Econ: final

The information above most likely describes an economy that operates as

A. A command economy

Based on the information above, which of these represents the real interest earned on Gina's account?

A. About $10

The chart above shows demand and supply curves for milk. According to the chart, there is a surplus of

A. About 5 million gallons per week at a price of $2.50 per gallon

Which of the following will most likely results in a decrease in a product's MC or equilibrium price?

A. An increase in supply, but no change in demand

Bridges, dams, and freeways are examples of a country's

A. Capital resources

Country A has decided to improve the quality of its human capital. To accomplish this, Country A would most likely increase investment in its

A. Educations systems, job training programs, and medical care

People make voluntary exchanges of goods and services in a free market mainly because they

A. Expect to be better off as a result of an exchange

People make voluntary exchanges of goods and services in a free market mainly because they

A. Expect to be better off as a rsult of an exchagne

Compared to market economies, command and traditional economy systems generally have

A. Fewer privately owned businesses

In a system of voluntary exchange, people

A. Freely trade fo rthe goods and services they need or want

Which of these events is most likely to occur in a command economy?

A. Government experts set prices for agricultural goods sold to the public

An economist would most likely associate the actions listed above with

A. Higher real interest rates

Which of the following are economic incentives that motivate businesses to expand production?

A. Increased profits

Which of the following terms would an economist most likely use to describe the cost of borrowing other people's money?

A. Interest

As the price of a good or service that producers are willing and able to offer for sale during a certain period of time periods rises (or falls), the quantity of that good or service supplied rises (or falls).

A. Law of supply

In which of these economic systems will product shortages or surpluses result in immediate and direct price changes?

A. Market economy

The MC price is the price at which

A. Quantity supplied equals quantity demanded

If the conditions listed above were part of Country A's economy, which of these would be the most likely result? [the price of milk is regulated by the gov't/the gov't supports the price of milk far above it's MC level for several years]

A. Surplus in the supply of milk

The principal amount of a loan is best described as

A. The balance used to calculate interest payments

What is the most immediate benefit of the events described above? [Jane owning a baker]

A. The partnership has added financial capital

Entrepreneurs typically accept the risks associated with starting a new business in exchange for

A. The possibility of greater profits

In economics, a shortage of a product occurs when

A. The product's price falls below its market-clearing price

Which of these factors describes a key advantage of not-for-profit corporations?

A. They are exempt from certain taxes

An economist would most likely argue that effective economic decision-making is based on

A. Weighin gthe costs and benefits of various options

Based on the information above, the principal amount from which Bill earns interest for the second year is

B. $1,000

The chart shows demand and supply curves for milk. According to the chart, the market-clearing price is

B. $1.50 per gallon

Which of the following would probably provide the greatest motivation for factory workers to increase their output?

B. Bonus pay based on the factory's production

Profit is one of the main incentives for nearly all

B. Businesses

Which of these statements about financial products is most likely true?

B. CD usually provide higher rates of return than ordinary savings

Owners of digital cameras have to buy memory cards in order to use the camera. Cameras and memory cards are

B. Complements

During one monthly, the price of a product rose 20%. This most likely occurred because of an increase in

B. Consumer demand

Based on the information above, Wheat Company A is most likely organized as a

B. Cooperative

In this situation described above, the group will most likely establish a [group of salespeople and engineers]

B. Corporation

Which type of business controls the majority of the financial assets in the US?

B. Corporations

During a six-month period, the price of a popular shoe rises from $28 to $39 a pair. During this same period, demand for this shoe will probably

B. Decrease

In July, an automobile company announces that next year's models, with more features, will start to arrive in September or October. What is likely to happen to demand for this year's model in August?

B. Demand will fall in anticipation of lower prices

If prices rise but income stays the same, what is the effect on the quantity demanded?

B. Fewer goods are bought

When an economic choice is made, an economist would most likely define the opportunity cost as the cost of

B. Forgoing the benefit of the next best alternative

The owners of GM Corp are probably most accurately described as people who

B. Hold shares of the company's stock

In a market economy, goods are most often produced as a result of

B. Interaction between buyers and sellers

Iron ore, timber, tuna, and crude oil are examples of

B. Natural resources

Which of the following kinds of purchases would probably be most affected by the overall interest rate environment?

B. New homes

Due to an increase in her rent, Isa needs to cut back her spending on other items. Which of the following types of goods will Isa consume less of?

B. Normal goods

People who create goods and services are most commonly called

B. Producers

Which of these statements best explains why the price of a particular toy might fall just before December 25?

B. Sellers produced a surplus of the toy

The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given time period

B. Supply

Which of the following will happen if the price of butter goes up?

B. The demand for margarine increases

Which of these si not an advantage of operating a business as a sole partnership?

B. Unlimited liability

The purchase of a new product in a market economy is an act of

B. Voluntary exchange

Based on the information above, the principal amount from which Bill earns interest for the second year is

C. $1,050

Based on the information above, the principal amount upon which Janice draws interest is

C. $1,400

Based on the information above, which of these represents the nominal interest earned on Gina's account?

C. $50

For the average consumer in the US economy, which of the following purchases is last likely to involve interest payments?

C. A bill for a cable television service

What causes a shift in the demand curve?

C. A change in an area other than price

The term opportunity cost is best described as something that...

