How do comparative advantage and absolute advantage differ?

absolute:more can be made given resources; comparative:good made cheaper

US elects president who plans to decrease foreign trade tariffs. This will likely have what effect on the US dollar.

the dollar will tend to appreciate as demand for currency increases

Bill has saved $1,000. Which function(s) of money is BEST represented by Bill's $1,000 fun money?

unit of account and store value

Which statement does NOT describe a responsibility of the Reserve Banks?

They provide banking services, such as accounts, to individuals.

Which of these is an example of "entrepreneurship"?

Steve Jobs created Apple Computers in 1976.

Because scarcity exist, any strategy for allocating scarce resources must address

for whom to produce, how to produce, ad what to produce

Age, Sex, Model of car, Distance driven each day. What do all of these items have in common

All factors that can influence your automobile insurance premium

Which statement explains a major difference between 401k or 403b employer retirement plans?

403b: used by nonprofits etc; 401k: are offered by for-profit companies

Which BEST defines opportunity cost?

amount of one product must be given up to yield an addition unit of another

"Intended to eliminate effectively the implicit tax that reserve requirements used to impose on depository institutions"

interest rate on required reserves

Why do free trade agreements increase globalized trade?

they significantly decrease transaction cost.

Which of these is an accurate statement regarding homeowner's insurance?

covers everything on the property, +goods inside & the dwelling itself

Which of these is an accurate statement regarding renter's insurace?

It covers the items inside a dwelling rented by the policy holder

Correctly identify the outcome if the price of burritos in Colemanville drops from $7 to $4

A quantity of 400 additional burritos will be demanded

A shift from production level B to production level A would

result in an opportunity cost in the production of output X. Efficient use

What is NOT an argument to support free trade?

always welfare-improving b/c those who gain can compensate those who lose

An advantage to renting versus owning a home is renting

allows greater flexibility in one's living arrangement

Which retirement choice offers the biggest tax savings (tax deferment) during the period of saving for retirement?

401k b/c allows an employee to put upto $18,000 pre-taxed income in account

Which statement explains a major difference between a traditional Individual Retirement Program (IRA) and Roth IRA?

Traditional:tax deductible for year; Roth: tax breaks at time of withdrawal

legal limit on the amount of a good that can be imported into a country

Based on the information in the image, what would be the MOST likely response by a foreign producer of corn?

subsidies reduce competition & efficiency, & provide an adv to domestic

Which of these best describes an investment in human capital?

improving access to public libraries

Which statement BEST reflects an accurate and negative consequence of government regulatory practice on the economy?

increases costs and places industries at a competitive disadvantage

if the demand curve shifts to the left, what would be the resulting effect on equilibrium price and quantity?

price will fall and quantity will fall

Which of these would ba an opportunity cost of going to college?

the money you could have earned at a job

How does the stock exchange function as a secondary market for investors?

allows resell investments sothat business benefit from capital appreciation

As the supply shifts from S1 to S2, what can be inferred about the quantity demanded?

the quantity demanded will decrease

According to the data in the image, the US

paid over $10 billion in subsidies to domestic farmers in 2005

What is the purpose of mortgage insurance?

insurance compensation for the lender ifthe mortgage loan goes into default

The MAIN reason most people invest in a company is to

have their money make more money

Rachael can grade 100 essays or create 20 tests. Graycen can grade 120 essays or create 20 tests. Absolute advantage?

