Economics
How do Human Development Index (HDI) and gross domestic product (GDP) compare in what they measure?
HDI measures human development, while GDP measures economic development.
A car dealership analyzing whether it will loan money to William to buy a new car finds that his credit score is in the "very good" range. Which statement best describes the lender's viewpoint of William?
He is a low-risk borrower who qualifies for lower interest rates.
How do consumers' feelings about the economy help contribute to growth?
Positive consumer attitudes influence spending habits.
the analysis of facts or data to establish scientific generalizations about economic behavior
Positive economics
false assumption that because one event occurred before another event, it must have caused that event
Post hoc fallacy
How is a savings account most useful?
for using money in the near future but not right away
The pie graph shows sources of income for people ages 65 and over in 2010. According to this chart, among people 65 and over, investment income represents the
fourth largest source of income.
Which of the following will be accomplished by efficient allocations of the factors of production?
fulfilling many needs and wants of society
When someone is considering a career as a lawyer, future earnings are the
future benefit.
What type of labor force might a pottery factory want to focus on when hiring?
highly skilled
ceteris paribus
holding all other things constant
The circular flow model examines interactions between which two groups?
households and firms
What is the definition of liquidity?
how easily an investment can be exchanged for cash
This graph shows the US unemployment rate from August 2010 to November 2011. This graph could help an economist predict
how many people will be out of work in the next year.
Which describes a type of tax that people pay on money they earn?
income tax
how does a production possibility chart assist in outlining opportunity cost?
it compares proaction numbers of one product to another
tangible goods
items we value or desire that we can reach out and touch
The people of Baselandia have to make a decision. To operate their new machine at peak efficiency, they need to switch from using renewable resources to nonrenewable resources as the machine's energy source. However, using the nonrenewable resources will require them to permanently destroy their land. In this scenario, what is the nonrenewable resource an example of?
land
International trade organizations promote free trade by encouraging countries to
limit their protectionism policies.
Economies must answer the three economic questions because resources are
limited
More efficient positive market ethics will generally help improve all of the following challenges EXCEPT:
moral externalities of a market
A country with an absolute advantage can produce a good or service
more efficiently than another country.
Which type of loan most often involves long-term repayment over 30 years?
mortgage loans
In free market economics:
most market exchanges will result in all parties winning.
Which of these investments may be long term? Check all that apply.
mutual funds bonds retirement funds commodities
Trees, solar energy, and water are examples of:
renewable resources
One of the three main questions of economics addresses who should
receive goods and services.
economic goods
scarce goods created from scarce resources—goods that are desirable but limited in supply
Economic choices or tradeoffs are the result of
scarcity
Most resources are nonrenewable, and wants and needs are unlimited. This is an example of
scarcity
What forces businesses, industries, and governments to make decisions?
scarcity
What is the fundamental problem producers and consumers face?
scarcity
What issue results from the combination of limited resources and unlimited wants?
scarcity
Bankruptcy is considered a last resort because it stays on someone's record for
seven to ten years.
A federal payroll tax that supports retired workers is
social security tax.
The most common business organizations in the United States are
sole proprietorships.
In free-enterprise systems around the world, there are
some restrictions on business ownership and business activity.
is the act of limiting the types of goods and services produced.
specialization
Which are costs of a college education? Check all that apply.
tuition books and fees room and board student loan interest
Which of the following best defines rational behavior?
undertaking activities whenever the marginal benefit exceeds the marginal cost
When individuals are looking for jobs but are unable to find work, they are said to be
unemployed
When individuals are looking for jobs but are unable to find work, they are said to be .
unemployed
The development of many new businesses helps limit
unemployment
Businesses can take advantage of faster technology to make products faster.
value of the currencies for two or more countries.
On which of these are individuals required to pay income taxes in the United States? Check all that apply.
wages tips investment earnings
Because of scarcity
we must sacrifice valuable alternatives to obtain more goods and services we desire.
The questions of economics address which of the following? Check all that apply. who what where when why how
who what how
The questions of economics address?
who, what, and how
Failure to address the three questions of economics will have what kind of impact...
Correct: It will have negative consequences
Which of the following has the largest impact on opportunity cost?
Correct: Limited resources
Assessing opportunity cost involves
Correct: Making choices and dealing with consequences
Zahara Smith is wondering how she can make her check strength enough to afford...
Correct: Needs and wants
Fantastic Snack Company has spent months developing a new type...
Correct: Not meeting the wants of its consumers
What is a graphical representation of the combination of goods and services...
Correct: Production Possibility Curve
Rescooperate Ice Cream shop recently analyzed their books...
Correct: Profit
the study of how individuals and nations make choices about ways to use scarce resources to fulfill their needs and wants
Economics
The chart shows facts related to professional interpreters. The job outlook suggests that the translator field
will likely to continue to grow.
The chart shows that federal and state taxes are
withheld from employee pay.
Why is net income lower than gross income?
withholdings
laws ensure that workers are paid if they are injured on the job.
worker's compensation
What is the definition of liability?
a responsibility to pay for or fix a problem
A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all
"Invisible hand"
Which is the best option for someone who wants to improve his or her credit and pay less interest on the debt?
$100 a month because it will reduce the amount of debt owed
If Massachusetts has a sales tax of 6 percent and New Hampshire has no sales tax, how much money can be saved by buying a $1,000 television in New Hampshire?
$60
-
-
-A conclusion that can be drawn from both graphs by looking at 1983 is that interest rates
-
--
--
Banks make the most money and take the most risk with an interest rate of
18 percent.
Why is the automobile industry considered an oligopoly? It offers little differentiation within the market. It has significant barriers to entry. It is controlled by companies that patent key technology. It relies on price variation to attract customers. It depends on brand loyalty and image to generate sales. It is dominated by a few key players.
256
Which is the best example of outsourcing?
A US shoe company opens a factory in China and hires Chinese workers to make shoes.
How has Internet access changed and affected globalization from 2003 to 2013?
A thirty percent increase in Internet access has sped up globalization.
Which describes the difference between a trade surplus and a trade deficit?
A trade surplus is when a country exports more than it imports, while a trade deficit happens when imports exceed exports
the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group.
Absolute advantage
What is Ricardo's opportunity cost?
Correct: Choosing the promotion over time with his friends
Which of these statements demonstrate the economic concept of scarcity? Check all that apply.
All useful resources are limited in their supply. The wants and needs of people are unlimited. Resources are scarce, which explains why we are willing to pay for them. Because of scarcity, individuals must make choices.
The development of many new businesses helps limit unemployment. taxation. revenue. risk.
a
Why is gasoline weighted more heavily than tomatoes in a calculation of the annual inflation rate in the United States?
Americans spend more money on gasoline than tomatoes, on average.
The chart below shows a production possibility schedule for a pastry shop that makes $0.50 profit per donut and $0.75 profit per bagel.
B yields the largest profit
How are progressive taxes and regressive taxes similar?
Both are determined based on income.
Which scenario best reflects the relationship between production and demand in a recession?
Car dealerships cannot sell their stock.
The government controls all markets determining what to produce, how to produce, and for whom to produce
Command system
Why do prices increase when demand for a product is high?
Companies know that people will be willing to spend more to get an in-demand product
The ability of a country to produce a good at a lower cost than another country can.
Comparative advantage
Why is compound interest preferable to simple interest?
Compound interest pays interest on the principal and the interest earned in each period.
When Seb reconciles his accounts, what is the first step he should take?
Confirm his records are accurate and include all transactions.
Venya and Kari... How many plotted plants should they be able to produce on day 3?
Correct: 50
a phrase used in science and statistics to emphasize that a correlation between two variables does not necessarily imply that one causes the other.
Correlation vs causation
How has globalization made countries more interdependent? Check all that apply.
Countries now rely on one another for vital resources. Countries now rely on each other for new industries. Countries now rely on one another for chances to import. Countries rely on each other for cheaper products. Countries now rely on one another for chances to export.
How do quotas help domestic producers? Quotas facilitate increased exports of domestic goods. Quotas lower the cost of domestic goods. Quotas limit the number of producers that compete in a sector. Quotas facilitate the sale of more domestic goods.
DDDD
What is the simplest change that can be made to the budget to produce more savings next month?
Decrease food expenses.
Which statement best describes why it is difficult to sell a home during a recession?
Demand greatly decreases.
What are the signs of low inflation? Check all that apply.
Demand steadily rises. Prices continue to increase. The economy grows in a healthy way.
Direct, purchased, out-of-pocket costs, paid to resource suppliers outside the firm. Also referred to as accounting costs
Explicit costs
Why might variable expenses change a great deal at different times of year?
Heating and cooling costs might vary considerably.
Which scenarios can be considered effects of Sole Sister Shoe Store choosing to sell dress shoes over sneakers?
High school athletes stop shopping there. The inventory of sports socks goes unsold.
What led to Henry Ford's success as an entrepreneur?
His innovative production methods.
What is true of representative money? Check all that apply.
It can be exchanged for a valuable good. It was used in systems involving a "gold standard." It can be traded for a commodity such as silver.
How is using money related to bartering?
It is a substitute for bartering.
the individual, firm, region, or country with the lowest opportunity cost of producing a particular good should specialize in that good
Law of comparative advantage
If expansionary taxation policies encourage growth, are they always appropriate to implement?
No, government services could create inflation, which decreases the purchasing power of consumers.
The inflationary spiral explains the causes and effects of high inflation. The spiral usually begins with an increase in demand. What is the direct effect of this increase?
Producers raise prices to continue to make a profit.
the market in which households purchase the goods and services that firms produce
Product market
Land, labor, and capital also are known as factors of
Production
A graph that describes the maximum amount of one good that can be produced for every possible level of production of the other good.
Production possibilities curve
Which of the following best illustrates deciding how to produce a specific product?
Should we produce jeans with expensive machinery or less expensive labor?
The problem of having unlimited needs and wants and only a limited quantity of resources to satisfy these wants
The economic problem
What to produce? How to produce? For whom to produce?
The economic questions
What is one consequence of stagflation?
The economy drastically slows down as money loses its buying power.
The graph shows the federal budget from 1980 to 2010. What conclusion can be drawn from this graph?
The federal budget is usually unbalanced.
Which of the following is not an example of a resource?
The forest, the river, the tractor, and the chef are examples of resources. Resources=inputs used to produce goods and services
In what circumstance would a property insurance claim be rejected?
The insurance company finds that a homeowner intentionally caused damage.
Which statement best describes the circular flow model?
The model represents the movement of money and resources throughout the economy.
How would a manufacturer benefit by using fewer scarce resources?
The product would be less expensive to produce.
How do bank loans help the nation's economy?
They allow businesses to expand and improve.
An exchange of one thing in return for another; especially relinquishment of one benefit or advantage for another regarded as more desirable.
Trade-off
Decisions are based on customs and religious beliefs handed down from generation to generation
Traditional system
What is one problem that might commonly occur when one is bartering?
Two people have different ideas about the value of an item.
Which federal agency calculates the Consumer Price Index (CPI)?
US Bureau of Labor Statistics
Which of these is most likely the US government's aim in taxing imported goods? to protect domestic businesses to decrease international trade to end reliance on foreign goods to make US markets less desirable
a
The Free Trade Agreement Tariff Tool allows US businesses to
access tariff rates when planning to export.
When creating a budget, you must track both your budgeted expenses and your expenses.
actual
Which strategy best helps a famous brand company reach consumers?
advertising nationally
When creating a budget, log fixed expenses
after income.
What is the purpose of comparison shopping?
attempting to find the best deal on a product
"Everyone's rights should be protected" is an argument
for regulation.
The most economical way to purchase large items, such as furniture, is to buy with
cash
producers
one who makes a good or provides a service
Bryan receives an e-mail from a group posing as a police officers association and asking for bank account information. This is an example of
phishing.
Which type of incentive makes it more profitable to follow a certain course of action?
positive
Read the passage about Nelson's car insurance. What is the $75 payment Nelson must make each month?
premium
Which factors are considered when deciding how to make goods and services?
-methods traditionally used to make a good -ways to produce items at a lower cost or higher quality -ways to make the biggest profit
Which person is a victim of identity theft?
Thomas, whose credit card information was stolen and maxed out at a jewelry store
How would a manufacturer benefit by using fewer scarce resources? The product would be less expensive to produce. The product would better satisfy consumer needs. The product would be popular and readily available. The product would provide a more satisfactory profit.
a
What type of labor force might a pottery factory want to focus on when hiring? highly skilled highly wealthy highly educated highly localized
a
When economists determine that a nation's GDP has declined, they can point to this as a sign of economic shrinkage. economic growth. low unemployment. poor leadership.
a
When production is very high but demand is very low, it can lead to a recession. a recovery. prosperity. the peak.
a
Which best describes a central bank's primary goals? controlling inflation and reducing unemployment reducing unemployment and maintaining cash flow controlling stagflation and reducing unemployment managing credit and ensuring the money supply's liquidity
a
Which best describes the purpose served by economic models within an economic system? Models identify patterns. Models determine the business cycle. Models control change. Models define global demand.
a
The graph shows demand. In order to achieve equilibrium, what else must be included on the graph? disequilibrium supply curve excess supply excess demand
b
The point at which it is no longer advantageous to buy in bulk is known as marginal cost. tipping. benefit. error.
c
A(n) is a reward or punishment that encourages people to behave in certain ways.
incentive
Tariffs and subsidies are both types of
incentives.
Which of these are goals of an expansionary policy? Check all that apply.
increased available credit increased money supply decreased interest rates
What is collateral?
property given as security for a loan
Wind and solar energy are examples of
renewable resources
What kind of money is a gold certificate considered to be?
representative
Sales tax is calculated by multiplying the price of an item by the
tax rate
What must an entrepreneur assume when starting a business?
that clever market strategies may still fail to sell a product
Trent decides to spend an hour playing basketball rather than studying. His opportunity cost is:
the benefit to his grades from studying for an hour.
trade-off
the good or service that must be given up in order to buy another
natural resources
the things found in the world around us, such as water, land, and minerals that are used in the production of goods
Why were free trade zones created in China?
to attract investments by foreign countries
Which of these is the best reason for Nina to maintain up-to-date and accurate records of her bank accounts?
to know how much money she has for budgeting
It's important for countries to exchange currencies so that goods from other nations can be
traded
In the United States, which type of industry is often considered part of an oligopoly? electric companies cell phone carriers mail delivery services denim companies
b
How can a nation benefit from effectively exporting its goods? Its citizens can buy cheaper goods. Its businesses can invest in the future. Its domestic spending increases. Its citizens have more money.
c
Expansionary spending takes place when a government makes the decision to put a freeze on the number of its employees. raise taxes to balance its budget. raise taxes to run a budget surplus. raise spending to stimulate the econom
d
Fantastic Snack Company has spent months developing a new type of snack chip, but the chips are not selling. Which of the following is the most likely mistake Fantastic Snack Company made? conserving too valuable resources spending capital it did not have not researching production methods not meeting the wants of its consumers
d
Franchising is typically done by cooperatives. partnerships. sole proprietors. corporations.
d
How did NAFTA affect the economies of participating countries? by creating unrestricted trade benefits by raising employment rates and standards of living by creating a balance of exports and imports by increasing the overall volume of production
d
How do bonds generate income for investors? Bonds appreciate in value. Bonds pay interest. Bonds pay dividends. Bonds pay a specified amount at maturity.
d
How do corporations raise money and resources to expand? They request a bank loan. They save business profits. They cash in dividends. They agree to sell stocks.
d
How do short-term goals differ from long-term goals? Short-term goals involve less planning than long-term goals. Short-term goals are more affordable than long-term goals. Short-term goals cost more than long-term goals in the long run. Short-term goals are more immediate than long-term goals.
d
How does a high unemployment rate affect the economy? A high unemployment rate has no effect. A high unemployment rate has little effect. A high unemployment rate has a very positive effect. A high unemployment rate has a very negative effect.
d
If the value of the US dollar declines in relation to other currencies, goods imported into the United States will not be allowed to enter the country. become less expensive. remain the same in price. become more expensive.
d
Which of the following conditions is most indicative of recovery? The economy has stopped shrinking. The economy begins to peak. The economy has passed the trough. The economy is growing again.
d
Which of the following has the largest impact on opportunity cost? consumer wants tight deadlines consumer needs limited resources
d
This leads to _____ inflation.
demand-pull
Which consequences can victims of identity theft face? Check all that apply.
difficulty getting a loan or credit card an increase in debt a loss of money difficulty landing a new job
What consequences do borrowers face if they miss many payments? Check all that apply.
difficulty getting loans garnished wages lost collateral
Credit regulations require lenders to
disclose credit terms to borrowers.