C. A person gives up when a choice is made

In the scenario above, the higher interest rates offered to consumers most likely represent

C. A positive incentive for using longer-term CD accounts

The chart shows demand and supply curves for milk. According to the chart, there si a shortage of

C. About 4 million gallons per week at a price of $1.00 per gallon

Which of the following could be used in a system of voluntary exchange?

C. Baseball cards

All of the above are example of

C. Capital resources

Business A decides to increase production of cars by buying new robots for the assembly line. This would be considered an investment in

C. Capital resources

Which of these best describes the economic system practiced throughout most of the history of the United States?

C. Capitalism

Which of these financial products typically offers the greatest amount of liquidity?

C. Checking accounts

How does the substitution effect work when the price of an item drops?

C. Consumers buy the item as a substitute for other things

The common stockholders of a publicly owned corporation affect the management of the corporation by

C. Electing a board of directors by casting one vote for each share of stock they own

Both partnerships and corporations allow the owners to

C. Establish legal relationships

The substitution effect and the income effect describe

C. Factors that influence consumer buying choices

Based on the information above, the business that John bought is most likely a

C. Franchise

Managers, technical trainers, and accountants are examples of a company's...

C. Human resources

Which of the list above would generally be considered positive incentives for entrepreneurs?

C. I, II, and III

How can expectations about the future change consumer behavior?

C. Immediate demand for a good will rise if its price is expected to rise

Which of the following scenarios is the most likely events listed above? [Jeremy applies for a loan at a commercial bank/the bank determines that Jeremey has a slightly higher risk of defaulting on a loan than the bank's average borrower]

C. Jeremy may be required to pay a higher rate of interest on the loan

Which of these primary advantage of the corporation as a business form?

C. Limited financial liability for the owners

An organization formed for religious purposes would most likely be founded as a

C. Non-for-profit corporation

Entrepreneurs would most likely be involved in which of the following activities?

C. Organizing resources to create new businesses

A corporation's stockholders are probably best described as the company's

C. Owners

In a large corporation

C. Ownership and management are separated

To an economist, producers and consumers in a market economy are considered

C. Parties in a voluntary exchange

Compared to a pure market economy, one benefit of a command economy is that

C. People have more job security and are provided with more public services

Which of the following most accurately expresses the relationship between real and nominal interest rates?

C. Real interest rate= nominal interest - inflation over the prior year

One advantage that small companies often hav ever large corporations is the ability to

C. Respond quickly to changes in the market

Which of the following statements about scarcity is most likely true?

C. Scarcity affects governments as well as indiviual consumers

Which of these statements best explains why economics cannot provide all people with all the goods and services they desire?

C. Society lacks the resources needed to satisfy unlimited wants

Consumers are least likely to be defined as people that

C. Supply goods and services

The economic term scarcity is most often used to refer to

C. The condition of limited resources and unlimited wants

In a pure market economy, prices are generally determined by

C. The exchagnes between buyers and sellers

Which of the following statements about partnership is not true?

C. The owners have limited investment risk

When demand and supply for a product are equal, which of the following is most likely true?

C. The product's market clears [NOT ALL OF THE ABOVE]

Which of these is not one of three basic concepts all economic systems must address?

C. What prices government will charge for goods and services

The decision to convert a piece of farmland to city housing represents

D. A choice to allocate scarce resources to another use

Which of the following provides the best example of people using the barter system?

D. A grocery store owner trades a case of pineapples for two cases of oranges

If the conditions listed above were part of Country A's economy, which of these would be the most likely result? [the price of ice cream is regulated by the gov't/ the price of ice cream is kept far below its MC level]

D. All fo the above

Market clearing or equilibrium prices are important in a free enterprise economy because they

D. All of the above

Which statement explains why market economies are used extensively throughout the world?

D. All of the above

A corporation is a legal "person". This means the corporation

D. Can sue or be sued, enter into contracts, and must pay taxes

An economist would probably agree that demand and supply are primarily based on

D. Decisions made by consumers and producers in a market

Which is Ian example of the law of demand at work?

D. Demand for pizza rises when the price of pizza falls

One advantage of organizing a small business as an S corporation is that S corporations

D. Don't pay corporate income tax

The concept of economic scarcity refers mainly to decisions about

D. How resources are allocated

The market economy model of production and distribution is based on which of the above?

D. IV (all of the above)

John gets a raise and decides to start buying enriched pasta instead of cheaper instant noodles. For John, noodles are examples of

D. Inferior goods

Which of the following best describes how money's role as a store of value can help resolve the situation above?

D. John can save part of his wages over time and evenutally purchase a car

Which of the following best completes the statement above?

D. Marginal benefit

Which of these is the most common form of business in the US?

D. Proprietorships

Commercial banks typically help corporations in all of the following except

D. Purchasing a majority of the company's stock

The market equilibrium price is the price at which

D. The quantity demanded is the same as the quantity supplied

Which of the following statements is true of a pure market economy?

D. There is no central planning agency that determines prices

The ideas above most likely describe the aspects of a

D. Traditional economy

One key disadvantage of both part ships and proprietorships is that owners could, in theory, lose

D. all of the above

In economics, the concept of making a "trade-off" is most accurately described as...

D. giving up some of one thing to have more of some other thing

Which of these statements is true of an investor who buys a bond?

The investor has loaned money to a corporation or government

An economist would probably agree that to make effective financial decisions, consumers should

Weigh the cost and benefits of individual choices