Graycen in grading essays; nobody in creating tests

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Economics Final

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Questions 60

Answers

1
The role of a() _ is to bring together buyers and sellers of stock
investment broker
corporate attorney
insurance adjuster
securities banker
2
How do comparative advantage and absolute advantage differ?
abs: relative when comparing production; comp: better at particular good
comparative:country is better at producing absolute:better at a few things
comparative:production of agricultural goods absolute:industrial production
absolute:more can be made given resources; comparative:good made cheaper
3
US elects president who plans to decrease foreign trade tariffs. This will likely have what effect on the US dollar.
the dollar will tend to appreciate as demand for currency increases
these factors don't tend to affect the value of a nation's currency.
the value of the dollar will decrease
the value of the dollar will increase
4
Sally recently received a gift of $10,000 for college. Since college is a year away, Sally should put her gift into a
savings account
money market account
certificate of deposit
checking account
5
Bill has saved $1,000. Which function(s) of money is BEST represented by Bill's $1,000 fun money?
medium of exchange and store of value
unit of account
medium of exchange
unit of account and store value
6
Which statement does NOT describe a responsibility of the Reserve Banks?
They lend to depository institutions
They provide banking services, such as accounts, to individuals.
provide key financial services such as distributing the nations currency
They supervise and examine state member banks.
7
All of these factors will be considered when determining the cost of your policy EXCEPT
your gender
your marital status
your age
your ethnicity
8
Plans are made to make the initial public offering of the new stock in Johns new tech firm. What scenario is described?
primary market
stock market
commodity market
secondary market
9
Saudi Arabia institutes a maximum 40% charge on imported food. What kind of trade is being described here?
quota
tariff
subsidy
embargo
10
Which of these is an example of "entrepreneurship"?
Michael Jordan joined the National Basketball Association in 1984.
Hank Aaron hit his 715th home run in 1974.
Steve Jobs created Apple Computers in 1976.
Bill Clinton became president of the United States in 1993.
11
Because scarcity exist, any strategy for allocating scarce resources must address
for whom to produce, what to produce, and which resources to produce
how to produce, and which resources to produce
for whom to produce, how to produce, ad what to produce
When to produce which resources
12
Age, Sex, Model of car, Distance driven each day. What do all of these items have in common
All factors that can influence your automobile insurance deductible
factors that can't legally be considered when determining your insurance
All factors that can influence your automobile insurance premium
all factors that can influence your choice of automobile insurance provider
13
Which statement explains a major difference between 401k or 403b employer retirement plans?
403b: optional supplemental retirement plan; 401k: employer-based plan
403b: used by nonprofits etc; 401k: are offered by for-profit companies
403b: not tax deductible at the time of withdrawal; 401k: tax-deductable
403b:tax breaks at the time of withdrawal. 401k:tax deductible for the year
14
Which BEST defines opportunity cost?
the least cost of absolute advantage when it comes to trading
amount of one product must be given up to yield an addition unit of another
the cost of producing those goods that are th most desired by a country
the most cost-efficient method of production
15
"Intended to eliminate effectively the implicit tax that reserve requirements used to impose on depository institutions"
discount rate
reserve requirement
interest rate on required reserves
open market operations
16
Restrictive import motorcycle licenses in India
trade barrier
export subsidy
import quota
tariff
17
Land, labor, capital, and entrepreneurship are
factors of production
the results of production
the basis of employment
results of supply and demand
18
Why do free trade agreements increase globalized trade?
they significantly decrease transaction cost.
They prevent countries from purchasing international goods
allow countries to not pay any money for international goods and services
use the same currency so that countries don't have to pay transaction cost
19
Which of these is NOT generally counted as part of the US money supply?
gold bullion
minted coins
checking accounts
paper currency
20
When purchasing a home, people usually only pay a fraction of the price of the home. This initial payment is known as a
mortgage payment
balloon payment
interest payment
down payment
21
Which of these is an accurate statement regarding homeowner's insurance?
It is optional but not required for people who own a home
covers everything on the property, +goods inside & the dwelling itself
It covers the structure of the home itself, not the items on the inside
it only covers items inside the home
22
The legal status of being able to repay debts is referred to as
being solvent
being broke
bankruptcy
unemployed
23
According to this diagram, where do individuals sell their labor?
in the revenue market
in households
in the factor market
in the product market
24
Which of these is an accurate statement regarding renter's insurace?
cost more than homeowners insurance due to high risk of rental properties
It covers the items inside a dwelling rented by the policy holder
It is usually provided by the landlord once a lease agreement is signed
covers everything on the property, +goods inside and the dwelling itself
25
Correctly identify the outcome if the price of burritos in Colemanville drops from $7 to $4
A quantity of 500 burritos will be demanded
A quantity of 400 additional burritos will be demanded
900 burritos will be supplied
The quantity demanded of burritos will rise by 20%
26
According to the data in the table, what Japan's opportunity cost when producing 1 gasoline vehicle?
1.4 gasoline vehicles
.8 electric vehicles
1.25 electric vehicles
.71 electric vehicles
27
The first step in creating a budget is
knowing what your income is
getting a bank account
cutting back on expenses
listing all of your expenses
28
A shift from production level B to production level A would
results in an opportuity cost in the production of output Y. Efficient use
represent an unattainable level of production. inefficient use of resources
result in an opportunity cost in the production of output Y efficient use
result in an opportunity cost in the production of output X. Efficient use
29
What is NOT an argument to support free trade?
free trade allows businesses to exploit economies of scale
free trade limits the influence of political groups
always welfare-improving b/c those who gain can compensate those who lose
free trade leads to efficient allocation of resources
30
An advantage to renting versus owning a home is renting
is only available to people with above average credit scores
doesn't require money being putdown before taking possession ofthe property
allows greater flexibility in one's living arrangement
can more easily be obtained with help from government-backed moertgages
31