A factory owner might decide to manufacture shirts in Pakistan instead of the United States because
it is less expensive to make shirts there
bads
items that we do not desire or want, where less is preferred to more, such as terrorism, smog, or poison oak
goods
items we value or desire
This graph shows the US unemployment rate from August 2010 to November 2011. This graph could help the US government
make an economic prediction.
assessing opportunity cost involves
making choices and dealing with consequences
Assessing opportunity cost involves
making choices and dealing with consequences.
Spending that is required by law is known as ____ spending.
mandatory
The Federal Reserve manages the nation's currency and money supply by
manipulating interest rates and acting as a lender to banks.
Most people prefer to pay health insurance premiums rather than pay out-of-pocket for medical expenses because
medical costs can be extremely high, and insurance is more affordable than paying out-of-pocket for a hospital stay.
Which is a kind of federal payroll tax?
medicare tax
It is important for victims of identity theft to contact the authorities
quickly to protect themselves from financial losses.
Which of the following lists the proper placement of terms, from left to right...
Correct: Profit, Revenue, Production Cost
On a production possibility curve, data points that fall outside of the curve represent
Correct: Unobtainable production
Which power source has been least developed?
Correct: Wind
how does a production possibility chart assist in outlining opportunity cost?
it compares production numbers of one product to another
Read the graph. Which power source has been least developed?
wind
Which body or group is most able to use money to influence the economy?
government
Which group creates regulations in mixed-market economies?
governments
society
group, community, or nation to which we belong
which of the following is an example of an economic service?
haircut
One fact about all currency is that it
has a changing value.
Capitalism, communism, free market
Economic system
(n.) a reason for doing something; something that stimulates action
Incentive
Which best describes what a subsidy does?
It keeps the price of domestic goods relatively low.
Which power source has been least developed?
Wind
opportunity cost occurs because of a producer's need to
allocate resources
In pure competition, producers compete exclusively on the basis of price. advertising. product features. image.
a
Which statements demonstrate the meaning of opportunity cost for producers and consumers? Check all that apply.
-If producers can only produce one item, they must decide which item to produce based on profit. -Consumers are limited by their resources, and must give up the chance to purchase one item in order to buy another. -When deciding to produce or purchase one item, another opportunity must be given up.
What could happen as a result of the effects of the opportunity cost on the left? Check all that apply.
-missing out on spending time with friends -gives up a chance to have fun
Why does the US government create regulatory agencies? Check all that apply. to create fair competition between producers to limit the knowledge of certain consumers to allow producers to have greater freedom to protect consumers' health and safety to prevent the formation of monopolies
1&4&5
Deflation
1. causes steadily falling prices 2. increases the value of money 3. usually occurs as demand falls
Inflation
1. causes steadily rising prices 2. reduces the value of money 3. reduces purchasing power
Raj wants to expand his bakery business to include bagels. In one hour of work, Raj can make 60 doughnuts or 30 bagels. Use the drop-down menu to complete the production possibility schedule.
1.) 30 2.) 120 3.) 90
Refer to the graph and use the drop-down menu to answer each question. At what point is Raj not using all of his resources? y At what point would Raj be using more than his available resources? X
1.)Y 2.)X
On April 3, 2013, one euro could be exchanged for about how many Japanese yen?
119
Which does the law of demand do? Check all that apply. allows producers to respond to consumers allows consumers to influence prices provides a demand schedule for a market allows consumers to choose low-priced goods provides consumers with additional income
12
Besides the cost of an education, what additional expenses must students pay? Check all that apply. housing meals supplies textbooks tuition
1234
In the circular flow model, factors of production flow to firms. Which of the following are the primary factors of production? Check all that apply. labor capital goods land services
124
The graph shows a supply curve. Which events could cause the change in supply shown on this graph? Check all that apply. A producer goes out of business. A natural disaster causes production to drop. A new company joins the marketplace. A company begins to produce more goods. A resource needed to produce more of the good has became scarce.
125
What role does the Federal Reserve play? Check all that apply. Regulate the banking industry Loan money to banks Give individual loans Give corporate loans Transfers any profits to the Treasury
125
Which are examples of programs or projects most likely funded by taxes paid by citizens of the United States? Check all that apply. constructing a highway collecting garbage developing a vacation resort building a shopping center maintaining state parks
125
Which factors can affect a stock's price? Check all that apply. market performance the company's financial health the quantity products produced location of the company the economy
125
How do central banks govern the banking industry? Check all that apply. by deciding how much banks must keep in reserve by overseeing the nation's payment system by supervising the loan process at banks by printing money for distribution to banks by responding quickly to banking crises that occur by auditing banks based on current regulations
1256
What is true of representative money? Check all that apply. It can be exchanged for a valuable good. It was once the most common form of money. It was used in systems involving a "gold standard." It can be traded for a commodity such as silver. It is made with precious metals or stones.
134
Which statements accurately describe a country's currency? Select all that apply. The currency is easily divisible. The currency can be used in any other country. The currency has a value that can change. The currency has denominations. The currency has a value that must stay the same.
134
Which statements apply to financing contracts? Check all that apply. requires a credit check less expensive than using a credit card includes interest rate information must be signed for rent-to-own agreements can be broken at any time
134
What are some ways to address unemployment in a market economy? CHECK ALL THAT APPLY. creating new projects increasing regulation lowering restrictions raising more taxes promoting hiring
135
Which indicators do economists use to determine the state of the economy? Check all that apply. prices immigration levels agricultural output employment levels gross domestic product (GDP)
145
Which of the following are considered needs? Check all that apply. food Internet cell phone residence television water
146
In what time period did hydroelectric power usage reach its peak?
1990-2000
How can producers maximize their profit? Check all that apply. They can work to increase their marginal cost. They can work to decrease their marginal cost. They can raise prices to increase marginal revenue. The can lower prices to decrease marginal revenue. They can keep marginal costs below marginal revenues. They can keep marginal revenues below marginal costs.
2&3&5
What are the pros of a mixed market economy for most citizens? CHECK ALL THAT APPLY. The government provides most basic necessities for citizens. There is a great deal of independence and personal choice. There may be less of a gap between rich and poor people. The government cannot dictate which jobs citizens hold. There may be greater opportunity to become wealthy. The economic system works to promote equality.
2&4&5
These are the four stages of the business cycle: 1. Depression 2. Prosperity 3. Recession 4. Recovery In which order do these stages occur?
2, 3, 1, 4
The graph shows the federal budget from 1980 to 2010. In which period did the federal budget show the greatest deficit?
2000 to 2010
How are Bill Gates and Henry Ford similar? Check all that apply. They both streamlined factory production. They both became wealthy and successful. They both helped better the lifestyles of others. They both developed products that filled a human need or needs. They both founded a company when they were very young.
234
What are the benefits of instant communication and sales for consumers? Check all that apply. Companies can ship goods to customers in an instant. Businesses can be available for customers 24 hours a day. Customers can purchase goods and services online. Customers can give feedback to producers instantly. Employers can hire workers from all over the world.
234
Which challenges faced by an economy are examined in macroeconomics? Check all that apply. declining innovation inflation unemployment bankruptcy decreased output
235
Which statements accurately describe debts and deficits? Check all that apply. Debt is free and does not affect a government. A government's budget deficit causes debt to increase. A government's budget deficit causes debt to decrease. Debt requires a government to pay back more than it has borrowed. The deficit is the amount a government spends above what it brings in.
245
What are aspects of a free-enterprise system? Check all that apply. Private ownership of property is severely restricted. The government has a lot of power and influence. There are few limits on the use of private property. Consumers make all of their economic choices. Producers make all of their economic choices.
3&4&5
Rabia declined a job offer because she feels her skills merit better pay and a better position. Which terms can be used to describe Rabia? Check all that apply. cyclically unemployed domestically unemployed frictionally unemployed structurally unemployed still employed unemployed
3.6
What are some benefits to private ownership? Check all that apply. Private ownership provides offices for government workers. Private ownership provides land or goods for all citizens to use. Private ownership can make it possible for a business to earn money. Private ownership might help a person move to another economic class. Private ownership allows a person to own goods that may increase in value.
345
Which statements correctly explain price floors and price ceilings? Check all that apply. Ineffective price floors tend to be too high. Ineffective price ceilings tend to be too low. Price floors help producers by raising prices. Price ceilings help consumers by lowering prices. Effective price floors are set above equilibrium. Effective price ceilings are set below equilibrium.
3456
Jim lost his job in a car assembly factory to a robot and his skills will no longer be needed. Which terms can be used to describe Jim? Check all that apply. cyclically unemployed domestically unemployed frictionally unemployed structurally unemployed still employed unemployed
4.6
Based on the diagram, which example describes how a bank injects money into the economy?
A bank approves a mortgage for a customer.
What is the relationship between risk and return?
A higher risk often means a higher return.
A large, new diamond mine has just opened, and the price of diamonds has gone down. Since she has studied economics, Cecilia decides to buy a diamond necklace since she knows that
NOT the cost of diamonds depends only on the demand.
which of the following illustrates an opportunity cost?
Amir only has time to study or to play basketball
Which of the following illustrates an opportunity cost?Amir only has time to study or to play basketball.
Amir only has time to study or to play basketball.
Which is an example of how a denomination is divisible?
An American dollar is equal to four quarters.
How is an excise tax different from a sales tax?
An excise tax applies to specific products.
Which scenario is an example of cost-push inflation?
An increase in workers' wages raises the production cost of cars, and car prices rise as a result.
What do these graphs indicate about the relationship between employment levels and prices during economic cycles?
As unemployment rates rise, average prices fall.
Which activity is done in Step 2 of comparison shopping?
Assess the purchase objectively.
Which statements best explain how globalization offers an advantage to businesses? Check all that apply.
Businesses can take advantage of favorable laws to make products cheaply. Businesses can take advantage of favorable taxes to make products cheaply. Businesses can take advantage of new forms of technology to make products cheaply. Businesses can take advantage of faster technology to make products faster.
What does the table show about the relationship between different measures of development?
GNI per capita better reflects standard of living than GDP.
Why is GNI per capital a better measure of standard of living than GDP?
GNI per capita indicates how much each person makes on average.
PS+CS, gain in welfare for consumers and producers from market trades, maximized when Q=Q*
Gains in trade
Which best describes why gender equality is an important factor influencing development?
Gender equality means that everyone can contribute to development.
Which statement best describes how globalization connects the world?
Globalization helps create new forms of transportation, communication, and technology.
Which region is most likely to export bananas to the United States?
Central America
This is a table that could be used to maintain a record of account transactions. It is similar to what is found in a checkbook ledger. Some of its column headings are missing. How should these columns be labeled?
Check Number, Description, Balance
Which of these is an advantage unique to checking accounts?
Checking accounts allow used checks to act as receipts.
Which best describes the effect of globalization on China's economy?
China is shifting toward specialization in industry and services and away from agriculture.
A model that shows the flow of goods and services and the interaction among households, businesses, and banks
Circular flow model
having to give up the same amount of one good to get additional units of another
Constant opportunity costs
Which situation best reflects the concept of free enterprise?
Consumers have a choice between two bakeries in a single city block.
How can the use of new technology in industry benefit consumers?
Consumers have greater access to information.
Which statement best describes the impact of scarcity?
Consumers must pay higher prices for many items.
Which statement best describes why a government's actions are important in macroeconomics? Check all that apply.
Government is both a consumer and a producer. Government can use policy to influence the economy.
Which statements best describe how governments respond to changes in the business cycle? Check all that apply.
Governments manipulate interest rates.
Alex is at the hardware store comparing different types of piping for a repair in his home kitchen. He can choose between copper piping or plastic piping. He knows that copper piping is stronger but more expensive. He also knows that plastic piping will work for the job that he is doing, and it is less expensive Based on the information presented in this scenario, what can you determine about the copper piping?
Copper is a scarce resource, which increases its value.
Which of the following uses a nonrenewable energy source?
Correct: A power plant
Which object is most likely to have the most value based on the concept of scarcity
Correct: A silver necklace
Opportunity cost occurs because of a producer's need to
Correct: Allocate resources
Choice _____ represents the lowest opportunity cost
Correct: B
If a specific economy has extra capital resources available, it will
Correct: Be able to produce both needed and wanted products
Which of the following best illustrates the importance of addressing the three questions of economics?
Correct: Businesses need to use limited resources wisely
A large, new diamond mine has just opened, and the price of diamonds has gone down...
Correct: Diamonds are a nonrenewable resource
Which of the following will be accomplished by assessing the factors of production?
Correct: Guaranteeing the fulfillment of needs and wants
Producers can create any combination of goods they wish, as long as they
Correct: Properly allocate resources
One of the main questions of economics addresses who should
Correct: Receive goods and services
Wind and Solar energy are examples of
Correct: Renewable resources
A __________ can be defined as whatever people use to create services and goods
Correct: Resource
A company makes $200,000 in a year and has $150,000 in production costs...
Correct: Revenue
Which most likely occurs because resources are nonrenewable and because...
Correct: Scarcity
School band members need to raise money for new uniforms. Some members want...
Correct: The value of the resources
One of the three economic questions deals with deciding
Correct: What goods and services should be produced
Which consideration must be addressed when deciding for whom to produce?
Correct: Who has the greatest need?
The questions of economics address which of the following? Check all that apply.
Correct: Who, What, How
One of the main questions of economics involves deciding upon the method for
Correct: creating goods and services
What part does interest play in deficit spending?
