econ final

Supporters of free trade agreements could use this map to argue which of the following?

Free trade breaks down barriers among nations.

Use the data table to answer the question that follows. Recall that specialization and trade enables countries to consume beyond their PPCs.Production Possibilities for One Year Cheese (millions of tons) Tomatoes (millions of tons) United States 4 2 Italy 1 1 Which statement is supported by the data table?

The United States should specialize in cheese and trade them for tomatoes from Italy.

A mechanic shop offers a 10-minute oil change and 30-minute brake check. There are two technicians who perform each of these services. Next week, the shop is offering a discounted oil change. How might this promotion affect the production possibilities curve for next week?

The shop would shift production to oil changes and away from brake checks.

Which of the following is another name for a positive externality?

Third-party benefit

flat income tax

when all taxable income is subject to the same tax rate, regardless of income level or assets.

Monopolistically competitive market

when many companies offer competing products or services that are similar, but not perfect, substitutes

Which of the following do consumers usually want to see rise with inflation?

Personal income

Which type of tax increases as a person's income increases?

Progressive income tax

Which market type is most beneficial for consumers?

Purely competitive market

The country has entered a period of economic growth, but prices are rising too rapidly. Which action would the Federal Reserve take to stabilize prices?

Raise the discount rate.

Economists warn that the nation is slipping into a recession. Which combination of fiscal policies has the most potential to prevent this trend?

Lower taxes and increase spending.

Which of the following industries benefits from government subsidies?

Agriculture

Culture Comics produces historical graphic novels and retails them through local shops throughout the United States. The publisher maintains an in-house staff of editors and illustrators but contracts out writing, printing, and distribution. Its printer uses domestically recycled paper but imports ink and much of its printing equipment from overseas. Which part of this scenario does segment D of the diagram reflect?

Consumers pay sales tax on purchases of novels.

Which of the following phrases describes the general function of the Federal Reserve System?

Control of the money supply

A business is doing well, and the owners think that with more funding it can become a recognized brand worldwide. To meet this goal of global expansion, the owners are willing to offer a portion of ownership to investors. Which organizational structure should they consider changing to for the business?

Corporation

Which of the following is counted in the money supply?

Currency

Imagine the federal government has a national debt of $12.6 trillion. Congress's budget for the coming year includes a spending projection of $5.1 trillion. Tax revenue is expected to be $4.8 billion. Which fiscal policy should Congress adopt to avoid increasing the national debt?

Decrease spending.

Which type of trade barrier is a tax on imported goods?

Tariff

Which of the following is a benefit of choosing a money market account over a traditional checking or savings account?

A money market account will typically earn a higher rate of interest.

A donut shop makes the best donuts in town. The owner tracks production over the course of seven days. Which of the following could explain the low production on days 4 and 5?

A new employee was being trained to make donuts.

A bookstore owner increases the price of museum photography books to $25. Which of these would occur?

A surplus, because the price would be higher than equilibrium price

Proportional income tax

A tax that takes the same percentage of income from all income groups

Which potential government policy reflects the broad economic goal of freedom?

Allowing parents to choose between public and private schooling for their children, through vouchers

A writer purchases a desk, computer, widescreen monitor, and ergonomic keyboard. What kind of resources are these?

Capital

Which term describes an investment approach intended to minimize risk and maximize returns?

Diversification

Which term describes a country undergoing rapid expansion and gaining significant worldwide attention for its growth?

Emerging

Imagine the Federal Reserve Board makes credit more available within the U.S. financial system by loaning money to banks. Which phase of the business cycle is the Fed trying to encourage?

Expansion

Which of the following are listed in a budget?

Expenses and income

Which of the following could be an outcome of unexpected inflation?

Export goods decrease.

In a command economy, who determines what to produce?

Government

Which product does the United States export because it has excellent farmland?

Grain

Which monetary policy is contractionary?

Increase the reserve requirement.

A committee is working on a proposal for improving resident participation in the local recycling program. Which of the following tasks aligns with the rational decision-making model step "identify all potential solutions"?

Interviewing leaders in other communities to find out how they encourage recycling

One idea is that individuals should answer the basic economic questions, but government should step in to prevent or address a crisis. Which economist(s) promoted this idea?

Keynes

Which term is another way to say "equilibrium price"?

Market price

Which of the following describes the quantity a business will produce to maximize its profits?

Where marginal cost meets marginal revenue

Limited liability corporation

a business structure in the U.S. that protects its owners from personal responsibility for its debts or liabilities.

Corporation

a legal and contractual mechanism for creating and operating a business for profit, using capital from investors that will be managed on their behalf by directors and officers.

Oligopoly

a market in which the industry is dominated by a few companies that are each influential participants in the market

Monopoly

a market structure where a single seller or producer assumes a dominant position in an industry or a sector.

Purely competitive market

a marketing situation in which there are a large number of sellers of a product which cannot be differentiated and, thus, no one firm has a significant influence on price

Sole proprietorship

a non-registered, unincorporated business run solely by one individual proprietor with no distinction between the business and the owner

regressive income tax

a tax that is applied uniformly regardless of income

partnership

an arrangement between two or more people to oversee business operations and share its profits and liabilities.

progressive income tax

one where the average tax burden increases with income.

barter

the exchange of goods and services between two or more parties without the use of money

mortgage balance

the full amount owed at any period of time during the duration of the mortgage

market price and equilibrium price

the market price where the quantity of goods supplied is equal to the quantity of goods demanded

Quantity-supplied price

the number of goods or services that suppliers will produce and sell at a given market price

currency

the physical money in an economy, comprising the coins and paper notes in circulation

marginal price

the practice of setting the price of a product to equal the extra cost of producing an extra unit of output

money supply

the sum total of all of the currency and other liquid assets in a country's economy on the date measured

quantity demanded price

the total amount of goods and services that consumers need or want and are willing to pay for over a given time.