Econ Final
Private property
Allows people to own and control their possessions as they wish.
When the firms within an industry create an agreement to divide the market, set prices or limit production, we call this....
Collusion
The largest sector of the economy, included in the GDP calculation is _______________.
Consumption
Gross domestic product (GDP) is a method of calculating how much a country produces by adding together which 4 spending categories?
Consumption, Investment, Government Spending, Net Exports
GDP calculation
Consumption, Investment, Government spending, Net Exports
With the recent downturn in the economy due to the Covid 19 pandemic, Janet was laid off from her job at a local restaurant.
Cyclical
A hungry man is willing to pay a high price for food. After he is no longer hungry, he is not willing to pay the same high price. Which of the following best defines this example?
Diminishing marginal utility
Betty has been looking for a teaching job for over six months and has since decided to give up.
Discouraged worker.
When did Congress print paper currency for the first time?
During the Revolutionary War
It is the goal of the government to have zero unemployment.
False
Johanna recently turned 16 and got her first job working part-time at a gym near her house.
Employed
Economic freedom
Free to buy what you want, choose your occupation, your employer, and your job location.
Eddie recently quit his job in California to move to Texas to follow his dream of opening a food truck in Austin.
Frictional
Renee was a homemaker, but her children are now school age and she's decided to look for a part time job.
Frictional
When making risky investments, investors usually demand...
Higher compensation
How does the government operate in a free enterprise economy?
It establishes laws and rules to maintain competition
The study of the entire economy is called __________________.
Macroeconomics
divisibility
Money must be easily divided into smaller denominations
Which market structure is defined by a single producer?
Monopoly
Why doesn't the government try to eliminate all monopolies?
Not all monopolies are bad
Abel works in the kitchen at the prison he is currently serving a five year sentence in for assault.
Not in the workforce
Donna retired four months ago and is in the process of moving to Florida.
Not in the workforce
Jeff is a stay at home dad, who takes care of his three year old son.
Not in the workforce
You are part-owner of NewBrands corporation because you...
Own the company's stock
A decline in real GDP lasting at least two quarters or more is called a...
Recession
Which activity is illegal in a state with a right-to-work law?
Requiring union membership as a condition of employment
Which of the following is NOT a disadvantage of a franchise?
Standardized quality
Voluntary exchange
The act of buyers and sellers freely and willingly engaging in market transactions
command economy
an economy in which production, investment, prices, and incomes are determined centrally by a government.
Disequilibrium
any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market
conglomerate
business combination merging more than three businesses that make unrelated products
decreased demand for inferior goods
decreased demand for inferior goods Mariah is buying fewer boxes of macaroni and cheese, used cars, fast-food dinners, and generic products because her income rose
cyclical unemployment
demand for labor drops during a recession due to the decrease in the demand for goods and services.
financial impact of inflation on a fixed income
financially stressed because income does not increase when prices go up.
factor market in a free market economy
firms purchase factors of production from households.
Real estate
high risk investment due to the amount of the investment, the amount of time the money is tied up, and unpredictable nature of the market.
Industrial revolution and manufacturing
initiated the labor union movement in the U.S. during the 1800s; labor unions had a strong influence in the nation's economy.
Risky investment
investors expect higher compensation (return)
Society's answer to the 3 economic questions
it's based on the importance attached to various economic goals and societal values
Credit Cards
means of access to preapproved lines of credit granted by a bank or finance company. Risk ending up with the equivalent of a never ending loan.
Dave gets a job at a grocery store, which pays him an hourly wage in exchange for his labor. Dave is participating in...
The factor/resource market
Which of the following is NOT true about what happened to the coining and printing of money directly after the American Revolution ended?
The federal government could start printing money again as long as they kept the supply limited.
Which of the following is NOT a factor affecting elasticity?
The good's price range
Profit motive
The main reason most people go into business is to make money. As a result, businesses seek to keep costs down and sales up.
Which of the following correctly describes the relationship between the law of supply and law of demand?
They work inversely. As price increases, demand decreases while supply increases.
Which of the following prohibits workplace discrimination on the basis of race, sex, color, religion or nationality?
Title VII of the Civil Rights Act of 1964
You own a successful bicycle repair business. You are considering incorporating in order to...
To avoid personal liability
Which statement best explains why money was invented?
To facilitate the exchange of goods and services
What's the purpose of fiscal policy?