Governments must pay interest on money they borrow when they take on debt.
______ per capita measures the average annual income per person per year.
Gross National Income
Which can be considered disadvantages of sole proprietorships and partnerships?
Sole proprietorships require one person to do many things, while partnerships require many people to weigh in on decisions.
US federal income tax is progressive by law, but which best explains why wealthy individuals can often pay far less in taxes than the top tax rate?
High-income earners use tax laws to their advantage to reduce their tax rates.
The consuming units in an economy
Households
Why are many children in Niger unable to receive an education? Check all that apply.
Some children work to support their families. There is insufficient free public education. Few laws exist that force children to go to school.
Which statements apply to a certificate of deposit (CD)? Check all that apply.
It can be purchased from a banking institution. It can be purchased for almost any amount.
How does government instability affect other development factors?
It can undermine other factors.
Which of the following statements about opportunity cost are true? CHECK ALL THAT APPLY.
It exists because resources are scarce. It influences consumers. It influences producers.
Which best describes why infrastructure is important for a country?
It helps society meet basic needs.
The outcome factor; the variable that may change in response to manipulations of the independent variable.
Dependent variable
A relationship in which one variable increases with an increase in another variable.
Direct relationship
Which statement best describes how the Fed responds to recessions?
It increases the money supply.
What is the best definition of economic data?
Economic data is information used for calculation, analysis, or planning.
steady growth in the productive capacity of the economy (and so a growth of national income)
Economic growth
consider opportunity cost, maximizing, making choices on the margin to make more or less (doing more or less of an activity)
Economic way of thinking
Which statements correctly identify limitations of the factors of production? Check all that apply.
Economies must consider their limitations when answering the three questions of economics. Capital includes all money and physical facilities needed to create a product. Labor is a factor driven by the size of the population, education, and standard of living.
The three questions of economics are based on decisions made by economies. What statement best describes why economies must make these decisions?
Economies must make these decisions because resources are limited.
resources that businesses use to produce their products related to the factors of production: land, labor, capital, and entrepreneurship
Factor market
The erroneous belief that what is true for a part is necessarily true for the whole.
Fallacy of composition
What can the reader reasonably conclude from information in the graph?
Fewer new businesses were started in 2010 than in other years.
institutions that organize the production of goods and services
Firms
This diagram shows a government's approach to taxing and spending. Which of the following would be a good title for this diagram?
Fiscal Policy
What is most likely the reason variable expenses should be planned after fixed expenses?
Fixed expenses are required and constant, but variable expenses are more flexible.
Which of the following best illustrates the fallacy of composition?
If Ms. Spann had more money, she could buy more scarce goods; if the nation had more money, everyone could buy more scarce goods.
The image shows Gale's investments during one year. Investments during One Year What does the information demonstrate about Gale's investments?
If she had purchased only the stock and had not diversified her investments, she would have lost money.
The graph shows the federal debt between 1993 and 2013. What trend about the federal debt does the graph reveal?
It is increasing.
What does the table indicate about the development of Barbados?
It is not economically developed but has a relatively high standard of living.
Indirect, non-purchased, or opportunity costs of resources provided by the entrepreneur
Implicit costs
In regard to trade, the United States
Imports and exports of goods and services
Which explains a difference between income and taxable income?
Income is what a person earns, while taxable income reflects what is left after paying federal taxes.
Which of the following is an example of a capital resource?
Incorrect: Coal
A society decides that it needs to produce more corn to feed the growing population...
Incorrect: Determine...
How does a production possibility chart assist in outlining opportunity cost?
Incorrect: It compares profit
Which of the factors of production will the company need to address most closely when...
Incorrect: Labor and Capital Incorrect: Land and Labor
The fact that Samira may miss out on a scholarship opportunity by staying on...
Incorrect: Opportunity cost
Which point indicates an inefficient allocation of resources?
Incorrect: X
The experimental factor that is manipulated; the variable whose effect is being studied.
Independent variable
How do indicators relate to standard of living?
Indicators comprise the measure of standard of living.
The North American Free Trade Agreement created a free trade zone between Canada, the United States, and
Mexico
What is the difference between inflation and deflation?
Inflation can result from rising demand and reduces the value of money. Deflation can result from falling demand and boosts the value of money.
Which best explains why banks consider interest on loans to be important?
Interest helps them cover business costs.
What are the effects of rapid inflation? Check all that apply.
Interest rates increase. Uncertainty increases. Real income declines.
Economic interactions involving which of the following would most likely be studied in macroeconomics?
International Monetary Fund policy.
A relationship in which one variable decreases when another variable increases.
Inverse relationship
Which of the following is a characteristic of the prosperity phase of the business cycle?
high levels of production
What are the advantages of following a strict repayment schedule? Check all that apply.
It prevents additional fees from being charged. It prevents some interest rate increases. It shows that the borrower is responsible.
The United States is said to have an absolute advantage in producing food compared with Japan. What does that mean?
It produces food more efficiently than Japan.
Which statement best describes an education at a vocational school?
It usually takes two years to complete and tends to focus on technical training.
Failure to address the three questions of economics will have what kind of impact on an economy?
It will have negative consequences.
What effect would a tax increase have on income?
It would not affect gross income.
These lists outline the details of two jobs. Which statement correctly compares the two jobs?
Job B offers more days off and employee benefits.
The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
Microeconomics
As production increase so does opportunity cost
Law of increasing opportunity costs
the study of economy-wide phenomena, including inflation, unemployment, and economic growth
Macroeconomics
Decision making which involves a comparison of marginal (extra) benefits and marginal costs.
Marginal analysis
the additional benefit to a consumer from consuming one more unit of a good or service
Marginal benefit
the increase in total cost that arises from an extra unit of production
Marginal cost
Private individuals and firms control all resources and the price and quantity of all goods are determined by the interaction of suppply and demand
Market system
In the 1870s, began to investigate factory conditions.
Massachusetts
-
Mexico
Which of the following statements most accurately describes the federal government and its employees?
Millions of Americans work for the federal government.
An economic system that includes both private ownership of property and government control (or regulation) of some services and industries
Mixed system
Which best describes the purpose served by economic models within an economic system?
Models identify patterns.
What advantages does money have over bartered goods? Check all that apply.
Money has a set value, and bartered goods do not. Money is more portable than bartered goods.Money allows people to easily store value they earn.
Which best describes the relationship between education and life expectancy?
More education can help increase life expectancy
The most economical way to purchase large items, such as furniture, is to buy with .
NOT credit cards
The part of economics involving value judgments about what the economy should be like; focused on which economic goals and policies should be implemented; policy economics.
Normative economics
Which country has the highest standard of living?
Norway
Cost of the next best alternative use of money, time, or resources when one choice is made rather than another
Opportunity cost
the most favorable way to divide scare resources among different uses
Optimal allocation of resources
the assumption, when focusing on the relation among key economic variables, that other variables remain unchanged
Other-things-constant assumption
Which of the following is an example of market failure?
Overuse of highways that leads to traffic congestion Reduced levels of vaccinations which increase illness and disease Substantial foreclosures caused by sub-prime lending
What is an example of a country that makes use of another nation's currency?
Panama
What would happen if currency in all countries had fewer denominations?
People could not charge as many different prices for goods.
What might happen if an economy is unable to produce wanted goods and services?
People will look elsewhere for them.
Theories are applied to fix problems or meet economic goals
Policy economics
Which of the following is true?
Poverty can be eliminated but scarcity can not
In microeconomics, what occurs when equilibrium is reached?
Prices are set.
How do quotas help domestic producers?
Quotas facilitate the sale of more domestic goods.
A _______ can be defined as whatever people use to create services and goods.
Resource
The graph compares the cost of living in three different cities. Which statement best explains this graph?
San Francisco has the highest cost of living of the three cities.
Which is the best way to achieve long-term financial goals?
Save more money from net income.
What is one benefit of purchasing saving bonds?
Saving bonds are purchased from the government and guaranteed to increase in value.
A situation in which unlimited wants exceed the limited resources available to fulfill those wants
Scarcity
From an economists' perspective, which of the following observations is not true?
Self-interest is purely monetary in nature. *also emotional and personal satisfaction
Bella has a credit score of 720. Based on the graph, which description most likely explains her score?
She pays her bills on time and has a lower amount of debt.
The slope of a straight line is the ratio of the vertical change (the rise or drop) to the horizontal change (the run) between any two points of the line.
Slope of a straight line
Which best describes the difference between sole proprietorships and partnerships?
Sole proprietors keep all profits and have unlimited liability, while partners split profits and share liabilities.
Which of the following is a statement of positive economics?
Tax rates ought to be reduced so that people will work more
the relationship between a country's export prices and its import prices
Terms of trade
Which of the following is not an example of the use of the problem solving perspective provided by economics?
The Fogelberg family takes its vacation at Lake Arrowhead this year simply because they have done so for as long as anyone can remember.
In 1776, an economics book titled was published to promote the concept of free enterprise.
The Wealth of Nations
Stagflation occurs when high inflation combines with
high unemployment and a low level of production.
What must happen in order for an insurance company to make a payout? Check all that apply.
The insurance company must verify the claim. The insured party must file a claim. The insurance policy must be in place. The insured party must experience a covered loss.
The benefits a worker receives from an employer typically include
medical and dental coverage.
Which of the following best describes the circular flow model?
The model represents the movement of money throughout the economy.
Why are imports, which bring goods into a country, considered a leakage factor?
The money paid to producers of imports leaves the country.
What does the diagram show about tax revenue?
The most revenue comes from individual and payroll taxes.
Which best describes how a recession develops as demand and production decrease?
The recession feeds on itself.
Which best describes what a central bank uses monetary policy to do?
steer the economy away from recession and toward growth
How can an insurance company make a profit by taking in premiums and making payouts?
The value of the premiums the company takes in is higher than the value of the payouts it makes.
Suppose there are two members of the U.S. Congress who were once economics professors. Why is it important to be able to distinguish their positive from their normative statements about economic policy?
Their positive statements help us understand the economy's response to a particular policy, while their normative statements reflect their value judgments.
Which statements apply to leasing a car? Check all that apply.
There are mileage restrictions on the car. You must return the car after the lease ends. There are penalties for ending the lease early.
Which statement best describes how lenders determine borrowing conditions for a customer?
They access the customer's credit reports.
Which statement best explains scholarships that cover the costs of an education?
They are often based on achievement.
What happens to earnings in a cooperative?
They are shared with member owners.
Based on the lesson, how are individuals and economies similar?
They both must decide how to allocate resources.
What do quotas and embargoes have in common?
They both set limits on imported goods.
Which best describes the effect negative incentives have on a certain course of action?
They make the action less profitable.
Why might people choose to rent a home rather than buy a home?
They may be relocated for a job.
Which best explains how contractionary policies can hamper economic growth?
They reduce disposable income.
The first map shows colonial powers and their holdings (1945). The second map shows human development worldwide. Compare the two maps. What do the maps indicate about regions that gained independence in the second half of the twentieth century?
They remain less developed than their colonial powers.
How do corporations raise money and resources to expand? Check all that apply
They request a bank loan. They agree to sell stocks. They issue bonds.
Which best describes why taxes and savings are considered leakage factors?
They take money out of the economic system.
"As a rational person, you would expect individuals to always avoid actions that are illegal."
This is a false statement because it is expected that individuals will consider the consequences of their actions and that some will choose to commit illegal acts anyway.
The circular flow model examines interactions between which two groups? households and firms households and consumers firms and producers firms and government
a
What according to an economist, forms the basis of rational human behavior under current and anticipated future circumstances?
Values and information
The point at which a line meets the vertical axis of a graph
Vertical intercept
Which of the following does not specify positive ethical rules?
Webster's Dictionary
Which questions about risk should someone ask before making a big purchase? Check all that apply.
What problems are most likely to happen? What could go wrong? What problems could be most damaging?
Which statement most accurately describes the trends shown on this graph?
When GDP falls, unemployment rises.
Which types of investments are securities? both debt and equity debt only equity only neither debt nor equity
a
Which questions should someone ask when deciding whether to lease or buy a car? Check all that apply.
Will I use it more than the allowed lease mileage? How long do I want the car? How much do I want to spend?
How can the use of new technology in industry benefit workers?
Workers can gain new knowledge and skills.
In monopolistic competition, what effect do price variations generally have on the market as a whole? no effect little effect great effect indeterminable effect
a
A goal of financial regulatory agencies is to prevent monopolies. enforce workplace safety. protect the environment. enforce food safety.
a
A mixed-market economy is best defined as an economy with some government intervention. without government intervention. with some externalities. without corporate compliance.
a
A producer with a comparative advantage has the ability to produce a good or service at a lower opportunity cost than any competitor can. a faster rate than any competitor can. a greater volume than any competitor can. a lower cost than any competitor can.
a
A society decides that it needs to produce more corn to feed the growing population. What must it do before it begins the production process? analyze existing resources, such as water availability determine how people will receive the surplus crops study the profitability of increasing corn production understand who is in a position of authority to produce more
a
An entrepreneur is someone who starts and runs a business. is an employee of a business. invents products for other businesses. works for multiple developing businesses.
a
An entrepreneur who opens a franchise must assume debts. keep profits. offer training. select sites.
a
An example of complementary goods would be computers and printers. cars and trucks. sheets and towels. food and clothing.
a
At an educational institution, the cost of room and board includes housing and meals. health and dental care. textbooks and supplies. tuition and class fees.
a
Banks pay interest to customers through a savings account. credit card account. mortgage account. 401k account.
a
Based on the lesson, how are individuals and economies similar? They both must decide how to allocate resources. They both must carefully categorize available resources. They both must recognize the issues with nonrenewable resources. They both must choose whether to use more renewable resources.
a
Both newspaper journalists and postal workers have been negatively affected by the popularity of electronic communication and the Internet. declining literacy rates and lack of interest in reading. government budget cuts that led to fewer jobs in these fields. competition with cheaper labor performed by overseas workers.
a
Consumers create demand for goods and services. sales and low prices. goods and income. services and low prices.
a
Cooperatives save members money by purchasing supplies and services as a group. securing financing from banks as a group. charging more to sell their products as a group. sharing all profits democratically as a group.
a
During a recession, what is one way governments try to encourage growth? by increasing unemployment benefits by stopping government spending by requiring firms to maintain production by eliminating all tax breaks
a
For a piece of legislation to proceed to the Senate, it needs a certain number of votes. Whose job is it to organize the votes of the party? the whip the floor leader the caucus the committee
a
How does the government of a republic typically shape its economy? The government allows citizens to own private businesses. The government blocks the ownership of personal property. The government owns all homes and other forms of housing. The government controls factories and other forms of production.
a
How is a student loan different from a scholarship? A student loan must be paid back, but a scholarship is not paid back. A scholarship must be paid back, but a student loan is not paid back. A student loan is a form of financial aid, but a scholarship is not. A scholarship is a form of financial aid, but a student loan is not.
