiat money
valued money
representative money
71
Which of the following is NOT true of a pure market economy?
Prices guide resources to the most productive use.
Markets are regulated by the government.
Resources owners have property rights.
Markets answer the what, how, and for whom questions.
72
professional worker who earns a salary
semi-skilled
blue-collar
labor union member
while-collar
73
Income that retirees receive after working
mutual fund
hedge fund
life insurance
pension fund
74
The strategy of spreading out investments to reduce the risk of losing all funds is
par value
diversification
returns
liquidity
75
Which of the following is NOT one of the economic decision makers in chapter 2?
households
governments
stockbrokers
firms
76
The average value of a particular 30 set of stocks as a whole is called the
NASDAQ
S&P 500
Dow Jones Industrial Average (Dow)
NYSE
77
The U.S. stopped all trade with Cuba in 1960. This is an example of a(n)
standard
embargo
quota
tariff
78
Shows the combinations of two types of goods when resources are used fully and efficiently
production possibilities frontier
microeconomics
law of increasing opportunity costs
business cycle
79
Which of the following was one of the steps taken to recover from the financial crisis of 2008?
Trump's $20 trillion recovery plan
Bush's $700 billion dollar bailout
Clinton's financial tax increase?
No Child Left Behind
80
An outward shift of the PPC reflects an economic downturn.
True
False
81
What do we call the 2nd best option, or the thing you give up?
Opportunity Cost
Trade-off
Substitution
Regret
82
The most accurate measure of a nation's standard of living can by found by the
net national products
nominal GDP
real GDP per capita
unemployment rate
83
This incentive makes entrepreneurs willing to accept the risk of losing money
developing a new product
being their own boss
earning a profit
earning a wage
84
Freedom of economic choice is one of the chief advantages of a
developing economy.
traditional economy.
market economy.
communist economy.
85
The U.S. experiences a baby boom. What will happen to daycares?
Demand for daycares will increase
Supply of daycares will increase
Demand for daycares will decrease
Supply of daycares will decrease
86
What inflation percentage is considered healthy and normal?
1-2%
4%
2-3%
3-4%
87
Jessie's g'pa tells him that a dollar went farther when he was a child. He means that
U.S. currency is used more in foreign countries.
currency was more durable when he was young.
young people today do not take care of their money.
a dollar had more purchasing power.
88
An increase in the production of one good results in giving up more of the other good.
economic growth
opportunity cost
efficiency
Law of Increasing Opportunity Costs
89
A macroeconomist would study
a general decline in prices.
sharp rise of coffee prices.
fluctuation of oil prices.
a decline of cheese prices.
90
Subprime lending is when banks
lend to homebuyers who have too much money to need a loan
lend to homebuyers who have multiple houses to pay off
lend to homebuyers who have prime savings & banking accounts
lend to homebuyers who don't meet the criteria to afford it
91
The satisfaction received from using one more unit of a good or service is called
marginal cost
opportunity benefit
opportunity cost
marginal benefit
92
Everytime you exchange the use of one thing for the use of another it is a
Trade-off
Opportunity Cost
Substitution
Demand Curve
93
A company agrees to open part of its operations in China. This is called
horizonntal merging
offshoring
outsourcing
vertical merging
94
Producing the maximum possible output from available resources.
opportunity cost
equity
economics
efficiency
95
What is NOT true of scarcity?
Lack of money is a factor
There are insufficient productive resources to satisfy wants
It causes people to make choices and pass up opportunities
Without scarcity, there would be no need for prices
96
The Circular Flow Model is a tool for understanding
how the stock market operates in a market economy.
interpreting the flow of goods between trading countries.
the r'ship btwn traditional, command, & market economies.
the relationships among economic decision makers & markets.
97
Absolute loyalty to people in power is required in
authoritarian systems
traditional systems
socialist systems
market systems
98
Producers and consumers drive the economy of a
traditional economic system.
market economic system.
command economic system.
developing economy.
99
A microeconomist would study
a general decline in prices.
the ups and downs of the business cycle.
a rise in tea prices.
the impact of national tax policies.
100
Something intangible that requires scarce resources to produce and satisfies human wants.
labor
capital
goods
services
101
Karl Marx predicted in time that
factory owners would abandon the industrial system.
factory owners would revise the industrial system.
workers would overthrow the industrial system.
workers would be totally dominated by the industrial system.
102
Which of the following typically would not be discussed in a labor contract?
job security
holiday vacation days
safety conditions
boycotting strategies
103
Semi-independent business that pays fees to a parent company
non-profit organization
sole proprietorship
franchise
partnership
104
The money an investor receives beyond the sum of money invested is the
interest
bonds
yield
return
105
Today, there are
no pure market economies.
many pure market economies.
several pure market economies.
only two pure market economies.
106
An increase in the availability or quality of resources shifts the PPC inward.
True
False
107
Combination of 2+ firms involved in different production stages of the same goods & services
horizontal merger
company combination
vertical merger
conglomerate
108
The government raises tax rates on orange juice companies. What will happen?
Demand for OJ will increase
Demand for OJ will decrease
Supply of OJ will increase
Supply of OJ will decrease
109
In a dispute, serves as a third party to determine settlements that are not legally binding
labor union member
arbiter
mediator
semi-skilled worker
110
With capitalism, the distribution of goods and resources is determined by
traditional customs.
centralized planning.
government policy.
market forces.
111
Who are the two MAIN decision makers in the Circular Flow Model?
businesses (firms) and workers
governments and households
businesses (firms) and households
governments and businesses (firms)
112
What types of companies are most fast food restaurants?
corporations
sole proprietorships
franchises
general partnerships
113
What age group in the US has the largest percentage of its members living in poverty?
the middle aged
the elderly
children
young adults
114
Jonathon (25 years old) got laid off last year and has not looked for a job since. Jonathon is
not in the labor force
unemployed
employed
115
Examines behavior and choices as they relate to single markets, individuals, and businesses.
economics
macroeconomics
microeconomics
production possibilities frontier
116
Business cycle phase where jobs are plentiful, unemployment rates fall, and econ. growth occurs
trough
peak
contraction
expansion
117
What term is used to describe the unfortunate event where prices rise but your income doesn't?
Substitution Effect
Real Income Effect
Elasticity
Diminishing Marginal Utility
118
What percentage of GDP growth is considered healthy for our economy?
2-3%
1-2%
3-4%
4%
119
Honda opens 5 new factories. What will happen?
Demand for Hondas will increase
Supply of Hondas will decrease
Demand for Hondas will decrease
Supply of Hondas will increase
120
What is the name for when the quantity supplied and the quantity demanded are equal?
Equilibrium
Surplus
Shortage
Price
121
People lose their jobs due to a contracting business cycle
structural unemployment
cyclical unemployment
frictional unemployment
122
Moving railroads from government ownership to ownership by stockholders is an example of
nationalization.
privatization.
globalization.
socialization.
123
When a nation's economy privatizes, it changes from
government ownership to private ownership
public ownership to government ownership
private to government ownership
private ownership to public ownership
124
Karl Marx believed that surplus value was unfairly kept by capitalists as profit.
True
False
125
The annual income earned by a nation's firms and citizens is
Net National Product
Consumer Price Index
Gross National Product
Gross Domestic Product

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