To influence economic conditions through the use of government spending and taxation.
natural monopoly
a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms due to economies of scale
Recession
a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
401(k) plan
a tax-deferred investment and savings plan that acts as a personal pension fund for employees
individual stockholders
face limited liability for the firm's debts in a corporation.
economies of scale
factors that cause a producer's average cost per unit to fall as output rises
barriers to entry
factors that make it difficult for new firms to enter a market
When Jason buys a DVD player vs. a digital camera, the opportunity cost is?
the digital camera
Inflation is defined as an increase in?
the general price level of all goods and services
When the seller has a surplus
they will likely lower the selling price of the product
Why do Americans want the government to intervene in their free enterprise economy?
to protect the public interest
Unemployed
people not working who have looked for work during previous 4 weeks
Price floors are designed to help the...
producer
example of the law of demand
when shoes at a local shoe store went on sale and the store sold almost every pair of shoes in less than a day, by the time they were restocked the sale was over and fewer shoes were purchased.
labor unions established
40 hour work week, overtime pay, no work weekends, safety standards
Which of the following would be a likely result of a price ceiling on apartment rents?
A shortage of rental units
If retirement is a future goal for someone, what type of asset should they make a priority of investing in?
A 401(k) account
sole proprietor
A business owned by one person; has unlimited personal liability
Which of the following would cause movement along the demand curve, as opposed to a shift in the entire curve?
A change in price
Mariah recently graduated from college and has gotten her first job. She is buying less boxes of macaroni and cheese, used cars, fast food dinners, and generic products due to her rising income. This shift in the demand curve caused by Mariah's income has resulted in...
A decreased demand for inferior goods
oligopoly
A market structure in which a few large firms dominate a market
A shift to the left of the supply curve could be caused by, which of the following?
A natural disaster.
Which of the following statements best explains why workers began forming unions?
A united workforce was more likely to bring about changes in the workplace.
What gives people and businesses the opportunity to make their own decisions?
Economic freedom
Which of the following employee protections did labor unions help to establish?
All of the above
Which of the following is a basic characteristic of money?
All of the above
You pick up a $1 bill. What are you holding?
All of the above
Which of the following is NOT an example of price discrimination?
American Airlines announces a price increase on all plane tickets.
A period of recovery from a recession is known as...
An expansion
Most banks are established...
As corporations
Labor
Ex : a third grade teacher
Capital
Ex : computers used to produce magazine articles.
Entrepreneur
Ex : the developer of a new smartphone app.
Which of these is an example of a nonmarket transaction?
Babysitting as a favor to a friend.
In Consumer Theory, we assume rational consumers will...
Be utility maximizers.
Land
Ex : the water used to generate electricity.
Why are intermediate products excluded from macroeconomic calculations of GDP?
Because their value is included in that of the final product.
Franchise
Business owners pay fees and royalties to the parent company in return for the right to sell products and services.
Which of the following is NOT a benefit of having a checking account?
Can be difficult to access you money
The Federal Reserve is the nation's ___________bank.
Central
Which of the following is a function of the Federal Reserve?
Clearing checks, setting the fractional reserve rate, lending banks money
In a ____ economy, questions of what, how, and for whom to produce are answered by the government?
Command
Which of these economic systems have the LEAST in common?
Command economy and capitalism
A company with three or more businesses that make unrelated products is called a ______________.
Conglomerate
The risk of ending up with the equivalent of a never-ending loan is one of the disadvantage of using...
Credit Cards
Corporation
Decisions and daily operations are determined by managers and board of directors, not the original owner or founder. Have all the rights of an individual, according to the law.
diminishing marginal utility
Decreasing satisfaction or usefulness as additional units of a product are acquired
When the quantity supplied is not equal to quantity demanded in the market, we call this....
Disequilibrium
Our demand for an item which has many substitutes is likely to be
Elastic
Which of the following is NOT one of the 3 main economic goals for the United States?
Equity
Of the following, who is the LEAST affected by inflation?
Flexible income receivers
A person who believes in the doctrine of laissez fair would disapprove of...
Government funding of education.
fiscal policy
Government policy that attempts to manage the economy by controlling taxing and spending.
Three ways people can save money with little risk, include...
Having a savings account, buying certificates of deposit, and contributing to a retirement account.
when supply ____________, prices fall, and quantity demanded ____________ to reach a new equilibrium.
Increases
If total revenues increase when a firm raises the price of Good X, then this tells us that the demand for Good X is...
Inelastic
Buying a new house built this year would be included in which component of GDP?
Investment
What best explains why a nation's GDP is an indication of its citizens' overall well-being?
It gauges the number of voluntary economic transactions occurring in that nation
Which of the following statements best describes the purpose of the production possibilities curve?
It identifies all possible combinations of goods and services an economy can produce
What is an important advantage of a free market?
It offers a wide variety of goods and services
What is the main advantage of a mutual fund for an investor?
It offers diversity in investment
Fiat money is...
Legal tender because the government decreed that it is an acceptable means to pay debts.
Assuming the government does not interfere in the market, a seller who has a surplus of a product is likely to
Lower the selling price of the product.
What incentive do manufactures have to sell their products?