a
If expansionary taxation policies encourage growth, are they always appropriate to implement? No, government services could be reduced and cause serious problems for individuals and businesses. Yes, the private sector can easily and affordably replace all services and facilities cut by the government. No, the government is capable of providing many but not all services individuals and businesses need. Yes, the government will still ensure that individuals and businesses continue to receive all necessary services.
a
In a free enterprise system, governments address public problems through policy to ensure that citizens' needs are met and protected. economic operations of businesses are controlled. workers earn more than workers in other countries. the nation's level of productivity remains steady.
a
In a free-enterprise system, producers decide how much to charge. which services to buy. where to shop for goods. which goods interest them.
a
In microeconomics, price helps determine both supply and demand. Which other factors also help determine each? Supply is determined by production costs, and demand is determined by need for the product. Supply is determined by production costs, and demand is determined by producer behavior. Supply is determined by consumer behavior, and demand is determined by aggregate demand. Supply is determined by producer behavior, and demand is determined by need for the product.
a
Which is an example of a high-risk investment?
stock in a start-up company
In which situation would government regulation most likely be necessary? A factory requires employees to work in unsafe conditions. A restaurant requires employees to work overtime on weekends. A computer company requires employees to work long hours. A power plant requires employees to take safety training classes.
a
Look at this monthly budget. Monthly Budget Next month, Tokuji's monthly net income will increase to $650. If he increases his savings to $110 a month, how much can he increase his discretionary spending? $20 $10 $40 $30
a
Natural monopolies occur when one producer can meet the market's entire demand. controls the method of production. is the only one authorized to produce a given product. creates unique products.
a
On a graph, an equilibrium point is where a supply curve and a demand curve meet. a supply curve is higher than a demand curve. the supply and demand curves head up. the supply and demand curves head down.
a
One consequence of using automation to improve production is fewer jobs are available. production can slow down. costs often rise for producers. prices often rise for consumers.
a
Paying for transportation to and from work is an example of a mandatory expense. a variable expense. a short-term expense. a discretionary expense.
a
People might choose to use a debit card rather than cash for purchases because they do not want to carry around large amounts of cash. their banking institutions charge high fees for cash withdrawals. most items cost less when purchased with a debit card. debit cards have a higher value than cash and can buy more.
a
Planning to finance higher education helps people prepare for their financial future because it teaches them about funds management and loans. their educational options. the real world. investing in their future.
a
Profit equals the total amount of money made minus expenses. prices. revenue. supply.
a
Public policy can be best defined as a course of action the government takes in response to an issue or problem. a decision made by all registered voters to change a government program. the annual review of a government's plans to spend taxpayers' money. a forum where citizens can debate the merits of a government proposal.
a
Read the graph. What can the reader reasonably conclude from information in the graph? Fewer new businesses were started in 2010 than in other years. The opening of new businesses peaked between 2007 and 2008. More new businesses were started in 2006 than in 2005. The number of new businesses remained constant between 2006 and 2009.
a
Read the scenario. Samira is a freshman basketball player who hopes to go to college on a basketball scholarship. She is offered the chance to play on her school's varsity basketball team, which plays in tournaments during holiday breaks. Samira usually spends her breaks working at the local hardware store. After careful consideration, Samira decides to stay on the freshman basketball team and keep working over breaks. The fact that Samira may miss out on a scholarship opportunity by staying on the freshman team illustrates a cause. opportunity cost. an effect. unexpected risk.
a
Read this news report about a planned devaluation of the bolivar, the currency of Venezuela. The president of Venezuela announced that the country would be devaluating the bolivar for the fifth time in nine years. The official rate is falling from 4.3 bolivars to the dollar, to 6.3, a 32% devaluation. By increasing the bolivar value of exports of oil to the US and other nations, the government hopes to alleviate a budget crisis caused by its increasing reliance on borrowing to meet spending obligations. In response to the announcement, the people of Venezuela lined up today to buy televisions, electronics, and airline tickets in order to protect themselves from projected price increases. Venezuelans started buying items immediately because of their fear of rising inflation. price deflation. declining inflation. increased imports.
a
Regulatory policy requires a balance between protecting safety and protecting constitutional rights. improving corporate profits. improving environmental conditions. protecting states' rights.
a
Rescooperate Ice Cream Shop recently analyzed their books. They found that in the past year, they made $100,000 selling ice cream and spent $75,000 on supplies and factory space. The remaining $25,000 represents profit. loss. revenue. expense.
a
Revenue bills can be proposed only by the House. the Senate. the Speaker. the President.
a
South Avenue Publishing produces self-help books. The company's profit is the money the company earns after paying all of its production costs. paper, binding, and other supplies the company purchases. total amount the company receives from the sale of its books. amount of money the company earns from selling a single book.
a
Stagflation occurs when high inflation combines with high unemployment and a low level of production. low unemployment and a high level of production. a drop in buying power and a rise in workers' wages. a rise in buying power and a drop in workers' wages.
a
Supply and demand coordinate to determine prices by working together. competitively. with other factors. separately.
a
The Federal Reserve manages the nation's currency and money supply by setting interest rates and acting as a lender to banks. overseeing bank collections and payments on loans. dictating criteria and setting loan terms for banks. offering investment advice and adjusting interest rates.
a
The chart below shows an exchange rate table. If you lived in Great Britain and wanted to buy one euro, how much would it cost? less than a pound more than a pound exactly one pound about eight pounds
a
The chart shows a cost-benefit analysis. Which most likely explains why the costs and benefits shown by the EPA are higher than the other regulatory agencies? The EPA legislates and enforces more regulations that reap greater benefits than the other agencies. The EPA legislates and enforces food regulations that reap greater benefits than the other agencies. The EPA has a larger budget than the other agencies, and its employees work longer hours. The EPA is less efficient than the other agencies, and its employees spend more money.
a
The graph below shows the value of the US dollar versus the Canadian dollar. For the time period shown, the value of the US dollar was generally rising against the Canadian dollar. falling against the Canadian dollar. more than twice that of the Canadian dollar. about half that of the Canadian dollar.
a
The graph shows a demand curve. Which most likely accounts for the changes shown on the demand curve? More consumers want a product. Fewer consumers want a product. The price of a product rises a little. The price of a product rises sharply.
a
The graph shows data for the years 2010 through 2012. Which might be a better title for this graph? Total Exports for the United States and China Trade Between China and the United States Unemployment in the United States and China The History of International Trade
a
The graph shows excess demand. Which explains why the price indicated by p2 on the graph is lower than the equilibrium price? As prices fall, demand goes up. As prices fall, demand goes down. As prices fall, demand stays the same. As prices fall, demand disappears.
a
The graph shows labor union membership. During what years did union membership peak? in 1945 and 1955 in 1960 and 1970 in 1930 and 1950 in 1965 and 1970
a
The inflationary spiral explains the causes and effects of high inflation. The spiral usually begins with a rise in production costs. What is the direct effect? Producers raise prices to continue to make a profit. The government prints more money and lowers its value. Workers negotiate with employers to receive more money. Consumers need higher wages to keep up with rising prices.
a
The law of demand applies most directly to which group? buyers sellers producers lawmakers
a
The main advantage that corporations have is limiting liability for owners and stockholders. giving many owners a say in business decisions. being inexpensive and easy to establish. requiring fewer state and federal regulations.
a
The main role of banks in the nation's economy is to store, lend, and invest money. store, lend, and borrow money. store, lend, and distribute money. store, lend, and approve money.
a
The point of maximum profit is the point at which the marginal cost equals the marginal revenue. market price. total revenue. production cost.
a
There are five stages in a recession. 1. job loss 2. falling production 3. falling demand (occurs twice) 4. peak production In which order do these stages occur? 4, 3, 2, 1, 3 3, 2, 1, 3, 4 4, 3, 2, 3, 1 4, 2, 3, 1, 3
a
There would be no separation between one country's economy and another's if the entire world shared the same currency. chose paper currency over coins. eliminated denominations for currency. agreed to use only two types of currency.
a
This graph shows a supply curve. What happens when the price of a good increases? The quantity of goods that are produced increases. The producer of the good is certain to make less money. The quantity of goods that are produced decreases. The quantity of goods that are produced stays about the same.
a
This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in the long run? Output remains constant. Output increases. Output cannot be predicted. Output decreases.
a
This table shows the production possibility schedule for several toothpaste companies. Toothpaste company Large tubes Small tubes 1 Sparkling 100 per hour 200 per hour 2 Bright White 100 per hour 250 per hour 3 Fresh! 200 per hour 250 per hour 4 Mmmint 150 per hour 150 per hour Use the numbers to place the companies in order of greatest comparative advantage to least comparative advantage in producing small tubes of toothpaste. 2, 1, 3, 4 1, 2, 3, 4 4, 3, 1, 2 2, 1, 4, 3
a
Trade agreements are helpful because they allow countries to trade for necessary goods. increase trade tax revenue. influence foreign trade. help create new trade barriers.
a
What happens when a bank is required to hold more money in reserve? It has less money for loans. It has less money for operations. It has less money for interest payments. It has less money for withdrawals.
a
What happens when the quantity of goods is higher than demand? excess supply stable prices exact equilibrium increased production
a
What is a main reason why entrepreneurs experience daily stress? They have considerable responsibility. They need to spend time training employees. They need to have sufficient income to pay loans. They have to contribute both to the market and society.
a
What is one argument against the wealth gap? Economic growth will likely decline over time. The upper classes cannot help create new jobs. The wealthy become unable to make investments. Buying power exceeds the supply from producers.
a
What is the best definition of ownership? Ownership is the right to possess land or goods. Ownership is the right to possess land alone. Ownership is the right to purchase land or goods. Ownership is the right to purchase goods alone.
a
What is the difference between profit and revenue? Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs. Revenue is the total amount producers earn after subtracting the production costs. Profit is the total amount producers receive after selling a good. Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers earn after subtracting the production costs. Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers receive after selling a good.
a
Which workers are most likely to be in demand in the future? those with high-tech skills those with construction skills those in government jobs those in manufacturing jobs
a
What makes enforcing safety standards a challenge for the Food and Drug Administration? Many foods are imported from other countries, and the FDA must ensure those foods meet the same standards as US goods. The FDA faces competition from the EPA, which sets standards for product labeling. The FDA has no control over advertising laws, which may conflict with safety standard laws. Many raw materials are exported to other countries, and the FDA must ensure those materials meet the same standards as international goods.
a
What part does interest play in deficit spending? Governments must pay interest on money they borrow when they take on debt. Citizens must pay interest when their governments borrow money. Governments may charge foreign countries interest when they borrow money. Interest is not a factor when a government's budget is in deficit.
a
What restriction would the government impose in a closed economy? The government would prohibit trade with other nations. The government would set the prices for imported goods. The government would preserve traditional customs only. The government would prevent private ownership of property.
a
Which best describes how producers benefit from specialization? Producers can increase their profits. Producers can expand their market. Producers can offer a wider range of goods. Producers can increase sales.
a
Which best describes how standards help domestic producers? Standards require goods to meet basic requirements. Standards provide financial support for producers. Standards restrict the import of cheap goods. Standards offer incentives to ensure high quality.
a
Which best describes the economic impact of defaulting on bank loans? The economy suffers because banks have less money to loan to others. The economy suffers because people have less money to spend. The economy suffers because businesses are scared to take out loans. The economy suffers because people are scared to take out loans.
a
Which best describes the effects of low and high interest rates on the economy? Low interest rates encourage consumers to borrow and spend, while high interest rates discourage such behavior. High interest rates discourage consumers from investing, while low interest rates encourage investment. High interest rates encourage consumers to borrow and spend, while low interest rates discourage such behavior. Low interest rates encourage consumers to invest, while high interest rates discourage investment.
a
Which best describes the nature of cause and effect in the context of the business cycle? Each effect has other effects. Causes and effects cannot be easily defined. A cause has multiple independent effects. Each effect has a cause.
a
Which best describes what financial planning skills ultimately enable an individual to do? to prepare for the future to determine lifetime income to determine the cost of living to learn from the past
a
Which body or group is most able to use money to influence the economy? government consumers firms producers
a
Which describes the process of how a business incorporates? The business must gain government permission and issue a stock sale, followed by a shareholder vote. The business must issue a stock sale and take a shareholder vote, followed by government permission. The business must take a shareholder vote and gain government permission, followed by a stock sale. The business must gain government permission, followed by writing a charter and issuing a stock sale.
a
Which group does the Fed serve? financial institutions consumers government bodies bankers
a
Which helps enable an oligopoly to form within a market? Firms cooperate to reduce competition. The government restricts market entry. The number of options in a market confuses consumers. No competition exists between producers.
a
Which is an example of a product that is considered a need? breakfast food music player sports equipment video game
a
Which is an example of regulation in the automobile industry? the creation of fuel-efficiency standards for cars the installation of satellite radio systems in some cars the usage of multiple-year warranties to cover repairs the production of hybrid models that conserve gasoline
a
Which is the most liquid form of money? cash and currency in circulation investment accounts savings accounts demand accounts
a
Which most likely results from producers engaging in specialization? Producers reduce their costs. Producers increase their market share. Producers decrease the materials needed for production. Producers always offer more competitive pricing.
a
Which nation has a socialist command economy? Cuba North Korea South Korea the United States
a
Which of the following best describes the circular flow model? The model represents the movement of money throughout the economy. The model represents the interactions within sectors. The model represents the flow of goods and services between sectors. The model represents the changing relationships between actors.
a
Which of the following best illustrates deciding how to produce a specific product? Should we make a bunch of cheaper jeans or one really exclusive pair? Can we market our jeans to teenagers or focus on people in their twenties? Do we have enough customer support to charge more for our jeans? Are jeans still "in," or should we develop a line of skirts instead?
a
Which of the following is an example of a land resource? cow factory employee tractor
a
Which quality best describes a producer with an absolute advantage? efficient fast accurate prolific
a
Which scenario is an example of demand-pull inflation? Consumers have more money to buy cars, and the prices of cars and car parts rise as a result. An increase in workers' wages raises the production cost of cars, and car prices rise as a result. The demand for cars falls as consumers have less disposable income, and car prices fall as a result. A government bailout helps car manufacturers lower their costs, and car prices fall as a result.
a
Which term refers to the possibility of an investor losing some or all of an investment? risk likelihood probability chance
a
Why are utilities, such as electricity and water, examples of natural monopolies? The cost of production restricts competition in the market. There are limited natural resources to meet demand. Consumers only trust known companies to provide these essentials. There is no need for alternative options.
a
Why does the Fed pay interest to banks? It is interest on money held in reserve. It is interest on credit available to the Fed. It is interest on loans taken by the Fed. It is interest on government investments.
a
Why is competition limited in an oligopoly? Barriers prevent new producers from entering the market. Producers completely refuse to engage in price wars. No major distinctions exist between producers. Producers actively segment the market to avoid competition.
a
which is the best example of someone deciding how to use a factor of production?
a baker deciding which bread recipe to use
Which of the following is an example of a labor resource?
a city's population
Effective free market ethical systems must provide for all of the following EXCEPT:
a clearly defined moral foundation.