Some companies allow you to buy or sell their stock directly through them without a broker. This is described as
direct stock plan
divedend reinvestment plans
stock funds
individual retirement account
32
the second step in creating a budget is
cutting back on expenses
listing all of your expenses
predicting what your income is
getting a bank account
33
What are the two main tools used for side fiscal supply?
reduction in the power of unions and increase in money supply
cuts in interest rates and taxes
tax cuts and deregulation
increase in the money supply and deregulation
34
Which retirement choice offers the biggest tax savings (tax deferment) during the period of saving for retirement?
Roth IRA b/c it allows a place to put post-taxed $s that can grow tax-free
All of the retirement options offer the same rate of growth
401k b/c allows an employee to put upto $18,000 pre-taxed income in account
Traditional IRA because the growth of the fund is taxed-deferred
35
Which statement explains a major difference between a traditional Individual Retirement Program (IRA) and Roth IRA?
Traditional: employer-based retirement plans; Roth: supplemental plans
Traditional:tax deductible for year; Roth: tax breaks at time of withdrawal
Traditional: supplemental plans; Roth: employer-based retirement plans
Traditional:tax breaks time of withdrawal; Roth:tax deductible for the year
36
an import quota is a
way to increase tariff revenues for the exporting country
legal incentive for members of WTO to increase their exports
legal limit on the amount of a good that can be imported into a country
tax on import quantities above the legal limit
37
Based on the information in the image, what would be the MOST likely response by a foreign producer of corn?
US farm subsidies protect consumers by providing a lower price
subsidies reduce competition & efficiency, & provide an adv to domestic
farm subsidies increase competition, resulting in ideal market conditions
farm subsidies increase efficiency due to the competition between farmers
38
Which of these best describes an investment in human capital?
decreasing sales tax
limiting on-the-job training
expanding free-trade agreements
improving access to public libraries
39
Which statement BEST reflects an accurate and negative consequence of government regulatory practice on the economy?
lowers risk of harm to consumers by requiring safety and health standards
promotes economic equity through the necessity of minimum wage
encourages entrepreneurship on safety measures and practices
increases costs and places industries at a competitive disadvantage
40
if the demand curve shifts to the left, what would be the resulting effect on equilibrium price and quantity?
price will rise and quantity will rise
price will fall and quantity will rise
price will fall and quantity will fall
price will rise and quantity will fall
41
Frank is not afraid of taking risks and investment lacks liquidity. Which investment would meet these characteristics?
certificates of deposit
real estate
stocks
bonds
42
Which of these would ba an opportunity cost of going to college?
the cost of banks and tuition
the money you could have earned at a job
the degree and the money you will earn
the cost of housing and food
43
How does the stock exchange function as a secondary market for investors?
allows public offerings to be bought by investors so busine. may raise fund
offers sale of new gov securities bythe Treasury to finance the gov deficit
offers an underground economic system to buy and sell without taxation
allows resell investments sothat business benefit from capital appreciation
44
New York Stock Exchange, NASDAQ, Fannie Mae, Freddie Mac. All of these are examples of
secondary markets
stock markets
product markets
primary markets
45
As the supply shifts from S1 to S2, what can be inferred about the quantity demanded?
the quantity demanded can not be determined
the quantity demanded will decrease
the quantity demanded will increase
The quantity demanded will not be affected
46
Which of these would NOT be likely to be found on a credit report?
payment of bills
refusal to use credit
late payment of debt
repayment of loans
47
According to the data in the image, the US
reduced barriers to trade and competition among domestic farmers in 2005
paid foreign farmers less than $10 billion in subsidies to produce corn
enacted tariffs to protect domestic farmers in 2005
paid over $10 billion in subsidies to domestic farmers in 2005
48
What is the purpose of mortgage insurance?
Insurance protection against loss &personal liability of the property owner
Insurance that protects against loss and liability against the lender
insurance protection against the risk of rising inflation and APR
insurance compensation for the lender ifthe mortgage loan goes into default
49
The MAIN reason most people invest in a company is to
help make the world a better place
get discounts on goods made by the company
have their money make more money
see other people succeed
50
Which of these would be considered a "Level 4" investment?
money market accounts
real estate
baseball cards
government bonds
51
Rachael can grade 100 essays or create 20 tests. Graycen can grade 120 essays or create 20 tests. Absolute advantage?
Graycen in grading essays; both in creating tests
Rachel in both grading essays and creating tests
Graycen in both grading essays and creating tests
Graycen in grading essays; nobody in creating tests
52
A _ expense is a cost that may happen each month, but one who's total amount may change from month to month
fixed
flexible
discretionary
variable
53
Which of these is a disadvantage to only using credit cards to make purchases?
Credit cards are only useful when making online purchases
using credit cards when making purchases often involves paying APR fees
there is less consumer protection when using credit cards
few stores accept credit cards as payment for goods and services
54
Which o these was a reason the US abandoned the "gold standard" in 1933?
the inflexibility of the money supply to stop recessions
there was too much gold in the money supply
there was a move to make silver the standard
the federal government was planning on replacing the gold
55
considering the correct answer from the previous question, which of these is another example of that market?
new refrigerators
customers a restaurants
steel for automobiles
internet providers
56
Which economic question does this headline answer?
how will it be produced?
what should be produced?
when will it be produced?
For whom it will be produced?
57
While supply is based on the willingness of producers to supply a good or services, demand is MOST LIKELY based on
the needs of governments
the ease of a product's use
the availability of complementary goods
the price of a good or service
58
What information is used to calculate your credit score?
the info that appears on your credit report the day a score is calculated
the average credit history from the previous year
information contained on a credit report from the last three months
credit report and bank statements
59
Which action by the Federal Reserve would help to slow down rising inflation?
raise taxes
lower interest rates
buy bonds
sell bonds
60
The opportunity cost of a move from point A to point B is
the increased production of good Y
the increased production of good X
the increased production of D
the increased production of C

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