Making profits on sales
The functions of money are...
Medium of exchange, unit of account, store of value
Not in the workforce
Military, retired, people in-prisoned, stay at home parents, students.
The school district gives all teachers at Westlake High School a 10% raise. This would likely increase each teacher's demand for...
Normal goods
Which two market structures have the highest barriers to entry?
Oligopoly & Monopoly
Which of the following best describes the role of the consumer in the flow of the financial system?
People have places to safely save and borrowers have sources of financial capital.
Which of the following market structures is characterized by having a large number of firms, identical products, and low barriers to entry?
Perfect Competition
You can easily carry money in a pocket or a purse. This reflects what characteristic of money?
Portability
Movement along the supply curve measures a change in ________________ supplied.
Quantity
An economist would use real GDP rather than nominal GDP to measure growth because
Real GDP reflects output more accurately than nominal GDP by using constant prices.
Which of the following would be the higher risk investment?
Real estate
What is the motivating force behind the free market?
Self-interest
The U.S. government can spend more money than it is generating through taxes by...
Selling government bonds
With regards to Fiscal policy, which of the following falls under mandatory spending in budget?
Social security, interest payments on outstanding debt
Bryan was let go from his job as a temperature checker at the nearby hospital, as the hospital recently purchased a robot that can check patient temperatures as they come in the building to limit exposure to the Covid 19 virus.
Structural
Stacy recently lost her job as insurance underwriter because the company she worked for decided to outsource her position to another country.
Structural
What type of monopoly legally exists because the firm owns or controls a manufacturing method, process or other scientific advantage?
Technological
Monetary policy is the action taken by ____________ to help encourage the health of the economy through managing the money supply and interest rates
The Federal Reserve
Why would the sale of second-hand cars NOT be included in the calculation of GDP?
The car does not represent new production.
Which of the following is NOT a reason why labor union participation has declined over time?
The decline of white collar jobs
According to the law of supply, the higher the price,
The larger the quantity produced
When shoes at a local shoe store went on sale at 50 percent off the regular price, the store sold almost every pair of shoes it had in less than a day. By the time the stock was replenished, the sale was over and very few shoes were purchased. Which of the following does this illustrate?
The law of demand
unlimited liability
The owner is personally and fully responsible for all losses and debts of the business
Why do economists often say "there is no such thing as a free lunch"?
The resources used to make the lunch are no longer available to produce other goods.
Competition
The rivalry for customers among those companies or individuals who produce the same kind of goods and services.
Which of these is an accurate statement about mixed economies today?
There are more mixed economies in the world than any other kind.
Partnership
There is a high potential for conflict.
By 1861, about how many kinds of paper currencies were in circulation in the U.S.?
Thousands
Which is a good synonym for the word barter in the term barter economy?
Trade
Kyle recently graduated from college and has his first job interview set up at an accounting firm.
Unemployed
Sole Proprietorship
Unlimited liability is one of the main disadvantages of this type of business. It is the least regulated form of business.
What is the basic problem of economics?
Unlimited wants and limited resources.
The overall happiness or satisfaction obtained from consuming a good is known as ...
Utility
A joining of two or more businesses that are involved in different stages of producing the same good or service is called which of the following?
Vertical merger
Societies are faced with which three basic questions about production of goods?
What, how, and for whom
Reason for forming unions
a united workforce was more likely to bring about change.
Selling Bonds
allows the government to continue to spend more than they're taking in.
Consumer Theory
assumes rational consumers will be utility maximizers
The Industrial Revolution & manufacturing
beginning of the labor union movement
purpose of free-enterprise system
consumers buy more of a good when its price decreases and less when its price increases
economic impact of a holiday fad
creates a rapid shift to the right in a market demand curve
One dollar bill
currency, A Federal Reserve note, fiat money
Production possibilities curve
identifies all possible combinations of goods and services and economy can produce.
Federal Reserve System
improved the banking industry in the 20th century by serving as a central bank with the power to lend to other banks in time of need.
The Law of Demand states that as prices ______________, demand _______________.
increase, decreases
Consumption
larges sector of the economy that is included in GDP
Functions of Money
medium of exchange, unit of account, store of value
fiat money
money that has value because the government has ordered that it is an acceptable means to pay debts
taxes
primary source of revenue for the federal government
Low risk investments
savings account, CDs and retirement accounts (mainly saving)
reason franchising has become popular
small franchise owners enjoy a degree of control and can benefit from the support of the parent company
return
the money an investor receives above and beyond the sum of money initially invested
law of supply
the price that balances quantity supplied and quantity demanded
Government intervention
to protect the public interest
frictional unemployment
unemployment that occurs when people take time to find a job
Structural unemployment
unemployment that occurs when workers' skills do not match the jobs that are available or the position has been outsourced.