Glenn and Maggie own a regional chain of juice bars and are looking to expand in the coming year. They already have fifty shops, but they know they will need a loan to reach their goal of one hundred twenty five shops. Which type of banking institution is most suitable for Glenn and Maggie's business?
a commercial bank
Every economic decision has
a consequence or tradeoff.
Which is the best example of a country that is dependent on other countries?
a country that has little fertile soil
on a production possibility curve, data points that fall outside of the curve represent
a currently unattainable production
On a production possibility curve, data points that fall outside of the curve represent
a currently unattainable production.
a theory can be defined as
a deliberate simplification of factual relationships that attempts to explain and predict how those relationships work.
an example of a capital resource is:
a dump truck (it is a piece of equipment)
Which is the best definition of inflation?
a gradual increase in the price of goods and services
What kind of economy uses a free-enterprise system?
a market economy
Sofia has saved $10,000. She wants to be sure that she is earning interest on her money and can add to her savings. She also wants to be able to access her money if the need should arise. Which type of account is most suitable for Sofia's needs?
a money market account
A currency is a system of money created and used by
a nation or region of the world.
which of the following is an example of a consumer?
a person buying a pair of jeans
Which situation best illustrates the concept of scarcity?
a person buying a used car due to limited income
consumers
a person who buys or uses goods or services
Which object is likely to have the most value based on the concept of scarcity?
a silver necklace
theory
a statement or proposition used to explain and predict behavior in the real world
Typically, high inflation is a sign of
a struggling economy because wages cannot keep up with the increase in prices.
Which of the following is an example of a an individual motivated by self interest:
a student volunteering at a soup kitchen an attorney providing free legal service to low income families a young person volunteering for the Peace Corps a man buying a new Camaro
normative statement
a subjective, contestable statement that attempts to describe what should be done
Which best describes a regressive tax?
a tax that charges high-income earners a lower percentage than low-income earners
a hypothesis is
a testable proposition
hypotheis
a testable proposition
Samira is a freshman basketball player who hopes to go to college on a basketball scholarship. She is offered the chance to play on her school's varsity basketball team, which plays in tournaments during holiday breaks. Samira usually spends her breaks working at the local hardware store. After careful consideration, Samira decides to stay on the freshman basketball team and keep working over breaks. The fact that Samira may miss out on a scholarship opportunity by staying on the freshman team illustrates
a tradeoff.
Paying for transportation to and from work is an example of
a variable expense.
Which scenarios can be considered effects of Sole Sister Shoe Store choosing to sell dress shoes over sneakers? CHECK ALL THAT APPLY. High school athletes stop shopping there. The inventory of sports socks goes unsold. Publicity for the store declines. Profits decline because dress shoes cost less than sneakers.
a&b
the main idea of this chapter is that
all people, businesses, and governments must make choices
When a government creates a budget, it is seeking a way to
allocate money to programs and projects.
Opportunity cost occurs because of a producer's need to
allocate resources.
The government of country A has determined there is a coal shortage based on mining reports. As a result of these data, the government decreases coal exports to other nations. Access to information helped country A
allocate resources.
Based on economic theory, if a person wants to purchase a large stereo system, what must necessarily occur?
allocation of resources
The importance of the ceteris paribus assumption is that it:
allows one to analyze the relationship between two variables apart from the influence of other variables.
An entrepreneur conducted many experiments in a project without success. What characteristic must this person have to succeed?
an ability to learn from mistakes
What kind of advantage does a country have if it can make a product more inexpensively?
an absolute advantage
simple circulation flow model
an illustration of the continuous flow of goods, services, inputs, and payments between firms and households
positive statement
an objective, testable statement that describes what happens and why it happens
A society decides that it needs to produce more corn to feed the growing population. What must it do before it begins the production process?
analyze existing resources, such as water availability
Which job-related factor do both lists show?
annual wages
A disadvantage of forming a partnership is that owners
are fully responsible for their partners' losses.
Pollution damages the environment we live in. An economist would advise that we reduce air pollution:
as long as the marginal benefit from air pollution reduction outweighs the marginal cost of achieving the reduction.
If people are self-interested,
as their preferences for leisure time increase, they are likely to work less. as the wages they are offered increase, they are likely to work more.
Which types of credit are most similar to each other?
auto loan and mortgage loan
"Meeting the spending targets in this budget meant some very difficult choices." President Barack Obama, 2012 Budget Message of the President Read the passage. What did the president mean when he said he had to face "very difficult choices" when creating a federal budget? deciding which country to borrow from to finance spending deciding what would be funded and what would be cut deciding how to keep interest rates low on the national debt deciding how much to increase tax rates
b
A factor that most influences changes in consumer demand is quantity. price. quality. competition.
b
A large, new diamond mine has just opened, and the price of diamonds has gone down. Because she has studied economics, Cecilia decides to buy a diamond necklace since she knows that diamonds are in great demand. diamonds are a nonrenewable resource. the cost of diamonds depends only on the demand. the purchase of diamonds will satisfy wants and needs.
b
A mixed market economy tends to exist under a communist government that provides little regulation. democratic government that provides some regulation. representative government that provides no regulation. socialist government that provides a lot of regulation.
b
A monthly fixed rate mortgage payment could change. never changes. increases annually. decreases annually.
b
A wealth gap is an economic difference between nations. classes. businesses. governments.
b
According to the business cycle, what characteristic indicates that a depression has been reached? The economy reaches recovery. A trough has occurred. The peak has passed. A period of property has ended.
b
Among the changes that labor reformers wanted after the Industrial Revolution was more jobs for untrained workers. a ban on child factory workers. jobs for women factory workers. equal pay for owners and workers.
b
An entrepreneur who needs money to create and distribute a new invention would most likely visit a community banker. an investment banker. a commercial banker. an executive banker.
b
Bank deposits help the nation's economy by providing protection for consumers from theft. giving banks the money to loan and invest. providing protection for banks on investments. giving consumers the ability to save money.
b
Both excess supply and excess demand are a result of equilibrium. disequilibrium. overproduction. elasticity
b
Consumers having more money to purchase computers will most likely result in a decrease in prices for computers and computer parts. an increase in prices for computers and computer parts. a decrease in prices for computers, but not computer parts. an increase in prices for computers, but not computer parts.
b
Cost-push inflation occurs when consumers show an interest in purchasing more goods. producers need more money to make and distribute goods. the government prints more money and pushes prices up. consumers have more money to spend on goods and services.
b
Demonstrating opportunity cost is done through production analysis. possibility. calculation. research.
b
Economic interdependence means that economic policies must balance the needs of all governments in the world. governments, individuals, and businesses. small businesses and large corporations. both wealthy and poor individuals.
b
Entrepreneurs who want to open a franchise buys the rights from the parent company and creates his or her own rules. buy the rights from the parent company and invest in a location approved by the parent company. invest in a location and create a business model for the franchise. invest in a location and develop a trademark for the franchise.
b
Henry Ford was a successful entrepreneur because he gained great wealth from his company. helped workers achieve better conditions. designed a useful mode of transportation. built his own factory to produce a product.
b
How can the Senate limit the power of the House? by not sending bills to the House by not approving the House's bills by being the upper chamber by having six-year terms
b
How do long-term goals differ from short-term goals? Long-term goals require more money than short-term goals do. Long-term goals require more patience than short-term goals do. Long-term goals are less attainable than short-term goals are. Long-term goals involve more planning than short-term goals do.
b
How is an excise tax different from a sales tax? An excise tax is not deductible. An excise tax applies to specific products. An excise tax applies only to imported goods. An excise tax is an indirect tax.
b
How long is a representative's term of office? one year two years four years six years
b
If union contracts raise wages above competitive levels, what might be one negative outcome? Industries will raise salaries for top-level workers but not entry-level workers. Companies will move overseas to escape unions and hire cheaper labor. Inexperienced workers will lose their jobs to more experienced workers. Employees will be content with their status and thus less likely to join unions.
b
In a command economy, a cotton farm floods after a heavy storm. The repair work most likely will be paid by the private business that operates the farm. the government group that runs the farm. the individual who manages the farm. the family who owns the farm.
b
In an oligopolistic market, consumer choice is nonexistent. limited. extensive. infinite.
b
In the lesson, you learned about Dave and his bakery. It was mentioned that "in one hour of work, Dave can make either 60 donuts or 30 bagels." Which might help Dave assess whether he should focus on bagels or donuts? It costs less to make bagels. Customers prefer donuts. Dave charges more for bagels. Donuts cost more to produce.
b
Look at the equation framework. Which of the following lists the proper placement of terms, from left to right, to complete the equation? revenue, profit, production cost profit, revenue, production cost production cost, profit, revenue production cost, revenue, profit
b
One fact about all currency is that it loses value over time. has a changing value. maintains a stable value. grows increasingly valuable.
b
One of the main questions of economics involves deciding upon the method for distributing goods and services. creating goods and services. pricing goods and services. enhancing goods and services.
b
Opportunity cost means that something needs to be replenished. given up. ignored. paid for.
b
Personal finances encompass an individual's potential earnings. assets. debt. investment risks.
b
Read the following scenario. A clothing company wants to expand into new regions. It is looking at an urban area with a large number of vacant warehouses. The population is made up of people with average educations and a lower standard of living. The company is experiencing slower sales but has hopes that product will take off and be successful. Which of the factors of production will the company need to address most closely when making its decision to expand? land capital land and labor labor and capital
b
Read the graph. What can the reader conclude from the graph? A company selling telephones most likely has only a 40 percent chance of surviving for at least four years. A company offering physical therapy most likely has only an 80 percent chance of surviving for at least two years. A company offering cleaning services most likely has only a 50 percent chance of surviving for at least seven years. A company selling diabetes supplies has only a 60 percent chance of surviving for at least three years.
b
Short-term financial goals might include spending less on gas. buying movie tickets. purchasing a new car. saving up for vacation.
b
Tasty Treat Tea is a popular iced tea drink. When the manufacturer begins to use imported tea leaves, the price rises and consumer demand for the drink falls. This suggests that Tasty Treat Tea is an elastic good because it is more of a need than a want. Tasty Treat Tea is an elastic good because it is more of a want than a need. Tasty Treat Tea is an inelastic good because it is more of a need than a want. Tasty Treat Tea is an inelastic good because it is more of a want than a need.
b
Technology can help governments handle economic emergencies, such as the reliance on automation. crop and resource shortages. the fall of the unemployment rate. instant sales and communication.
b
The Federal Reserve Bank of the United States is also known as the people's bank. central bank. world bank. retail bank.
b
The Food and Drug Administration sets standards for advertising. product labeling. the environment. traffic safety.
b
The aggregate is a type of economic system. the total number of goods demanded or supplied. a form of revenue. the total profit made on sales.
b
The best time for Americans to import French cheese is when they can exchange a combination of goods and US dollars for euros. buy the most euros for US dollars. buy the most US dollars for euros. exchange US dollars for pesos and then for euros.
b
The chart below shows a production possibility schedule for a pastry shop that makes $0.50 profit per donut and $0.75 profit per bagel. Choice presents the lowest opportunity cost.
b
The chart below shows an exchange rate table. Which statement accurately interprets the information on the chart? Japan's currency shows that it has the strongest economy of any country. The value of each currency is shown in relation to the US dollar. It would take six British pounds to purchase one US dollar. Swiss francs are the strongest currency in Europe.
b
The chart shows the marginal cost and marginal revenue of producing apple pies. What most likely will happen if the pie maker bakes a seventh pie? The marginal cost will most likely decrease to $1.00 The marginal cost will most likely increase to $2.00 The marginal revenue will most likely remain the same, not decrease to $8.00. The marginal revenue will most likely remain the same, not increase to $12.00.
b
The circle graph shows information about Germany's labor force in 2011. Which statement most accurately describes Germany's labor force? Most Germans are farmers. Most Germans work in services. Most Germans work in factories. Most Germans fish for a living.
b
The graph shows a point of equilibrium. What does "Q" represent on the graph? the point where equilibrium is achieved the quantity at the equilibrium point the average cost of goods sold the point where supply and demand drop
b
The graph shows excess supply. Which explains why the price indicated by p2 on the graph is higher than the equilibrium price? As prices rise, demand goes up. As prices rise, demand goes down. As prices rise, demand stays the same. As prices rise, demand disappears.
b
The graph shows excess supply. Which needs to happen to the price indicated by p2 on the graph in order to achieve equilibrium? It needs to be increased. It needs to be decreased. It needs to reach the price ceiling. It needs to remain unchanged.
b
The graph shows the number of employed workers in the United States in nonfarm jobs from 2008 to 2013. The best conclusion that can be drawn from the graph is that the number of nonfarm jobs remained consistent over time. started going down in 2008. went up every year since 2008. started going down in 2010.
b
When compared to a mixed-market economy, a command economy typically has more private ownership. a much smaller wealth gap. strong consumer buying power. a greater chance for a high income
b
The graph shows the price of a good compared to the quantity supplied. This graph demonstrates how the amount produced slightly changes with the price. the amount produced greatly changes with the price. the amount consumed slightly changes with the price. the amount consumed greatly changes with the price.
b
The market for which item generally involves pure competition? cola corn jeans ice cream
b
The most common business organizations in the United States are partnerships. sole proprietorships. corporations. franchises.
b
These circle graphs show information about Bolivia's workforce and GDP. What do the graphs indicate about Bolivia's labor force? Few people in Bolivia work in services. Many people in Bolivia work in agriculture. Most people in Bolivia work in industry. Few people in Bolivia work in agriculture.
b
These lists provide information about two jobs. Which statement best compares the two jobs? Job A has a lower salary than job B, but the benefits make job A a more attractive pay package. Job B has a lower salary than job A, but the benefits make job B a more attractive pay package. Job A has a higher salary than job B plus benefits that make job A a more attractive pay package. Job B has a higher salary than job A plus benefits that make job B a more attractive pay package.
b
This chart shows the actual pricing history for three items. For which product(s) would it be most beneficial to wait before buying? game system smartphone DVD and smartphone smartphone and game system
b
This graph shows changes in GDP and the unemployment rate in the United States in recent years. In what year would someone looking for work have had the hardest time finding a job? 2008 2009 2011 2012
b
This graph shows student loan debt in the United States from 1994 to 2009. What trend does the graph demonstrate? Student loan debt will most likely decrease in the coming years. Students have taken out higher and higher loans since 1994. Enrollment for higher education will soon begin to decrease. Tuition for higher education has risen steadily since 1994.
b
This graph shows the US unemployment rate from August 2010 to November 2011. This graph suggests unemployment in the United States will continue to fall. will continue to rise. will remain the same. will only change a little.
b
What happens to earnings in a cooperative? They are used to pay middlemen for services. They are shared with member owners. They are used to buy more stock for members. They are shared with customers through dividends.
b
What is the best definition of marginal cost? the possible income from producing an additional item the price of producing one additional unit of a good the additional income gained from selling an additional good the financial gain from business activity minus expenses
b
What is the best definition of technology? Technology is replacing human workers with mechanical or electronic devices. Technology is applying scientific knowledge to find answers and fix problems. Technology is using fewer resources to manufacture goods more efficiently. Technology is hiring workers from all over the world to manufacture goods.
b
What is the difference between marginal cost and marginal revenue? Marginal cost is the money earned from selling one more unit of a good. Marginal revenue is the money paid for producing one more unit of a good. Marginal cost is the money paid for producing one more unit of a good. Marginal revenue is the money earned from selling one more unit of a good. Marginal cost is the money a producer might make from one more unit. Marginal revenue is the money a producer actually makes from one more unit. Marginal cost is the money a producer actually makes from one more unit. Marginal revenue is the money a producer might make from one more unit.
b
What is the hierarchy in the structure of the House? The members are at the top, and the floor leaders are at the bottom. The Speaker is at the top, and the members are at the bottom. The Speaker is at the top, and the whips are at the bottom. The floor leaders are at the top, and the members are at the bottom.
b
What is the proper order for how a bill passes through the House? submission, debate, hearing, vote submission, hearing, debate, vote hearing, submission, debate, vote hearing, debate, submission, vote
b
What is the purpose of comparison shopping? ensuring you are not buying out of emotion attempting to find the best deal on a product determining whether you truly need a product reading reviews to make sure a product is good
b
What is the purpose of the US International Trade Association? to help countries establish free trade to help businesses create viable exports to limit levels of investment in trade opportunities to limit trade opportunities for competing companies
b
What might cause a change in the value of fiat money? a change in the value of commodities a change in government regulations a change in materials used to make money a change in individuals' spending habits
b
What might happen if an economy is unable to produce wanted goods and services? People will go without them. People will look elsewhere for them. People will stop wanting them. People will focus on needs instead.
b
What must an entrepreneur do after creating a business plan? open the business finance the business file the right paperwork identify an opportunity
b
What power does the House hold in regard to impeachment? It forms a committee to hear complaints against an official. It brings charges against an official to remove him or her from office. It holds a trial to present evidence against an official on the charges of impeachment. It decides whether the official is guilty and should be removed from office.
b
What was the status of US workplace safety laws in 1900? A few states had tried to pass safety laws, but they had no public support. Most states had passed some safety laws, but enforcement varied. Most states opposed safety laws, but workers began to demand them. All states had safety laws, but no one bothered to enforce them.
b
To change gross income, someone would need to save more per month. reduce deductions. earn more money. increase withholdings.
c
When discussing comparative and absolute advantage, which best describes specialization? developing expertise in certain types of production limiting the types of goods and services produced targeting specific consumers and retailers producing certain items for specific market segments
b
When government intervention makes currency worthless, this condition is called deflation. hyperinflation. cost-push inflation. demand-pull inflation.
b
When prices for homes rise, why might construction companies decide to build more homes? to increase employment to make a profit to create a need for more resources to boost name recognition
b
Which activity is done in Step 2 of comparison shopping? Research a product. Assess the purchase objectively. Compare prices and features. Buy a product.
b
Which best describes ASEAN? an international organization promoting free trade a regional organization promoting growth in Southeast Asia an international organization trying to establish a common currency a regional organization establishing free trade between Canada and Mexico
b
Which best describes an investor's primary goal? to grow a business to earn a profit to bolster the economy to provide capital to a business
b
Which best describes how an investor makes money from an equity investment? by earning interest by selling the asset for a profit by raising capital by growing the asset
b
Which best describes how an investor makes money off debt? by selling the debt by earning interest by raising capital by being repaid for the principal
b
Which best describes the availability of substitutes in a monopoly? Price points vary. There are no substitutes. There are different brands. Products have different features.
b
Which best describes the difference between preferred and common stocks? Preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights. Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights. Preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends. Common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends.
b
Which best describes the standards required of foreign producers? Foreign producers have more stringent standards than domestic producers. Foreign producers must meet the same standards as domestic producers. Foreign producers must meet specific standards based on their origin. Foreign producers do not use standards that harm consumers.
b
Which best describes what generally occurs in financial markets? Debt and loans are traded. Assets are traded. Commodities are traded. Shares are traded.
b
Which best explains why a sole proprietor would want a partner? to reduce the number of responsibilities to make it easier to raise funds for expansion to move into a more favorable tax bracket. to take advantage of little government oversight.
b
Which describes a way in which consumers most likely benefit from producers' absolute advantage? Consumers' opportunity costs decrease. Prices decrease as a result of increased production efficiencies. Producers always use savings to improve products. Consumers can find a given product in more places.
b
Which event best describes why it is difficult to sell a home during a recession? Reduced income prevents buying. Demand greatly decreases. Mortgages become unavailable. Housing prices increase.
b
Which federal agency calculates the Consumer Price Index (CPI)? US Census Bureau US Bureau of Labor Statistics US Department of Commerce US Department of the Treasury
b
Which is an effect of stagflation? Trade with other economies increases. The value of a country's currency drops. Prices for goods fall sharply and suddenly. The GDP rises along with production levels.
b
Which is an example of how a denomination is divisible? An American dollar may equal one-half of one Euro. An American dollar is equal to four quarters. Three American dollars may buy a small snack. Five American dollars may be worth less next year.
b
Which is the best definition of inflation? a gradual reduction in the price of goods and services a gradual expansion in the price of goods and services an exponential reduction in the price of goods and services an exponential expansion in the price of goods and services
b
Which object is likely to have the most value based on the concept of scarcity? a flowering plant a silver necklace a new coffee table a crop of oranges
b
Which of the following is a characteristic of the prosperity phase of the business cycle? stagnant prices high levels of production ambivalence about the economy reduced incomes
b
Which of the following uses a nonrenewable energy source? a wind mill a power plant a fruit orchard a swimming pool
b
Which of these is an exclusive power of the House of Representatives? to amend a bill to impeach a government official to check the power of the president to review a tax bill the Senate has proposed
b
Which of these is the best example of an asset? the electricity in a home the shirt someone is wearing the coffee someone drank this morning an old, used airline ticket
b
Which power source has been least developed? wood wind biofuel hydroelectric
b
Which scenario is an example of cost-push inflation? Consumers have more money to buy cars, and the prices of cars and car parts rise as a result. An increase in workers' wages raises the production cost of cars, and car prices rise as a result. The demand for cars falls as consumers have less disposable income, and car prices fall as a result. A government bailout helps car manufacturers lower their costs, and car prices fall as a result.
b
Which scenario is the best example of an opportunity cost? A computer company issues a recall on its tablets. A computer company produces fewer laptops to meet tablet demand. A computer company reduces the price on last year's models. A computer company stops making computers with CD/DVD drives.
b
Which statement best describes how the Fed's use of open market operations affects banks? It affects banks' interest rates It affects banks' liquidity. It affects banks' lending practices. It affects banks' stability.
b
Which unemployment rate do most economists consider to be acceptable? 0 percent 5 percent 10 percent 20 percent
b
Who decides which currency each country in the world uses? the United Nations each individual country the European Union the United States
b
Why do countries most often create trade agreements? to limit imports to reduce tariffs to establish quotas to decrease competition
b
Why might a country choose to devalue its currency? to please its trading partners to encourage exports to encourage imports to reduce taxes
b
Why might people choose to rent a home rather than buy a home? They have a lot of money saved for a down payment. They may be relocated for a job. The interest rates on equity are too high. The maintenance costs are more reasonable for renters.
b
Why were free trade zones created in China? to avoid governmental rules and conditions to attract investments by foreign countries to import technology more easily to control imports and exports
b
Missing one payment may cause borrowers to
be charged a late fee.
A company manufacturing shirts for a department store decides to create a new style of cotton shirt. The company would most likely produce shirts that will
be less costly to create.
Why does the US import oil?
because it does not produce enough oil
If the value of the US dollar declines in relation to other currencies, goods imported into the United States will
become more expensive.
Opportunity cost includes:
both monetary and non-monetary costs.
The opportunity cost of going to college includes:
both tuition and the value of the student's time.
The safest way for someone to make an online purchase is to
buy from a reputable website.
The best time for Americans to import French cheese is when they can
buy the most euros for US dollars
Read the scenario. Brad has a steady job, earns a solid income, and plans to live in a nearby city for the long term. He is looking to purchase both a car and a place to live, and he is very interested in building up equity and credit. Which of the following illustrates the most economically sound choice for Brad?
buying both a car and a home
What types of investments do banks use to make a profit? Check all that apply.
buying stocks and bonds buying several properties buying the rights to loans
What is one way for an entrepreneur to decrease risk?
by creating a strong business strategy
How do trade agreements of international organizations affect trade?
by encouraging countries to balance imports and exports
How do government regulators protect consumers?
by ensuring lenders comply with the law
What is one way that economics can influence your daily life?
by helping you understand that every choice has a tradeoff
During a recession, what is one way governments try to encourage growth?
by increasing unemployment benefits
minimum wage
by law the lowest wage an employer may pay a worker
How have airplanes changed the way the world does business? Check all that apply.
by making long trips less expensive by making long trips in less time by opening up new trade markets by increasing travel options
How can a student pay for an education as part of a work-study program?
by taking a school job as part of a financial aid plan
A plan for spending money that balances income with spending and shows how money will be spent is a surplus. an expenditure. a budget. a deficit.
c
A supply schedule shows how prices affect the quality of a good. overall economy of a country. quantity of a good supplied by a producer. unemployment rate.
c
According to the article by Brooks, successful entrepreneurs are most interested in job security. financial gain. personal fulfillment. a flexible working environment.
c
An entrepreneur would most likely be a low risk taker. trained manager. person who works well alone. person who has a brief work week.
c
An exchange rate table makes it easy to compare the different currency denominations used by a single country. cost to produce the currency used by a single country. value of the currencies for two or more countries. unemployment rates for two or more countries.
c
An increase in gross domestic product (GDP) is a sign that a country's economy is declining. stagnant. growing. depressed.
c
From what part of income should someone take savings? what otherwise would be fixed expenses gross income, before other deductions what otherwise would be discretionary income gross income, along with other deductions
c
When the prices of raw materials or labor increase, this causes an increase in ________ resulting in ______ for consumers.
the cost of production higher prices
How can the government reduce the wealth gap in a mixed market economy? The government can control income levels by placing limits on how much citizens can earn. The government can set wages for workers in certain industries to affect economic differences. The government can improve education to provide new opportunities for workers in the lower class. The government can tax members of the wealthy class at a lower rate to address differences in income.
c
How can the use of new technology in industry benefit workers? Workers can react to economic change quickly. Workers can identify economic emergencies. Workers can gain new knowledge and skills. Workers can make economic forecasts.
c
How do bank loans help the nation's economy? They ensure consumer spending and confidence. They ensure the success of new businesses. They allow businesses to expand and improve. They allow consumers to quickly pay off debts.
c
How does the Speaker exert power over a committee? by preventing a committee from meeting by rejecting the findings of the committee by appointing the chair and a majority of the members by appointing the whip as a voting member of the committee
c
How many members are there in the House of Representatives? 100 200 435 535
c
If a sales tax is the same for all goods sold within a given area, why are sales taxes considered regressive? High-income earners avoid paying sales tax through deductions. Sales taxes tend to be higher in areas with large low-income populations. Sales tax disproportionately affects low-income earners. Low-income earners make purchase decisions based exclusively on sales tax.
c
In American society, which of these is an example of a want? food shoes television rent
c
In a free-enterprise system, consumers decide how to set prices. which goods to export. which services to buy. how to use materials.
c
In microeconomics, what occurs when equilibrium is reached? Prices decline. Prices increase. Prices are set. Prices fluctuate
c
In order to calculate marginal cost, producers must compare the difference in the cost of producing one unit to the cost of purchasing a unit. distributing that unit. producing the next unit. producing a different unit.
c
In the market, actions known as incentives affect producers only. consumers only. consumers or producers. neither consumers nor producers.
c
In what time period did hydroelectric power usage reach its peak? 1970-1980 1980-1990 1990-2000 2000-2010
c
It's important for countries to exchange currencies so that goods from other nations can be manufactured. destroyed. traded. regulated.
c
Ivan works for an automobile factory that exports cars around the world. The government manages the factory, and he lives in housing provided by the city. Ivan most likely lives in a closed economy with limited government regulation. a pure market economy with no government regulation. a command economy with heavy government regulation. a mixed market economy with some government regulation.
c
Mr. and Mrs. Atoll are planning a party for 10 people and want to make sure they have enough soda for everyone to have two bottles. Which of the following makes the most economic sense? 20 bottles of soda at $1.50 each 4 six-packs of soda at $5.00 each one case of 24 sodas at $18.50 two cases of 24 sodas at $18.50 each
c
One argument in favor of labor unions is that they help create many new jobs. support both owners and workers. give workers job security. eliminate unqualified workers.
c
One method for studying opportunity cost is to think in terms of risk and ability. pros and cons. cost and benefit. trial and error.
c
One of the three main questions of economics addresses who should produce goods and services. market goods and services. receive goods and services. distribute goods and services.
c
Opportunity cost occurs because of a producer's need to limit resources. protect resources. allocate resources. spend resources.
c
Price controls on goods can be set by consumers. economists. governments. producers.
c
Producers must understand the marginal benefit of making an additional unit, which shows the actual gain. eventual gain. possible gain. unlikely gain.
c
Read the excerpt from a letter about the early trade union movement. The trade union movement came into being as a movement of hunger. It was made necessary by conditions. It was in the beginning formed in response to a hunger for enough to eat . . . As it became possible to secure more food, other hungers demandedsatisfaction . . . The demands were for more and better food, for better clothes and for better homes. It required a struggle to satisfy these needs . . . [A]t every step of the way it was necessary to overcome the stubborn opposition of employers who were resolved not to recede and not to relinquish any of the powers and privileges which they possessed. —Samuel Gompers, 1920 What does the author believe about factory owners? They struggle just as workers do. They earned their privileges. They are greedy and selfish. They are stubborn but hardworking.
c
Read the quote from a member of the House. In order to do our job well, we spend a lot of time meeting with people who live in our states to tell them about what is happening in government and to listen to their ideas about how to improve life in our country. —Representative Mike Honda California District 17 San Jose, CA To which duty of a House member does this quote most likely refer? to propose and draft state laws to hire and manage staff in Washington D.C. and in the district to meet with constituents in Washington D.C. and in the district to serve on committees in the House
c
Typically, high inflation is a sign of a healthy economy because it results from a fall in production costs. a healthy economy because it results from a rise in consumer interest. a struggling economy because it results from a rise in production costs. a struggling economy because it results from a fall in consumer interest.
c
land
the natural resources used in the production of goods and services
Read this news report about a planned devaluation of the bolivar, the currency of Venezuela. The president of Venezuela announced that the country would be devaluating the bolivar for the fifth time in nine years. The official rate is falling from 4.3 bolivars to the dollar, to 6.3, a 32% devaluation. By increasing the bolivar value of exports of oil to the US and other nations, the government hopes to alleviate a budget crisis caused by its increasing reliance on borrowing to meet spending obligations. In response to the announcement, the people of Venezuela lined up today to buy televisions, electronics, and airline tickets in order to protect themselves from projected price increases. By devaluating the bolivar, the president of Venezuela has followed the law of supply and demand. allowed the exchange rate to remain unchanged. increased the number of bolivars needed to buy one dollar. decreased the number of bolivars needed to buy one dollar.
c
Read this scenario and answer the question that follows it. Sample scenario: A factory produces blue and green widgets, both at equal production costs. In one day, the factory can make 20 widgets of either color. The factory has been making 10 blue and 10 green widgets per day because they both sell for $5.00. Recently, the price of blue widgets has increased from $5.00 each to $8.00 each. How does the law of supply say the factory will respond to the increase in the price of blue widgets? by increasing the number of green widgets supplied by not changing the number of blue widgets produced by increasing the number of blue widgets supplied by decreasing the number of blue widgets supplied
c
The area in which the law of demand best applies is macroeconomics. social policy. microeconomics. political science.
c
The circle graph shows the GDP in Germany for 2012. Which sector of Germany's economy had the highest GDP? agriculture industry services technology
c
The citizens of the United States live and work in a closed economy. command economy. mixed market economy. pure market economy.
c
The graph is a marginal cost curve that compares expenses for producing apple pies. According to the graph, the marginal cost begins to increase when the producer makes two pies. three pies. four pies. five pies.
c
The graph shows a point of equilibrium. If supply for a product is low but demand is high, what most likely needs to happen to achieve equilibrium? The price needs to be raised. The price needs to be lowered. The supply needs to be raised. The demand needs to be lowered.
c
The graph shows changes in GDP in the United States from 2009 to 2011. How did the contribution of the services sector to GDP change between 2009 and 2011? It rose by less than 1 percent. It fell significantly. It rose significantly. It stayed exactly the same.
c
The graph shows the number of employed workers in the United States in nonfarm jobs from 2008 to 2013. What course of action might a government take to respond to the downturn revealed in this graph? reducing the size of its armed forces laying off unnecessary workers investing in job-training programs encouraging people to travel overseas
c
The graph shows unemployment rates in the United States in recent years. Which statement is the most accurate explanation of the information on the graph? Unemployment rates rise and fall in predictable patterns. Unemployment will never again be as high as it was in 2010. The United States suffered an economic downturn starting in 2009. The United States does not have to worry about unemployment.
c
The law of supply demonstrates the behaviors of producers when they change their company's name. decide to hire fewer workers. supply goods to consumers. launch a new marketing campaign.
c
The most common economic system in the world is a closed economy. command economy. market economy. traditional economy.
c
The most efficient way to ensure that producers are responsible for products is through advertising. legislation. labeling. compliance.
c
The person who has the job of maintaining order in the House is the Sergeant at Arms. Majority Whip. Speaker of the House. President of the House.
c
The study of the interaction between individuals and businesses is known as the law of supply. macroeconomics. microeconomics. elasticity.
c
This graph compares consumer expenditures in three American cities from 2007 to 2010. The best inference that can be made based on the graph is that workers in Houston are more likely to have jobs with high growth rates. workers in New York may face a cost of living that will exceed their salaries. jobs in San Francisco may have higher salaries to offset the cost of living. jobs in Cleveland tend to pay based on an hourly wage instead of a salary.
c
This graph compares the total cost of attending educational institutions in Texas. The graph demonstrates that the cost at private and public technical schools greatly varies. vocational schools greatly varies. four-year universities greatly varies. community colleges greatly varies.
c
This graph shows merchandise export data for the years 2010 through 2012. Which statement most accurately describes the information presented on the graph? The United States exported more merchandise than any other nation. The United States exported more than $2 trillion worth of goods in 2012. China exported more goods than the United States from 2010 to 2012. China exported more than $2 trillion in goods for each year on the graph
c
This graph shows the US unemployment rate from August 2010 to November 2011. This graph could help an economist predict how the government will address unemployment. why workers might have a harder time finding jobs. how many people will be out of work in the next year. why producers might hire fewer workers in the future.
c
This table shows the production possibility schedule for several toothpaste companies. Toothpaste company Large tubes Small tubes 1 Sparkling 100 per hour 200 per hour 2 Bright White 100 per hour 250 per hour 3 Fresh! 200 per hour 250 per hour 4 Mmmint 150 per hour 150 per hour Use the numbers to place the companies in order of greatest comparative advantage to least comparative advantage in producing large tubes of toothpaste. 2, 1, 3, 4 4, 1, 2, 3 4, 3, 1, 2 3, 2, 1, 4
c
Venya and Kari own a flower shop that specializes in custom bouquets. Wanting to expand into selling potted plants, they create a production possibility chart to asses whether the potted plants are a good idea. Study their chart: How many potted plants should they be able to produce on Day 3? 25 30 50 75
c
What do quotas and embargoes have in common? They both tend to raise prices. They both affect imports from certain countries. They both set limits on imported goods. They both frequently result in domestic shortages.
c
What is an example of a country that makes use of another nation's currency? France Germany Panama Mexico
c
What is one argument in favor of the wealth gap? The lower classes have the opportunity to invest. Poor people can easily move into the middle class. Investments by the upper class create lower-class jobs. Buying power sharply increases for the working class.
c
What is one benefit or drawback to an hourly wage? An hourly wage is a set payment. An hourly wage is regular over a year. An hourly wage may result in lower pay. An hourly wage will never vary in required hours.
c
What is one way for an entrepreneur to decrease risk? by mimicking popular products by maintaining personal flexibility by creating a strong business strategy by developing reliable sources for materials
c
What is the best definition of elasticity in economics? Elasticity of supply measures how the amount of a good changes when the producer hires more employees. Elasticity of supply measures how the amount of a good changes when the producer uses new materials. Elasticity of demand measures how the amount of a good changes when its price goes up or down. Elasticity of demand measures how the amount of a good changes when its distribution expands.
c
What is the best definition of marginal revenue? the possible income from producing an additional item the price of producing one additional unit of a good the additional income gained from selling an additional good the financial gain from business activity minus expenses
c
What kind of money is a gold certificate considered to be? commodity fiat representative currency
c
What would happen if currency in all countries had fewer denominations? People would be more likely to confuse the value of currencies. Exchanging money between countries would be much easier. People could not charge as many different prices for goods. All goods would be more expensive than they currently are.
c
When should fixed and variable monthly budgeted expenses first be planned? at the end of each month day by day during the month at the start of each month at least twice per month
c
Which best describes how a recession develops as demand and production decrease? The recession accelerates. The recession spirals out of control The recession feeds on itself. The recession starts and stops.
c
Which best describes how governments respond to changes in the business cycle? Governments issue more currency. Governments refuse to pass a budget. Governments change their policies. Governments reduce spending.
c
Which best describes what is represented in the business cycle model? the interactions between producers and consumers the change in production cost macroeconomic trends supply and demand trends
c
Which best describes what occurs in the product market? the exchange of labor for capital the exchange of goods and services for factors of production the exchange of goods and services for money the exchange of money for factors of production
c
Which best explains how the law of demand affects consumers? It helps consumers know when prices are going down. It helps consumers know when prices are going up. It helps consumers tell producers when prices are too high. It helps consumers tell producers when to make new goods.
c
Which can be traded in a commodities market? cars computers oil clothing
c
Which document determines the number of shares a company can sell? a stock prospectus an annual bill of rights a corporate charter an annual report
c
Which factor plays a role in establishing the price of a country's currency? attractiveness of the currency popularity of the country supply and demand distance between countries
c
Which of the following are examples of limited resources on the part of consumers? product and space money and product time and money space and time
c
Which of the following illustrates an opportunity cost? James has enough money to buy some socks and a book. Alyssa does not have enough time to study for her test. Amir only has time to study or to play basketball. Lydia does not have enough money to buy a new shirt.
c
Which of these is a banking activity of the Fed? printing money regulating securities markets storing money for banks funding government programs
c
Which of these is a positive incentive for domestic producers? a subsidy on imported cars a tariff on cars a subsidy on domestic oranges a tariff on clothes
c
Which of these is the best example of successfully managing a financial asset? buying a new video game console sending old objects to a thrift store opening a new savings account spending money on a vacation
c
Which of these scenarios involves commodity money? A girl writes a check to her friend for a stack of valuable comic books. A boy starts a lemonade stand and sells each drink for twenty-five cents. A woman offers her neighbor a US silver dollar in exchange for a bicycle. A man buys some T-shirts and pays with a US fifty-dollar bill.
c
Which of these statements most accurately describes the use of currencies in different parts of the world? Most countries use the dollar as their currency. Countries in Asia use the euro as their currency. Different countries use different currencies. All countries are required to use the same currency.`
c
Which resource is both renewable and inexpensive? gold coal lumber minerals
c
Which scenario best reflects the relationship between production and demand in a recession? Car dealerships have minimal overstock. Car dealerships are not restocking. Car dealerships cannot sell their stock. Car dealerships cannot obtain stock.
c
Which statement best describes incentives? Incentives are mostly positive. Incentives are mostly negative. Incentives can be positive or negative. Incentives are neither positive nor negative.
c
Which strategy best helps a company reach their consumers? selling at trade shows local mailings in small towns national advertising selective marketing
c
Which would be most helpful when considering a large expenditure that might require repeating payments? careful consideration of short-term goals recording income and spending over the past year creating a budget to consider future income and spending learning more about different kinds of accounts to manage money
c
Who benefits most from workplace safety regulations? employers, who are less likely to lose income and productivity due to serious employee injuries qualified workers with disabilities, against whom employers may no longer discriminate all workers, who are less likely to miss work because of injury or face high medical bills rival companies, which gain an advantage by using more cost-effective safety measures
c
Who in the House has the power to lead the caucus and control the agenda? the Majority Whip the Majority Floor Leader the Speaker of the House the Committee Chair
c
his table shows the cost of producing ice cream for several manufacturers. Manufacturer Amount Produced Cost The Dairy 100 gallons $10 Ice Cream, Inc. 100 gallons $15 Frozen Treats 150 gallons $12 Bob & Gary's 125 gallons $15 Which manufacturer has the absolute advantage? The Dairy Ice Cream, Inc. Frozen Treats Bob & Gary's
c
Ethics
can be defined in any of the ways above. A. are moral rules or standards governing human conduct. B. is a branch of philosophy. C. the moral principles of an individual person. D. are rules or standards governing human conduct, but not necessarily moral rules.
A clothing company wants to expand into new regions. It is looking at an urban area with very few vacant warehouses. The population is made up of people with average educations and a lower standard of living. The company is experiencing slower sales but has hopes that product will take off and be successful. Which of the factors of production will the company need to address most closely when making its decision to expand?
capital
Economic growth takes place when a country produces a steady number of automobiles. has a high unemployment rate. measures its gross domestic product (GDP). produces more goods and services.
d
down payment is an upfront payment of ____ to make a purchase.
cash
Which is the most liquid form of money?
cash and currency in circulation
Which technologies have made global communication instant and more effective? Check all that apply.
cell phones wireless devices smart phones
The Federal Reserve Bank of the United States is also known as the
central bank.
suppose that you are given a problem to solve and four ways to solve your problem. Which one of the following choices is an example of critical thinking?
checking your facts and alternatives before making a decision
the chart below shows a production possibility schedule for a pastry shop that makes a $.50 profit per doughnut and $.75 profit per bagel
choice B yields the largest profit
Governments collect taxes to ensure that
citizens contribute to meeting society's needs.
Which of these qualify as variable expenses? Check all that apply.
clothing purchases monthly groceries cable tv
Read the passage about a family health insurance plan. What is the $25 fee Maria's mother paid when Maria visited the doctor?
co-payment
The government has the right to own all land, buildings, and factories in a
command economy.
Globalization is the process of
connecting the world over time.
A person studying economics can make better choices about purchases if that person understands
consequences and tradeoffs.
Negative
consequences can result when an economy does not answer the three economic questions.
Lenders are prohibited from
considering borrowers' race, sex, and national origin.
Which are examples of programs or projects most likely funded by taxes paid by citizens of the United States? Check all that apply.
constructing a highway collecting garbage maintaining state parks
The most common measure of inflation is a statistic called the
consumer price index
Who ultimately pays for tariffs, consumers or producers?
consumers
Economics is the study of producing and _______ goods and services.
consuming
monetary policy involves decreasing the money supply.
contradictionary
A business owner would most likely create a cooperative instead of buying a franchise because
cooperatives allow all owners to share profits, while franchises are required to share profits with a parent company.
Purchasing power parity is used to compare the gross domestic product between
countries
Which of the following is an example of a land resource?
cow
One primary purpose of the European Union is to
create a common market.
Federal and state governments protect victims of identity theft by
creating laws that impose fines and jail time for identity thieves.
Which best describes a central bank's primary role?
creating monetary policy
APR on a loan may be adjusted based on a borrower's
credit history.
What types of money are included in the M2 category? Check all that apply.
currency savings accounts checking accounts short-term investment accounts
As a result of decreased production, David lost his job designing cars. Which terms can be used to describe David? Check all that apply.
cyclically unemployed unemployed
A clothing store has ordered a new supply of jeans for the fall season and wants to sell off the remaining items from the previous spring. What action would the store owner most likely take? The store owner would most likely raise the price of the spring jeans to encourage producers. The store owner would most likely lower the price of the spring jeans to encourage producers. The store owner would most likely raise the price of the spring jeans to encourage consumers. The store owner would most likely lower the price of the spring jeans to encourage consumers.
d
A currency's exchange rate is how many denominations the currency has. its stable rate as established by the government. how easily it can be divided into other currencies. its changing value relative to other currencies.
d
A government's monetary policy is its plan to control taxation and spending. prices. workers' wages. the money supply.
d
A new business should be based on an entrepreneur's individual interests because the entrepreneur must have sufficient confidence to succeed. be willing to take personal responsibility. have enough determination to work alone. dedicate as many hours as needed to the work.
d
A specific territory or zone that has laws and regulations different from the rest of the country is called a(n) work zone. border zone. tax-free zone. economic zone.
d
At what point does buying in bulk stop being a wise spending choice? when the consumer has a lot of space to store bulk items when costs rise too quickly due to demand when bulk items are not on sale anymore when the consumer buys more than is needed
d
Bonds are considered to offer a guaranteed return, as they must be honored by law, but which is still a potential risk that investors face? The issuer may not raise enough capital. The issuer could refuse to pay dividends. The issuer could go bankrupt. The issuer may not make a profit.
d
Brenda's Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total revenue the company makes after selling 10 boards? $300 $350 $400 $450
d
Customs duty on cars produced overseas is a type of positive incentive and subsidy. negative incentive and subsidy. positive incentive and tariff. negative incentive and tariff.
d
In economics, if a good is inelastic, consumers have lost an interest in purchasing it. producers have lost an interest in manufacturing it. its supply or demand is too sensitive to price changes. its supply or demand is not sensitive to price changes.
d
In personal finance, what is considered a need? something one would like to have something for which one budgets something one can afford something one cannot live without
d
In the United States, dollar bills, nickels, and dimes are representative money. commodity money. various currencies. different denominations.
d
Labor unions were certain to advocate for the best interests of workers because the government shut down factories that did not improve work conditions. the top factories were run by owners who wanted to retain their workers. the government required all labor unions to promote workplace reform. the labor unions were created by workers and made up of workers.
d
Motherboards, Inc., manufactures computer parts. The company's total revenue is the money the company earns after paying all of its production costs. the total wages the company pays workers in its factories and stores. the amount of money the company earns from selling an individual part. the amount the company receives from the sale of all of its computer parts.
d
Once stocks are on the market, which best explains how their prices are set? Prices are controlled by the issuing company. Prices are set by the financial market. Prices follow economic trends. Prices fluctuate on the basis of demand.
d
Producers hoping to earn profits supply goods and services to debtors. themselves. competitors. consumers.
d
Property taxes are usually determined based on the property owner's income. the amount of money invested in the property. the earnings generated by the property. the value of the property.
d
Read the graph that displays interest and total payments on a loan. Banks make the most money and take the most risk with an interest rate of 5 percent. 10 percent. 15 percent 18 percent.
d
Read the scenario below and then answer the question. Sample scenario: Scientists have created a new grass seed that stops grass growth at a specific length, eliminating the need to mow the lawn. The price of this seed is high, but many consumers still want to use it. As a result, several different producers supply a large amount of this seed to consumers. In order to attract consumers to their product, some producers lower their prices and supply fewer bags of seeds. What is the best description of the grass seed that is described in this scenario? a good with a low price a good with a high price a good with an inelastic supply a good with an elastic supply
d
Read the scenario. Raoul is heading to college and needs a reliable car. He has a steady part-time job that he can keep while in school, and he likes to change things up every now and then. However, he will not have a lot of extra money to spend on repairs and maintenance on his car. Based on this scenario, Raoul should buy a used car. lease a used car. buy a new car. lease a new car.
d
Read the scenario. The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. Based on the scenario, who is most affected by the situation taking place within Country D? the government of Country D the workers of Country D the businesses of Country D the government, workers, and businesses of Country D
d
Student-specific scholarships are awarded to students who have impressive athletic accomplishments. have impressive academic achievements. demonstrates a specific skill are members of a certain group.
d
The chart below shows an exchange rate table. In this table, the reference currency is the US dollar. Swiss franc. Japanese yen. euro.
d
The chart shows the marginal revenue of producing apple pies. According to the chart, the marginal revenue decreases by ten dollars as production increases. increases by ten dollars as production increases. falls to zero dollars as production increases. remains the same as production increases.
d
The cost of a decision is also known as a(n) personal cost. financial cost. long-term cost. opportunity cost.
d
The goal of a market economy is to sustain self-sufficiency. preserve traditional customs. create equality within a society. promote free economic choices.
d
The graph shows a demand curve. What change does the graph show? a decrease in demand as prices decrease an increase in price as demand decreases a decrease in income as demand increases an increase in demand as prices decrease
d
The graph shows a supply curve. Which change is illustrated by the shift taking place on this graph? an increase in demand a decrease in demand an increase in supply a decrease in supply
d
The graphs show the US unemployment rate and the price of whole milk between 2006 and 2012. What do these graphs indicate about the relationship between employment levels and prices during economic cycles? There is no link between prices and unemployment. Rising unemployment rates drive prices higher. Falling prices drive unemployment rates lower. As unemployment rates rise, average prices fall.
d
The job outlook for physical therapists is weak to very poor. depends on the economy. will remain stable. will improve over time.
d
The lack of competition within a monopoly means that offered goods and services are lackluster. the product's market is small. consumers must look elsewhere to find options. prices are uniform and do not vary.
d
The law of supply states that as the price of a good rises, the quantity supplied of that good disappears. decreases. remains the same. increases.
d
There are four stages in an economic recovery. 1. increased production 2. rising demand (occurs twice) 3. increased hiring In which order do these stages occur? 2, 1, 2, 3 3, 2, 1, 2 2, 3, 1, 2 2, 1, 3, 2
d
This chart shows Dan's budget: Did Dan stay on budget? Why or why not? Yes, Dan spent as much as he earned. No, Dan should move to a new apartment. Yes, Dan uses his savings to cover extra expenses. No, Dan should reduce his discretionary spending.
d
This graph shows the division of wealth in the United States in 2010. Based on this graph, how much wealth did the top 20 percent of the population hold? about 35 percent about 55 percent about 80 percent about 90 percent
d
This table shows the number of cookies several bakeries sell each day. Bakery Number of Cookies Sold Mrs. Track's 90 Chips 100 The Bakeshop 75 Uncle John's 125 All else being equal, which bakery has the absolute advantage? Mrs. Track's Chips The Bakeshop Uncle John's
d
This table shows the production possibility schedule for several toothpaste companies. Toothpaste company Large tubes Small tubes Sparkling 100 per hour 200 per hour Bright White 100 per hour 250 per hour Fresh! 200 per hour 250 per hour Mmmint 150 per hour 150 per hour Which company has the comparative advantage in producing large tubes of toothpaste? Sparkling Bright White Fresh! Mmmint
d
To generate higher profit margins, producers must work to increase their total supply. increase their total expenses. decrease their customer base. decrease their production costs.
d
What determines the value of an item? the amount of goods that are produced the capital required to build the factory the unlimited wants of the consumers the resources consumed in production
d
What event had an enormous effect on US workplace safety? a new minimum wage the first labor union a worker strike a deadly factory fire
d
What happens first when a bill is introduced in the House? The House votes to approve or reject the bill. Representatives debate the bill on the floor of the House. The Speaker decides whether the House will consider the bill. The bill is assigned to a committee, who looks into it and recommends changes.
d
What is one benefit for US workers who have a college degree rather than a high school diploma? More than 80 percent of jobs require a college degree. Those with a college degree report higher job satisfaction. Most workers with a college degree are immune to layoffs. Those with a college degree earn nearly twice as much as those without college.
d
What is one purpose of writing a business plan before entering the market? to prove that the new company will be successful to show that the enterprise is realistically based to have a useful tool when applying for funding to differentiate the new company from the competition
d
What is one way that technology can improve the distribution of goods? Workers can take Internet classes to gain new skills. Automation can create goods more cheaply and easily. Businesses can hire factory workers across the world. Container ships can transport a number of goods at once.
d
What is the definition of collective bargaining? ongoing salary negotiations between an employee and a factory owner an agreement among a group of factory owners to raise worker wages a written set of guidelines about legal and illegal workplace conditions labor union and employer negotiations about wages and other issues
d
What is the most likely reason why many of the New York Factory Investigating Commission's suggestions were not implemented immediately? The public did not support new safety regulations until several factory disasters occurred. Many of the suggested changes would have negatively affected the quality of products made in factories. Most workers outside New York would not have benefited from widespread factory reform. Factory owners resisted the suggestions because they would be costly to implement.
d
What term describes using assets to accomplish a goal in the present? budgeting saving investing spending
d
When revenues are higher than expenditures in a budget, that budget shows a deficit. is in balance. must be discarded. shows a surplus.
d
Which best describes a central bank's primary role? controlling inflation adjusting interest rates printing money creating monetary policy
d
Which best describes how consumers may benefit from specialization? Consumers are offered higher-quality goods. Consumers have more price options. Consumers receive more sale offers. Consumers find products at lower prices.
d
Which best describes what a central bank uses monetary policy to do? ensure that the government has a balanced budget influence financial institutions globally ensure that the government is sufficiently funded steer the economy away from recession and toward growth
d
Which best describes why a government's actions are important within macroeconomics? Government controls industry through policy. Government is both a consumer and a producer. Government can prevent changes and challenges. Government can use policy to influence the economy.
d
Which best explains how contractionary policies can hamper economic growth? They slow demand. They help increase consumer debt. They reduce consumer confidence. They reduce disposable income.
d
Which is an example of a demand account? savings account investment account credit account checking account
d
Which is an example of income withholdings? an unexpected salary cut income lost due to illness vacation budget retirement savings
d
Which is the best way to achieve long-term financial goals? Spend less on mandatory expenses. Eliminate short-term financial goals. Increase discretionary expenditures. Save more money from net income.
d
Which is true about investments and risk? Low-risk investments have a high return over the long run. High-risk investments usually fail. Safe investments are always somewhat profitable. Every investment carries some degree of risk.
d
Which of the House's functions is the most important? electing a president in a deadlock impeaching a federal employee reviewing Senate tax bills creating laws
d
Which of the following illustrates one of the three questions of economics? How many proposals do we need to get this product approved? Do our salespeople know how to price this product based on competition? Is this product going to cost more to distribute than our other products? Should we use the assembly line method to create this product?
d
Which of these statements most accurately describes currencies in North America? All countries in North America use the US dollar. All countries in North America use the euro. North American countries have done away with separate currencies. Each country in North America uses its own currency.
d
Which statement best defines tuition? Tuition is federal money awarded to a student. Tuition is aid given to a student by an institution. Tuition is money borrowed to pay for an education. Tuition is the price of attending classes at a school.
d
Which statement best describes how the Fed responds to recessions? It sells more securities. It charges banks more interest. It increases reserve requirements. It increases the money supply.
d
Which statement best describes the main cause of the 2008 housing market crash in the United States? Many people could not buy new homes during a weak economy. Many homes could not sell because housing prices rose too fast. Many homes could not sell because banks charged high interest. Many people could not make home payments during a weak economy.
d
Who mostly directly benefits when banks make a profit? employees, shareholders, and the economy shareholders, shoppers, and the economy employees, companies, and the economy shareholders, companies, and the economy
d
Why must the government consider companies' needs as well as those of workers? Workers often take advantage of safety and wage laws and regulations. Company owners can easily vote government officials out of office. Employers deserve the same benefits and protections as employees do. Regulations can be costly and may drive companies out of business.
d
Why should someone plan variable expenses after fixed expenses? Fixed expenses are deducted from gross income, and variable expenses come from net income. Variable expenses are a necessary part of fixed expenses but can only be calculated after fixed expenses. Variable expenses are almost always higher than fixed expenses and need a greater budget. Fixed expenses are required and constant, but variable expenses are not required and are more flexible.
d
With which statement would President Bill Clinton most likely have agreed? Free trade helps every nation. Free trade has drawbacks for participants. Free trade will eliminate poverty. Free trade must be carefully monitored.
d
Many checking accounts offer multiple ways of accessing money in addition to checks. Which of these can be used to access money in a checking account?
debit card
What is the main goal in creating the federal budget?
deciding how to manage the government's tax revenue and expenditures
When you buy in bulk, the price per individual item .
decreases
High government expenditures can lead to a bigger
deficit.
A limited amount of goods available means that excess is occurring.
demand
When people have more money and eagerly spend it, this increases
demand
A is a graph that shows how prices affect consumer demand.
demand curve
Time is measured along the x-axis. What is measured along the y-axis?
economic output
A specific territory or zone that has laws and regulations different from the rest of the country is called a(n)
economic zone.
Economics is different from a "hard" science like physics because:
economists cannot easily control all the variables that might influence human behavior.
The condition of a country's depends on its people's ability to exchange money for goods and services
economy
What are some of the common characteristics of industrialized nations with advanced economies? Check all that apply.
educated citizens access to health care higher incomes
Which of these are indicators measured by the HDI? Check all that apply.
education gross national income life expectancy
The pie chart shows federal spending in 2010. Which of the following was the highest spending priority for the federal government in 2010?
education/health and human services
Trade agreements can cause jobs to go to countries that provide those jobs
efficiently.
In which category do commodities belong?
either short- or long-term investment
What term describes a ban or restriction on trade with another country?
embargo
When an economy suffers from low production, a country cannot
enjoy a steady rate of economic growth.
A currency shared by several countries in Europe is the
euro
In order for a market's ethics to be effective, all of the following must occur, EXCEPT
everyone must agree to take part in the market.
Each currency has a changing value relative to other currencies. This is referred to as a currency's
exchange rate
scarcity
exists when human wants (material and nonmaterial) exceed available resources
The exchange of factors of production for income occurs ___ in the market.
factor
One negative consequence of using automation to improve manufacturing production is that
factories often need fewer workers
tWhich of the following is an example of market failure? sources are also known as
factors of production
Resources needed to provide goods or services are called
factors of production.
Cost-benefit analysis can determine the optimal amount of all the following EXCEPT
fairness of rules
Which are types of income tax that people pay? Check all that apply.
federal local state
The _____ rate is the interest rate banks charge each other for borrowing or storing money.
federal funds
Which activity would a consumer most likely perform?
filling a lawnmower with gas
What must an entrepreneur do after creating a business plan?
finance
Which group does the Fed serve?
financial institutions
Which of the following are considered needs? Check all that apply.
food residence water
Opportunity cost means that something needs to be
given up.
Bank deposits help the nation's economy by
giving banks the money to loan and invest.
intangible goods
goods that we cannot reach out and touch, such as friendship and knowledge
Countries establish internal economic zones in order to
have fewer economic restrictions.
Economic patterns
help economists make forecasts, which are also called predictions.
The term liquidity refers to
how quickly money can be exchanged.
William Poole believes economics should be taught in schools because students will learn
how to make good decisions within an economy.
Which term best describes the type of assistance non-governmental organization such as Doctors Without Borders provide?
humanitarian aid
When government intervention makes currency worthless, this condition is called
hyperinflation.
Sara would like to open a bank account. What will she need to do this? Check all that apply.
identification card money to start the account proof of address
Money for a personal loan is usually issued to the borrower
in one lump sum.
Despite the warning on a package of cigarettes about the potential health hazards of smoking, a man lights up a cigarette. An economist would conclude that:
in the man's judgment, the expected marginal benefit of smoking the cigarette outweighs the expected marginal cost.
What is a potential negative effect of an expansionary policy?
increased inflation
resources
inputs used to produce goods and services
services
intangible items of value provided to consumers, such as education
Which best describes a central bank's primary goals?
limiting inflation and reducing unemployment
The main advantage that corporations have is
limiting liability for owners and stockholders.
Economists studying the money supply categorize the status of the money based on
liquidity.
Which describes a type of tax that funds city programs?
local income tax
Ricardo works part time at a local computer store. One day, his manager approaches him about moving from cashier to floor supervisor. Ricardo is excited because the promotion comes with a raise; however, the extra work hours would take away from time with his friends. In the end, he decides to take the promotion. What is Ricardo's opportunity cost?
losing extra time to spend with his friends
It is better for businesses to have opportunity costs, as it often gives them a comparative advantage.
lower
The document shows a personal allowances worksheet. The document asks about dependents because the number can
lower overall taxes.
Which resource is both renewable and inexpensive?
lumber
which of the following groups of names contains only capital resources?
machine, tools, and factories
Which of the following serve as the language of the market system?
market prices
product markets
markets in which households are buyers and firms are sellers of goods and services
FACTOR (OR INPUT) MARKETS
markets in which households sell the use of their inputs (capital, land, labor, and entrepreneurship) to firms
When economists speak of markets, they primarily mean:
mechanisms that coordinate actions of buyers and sellers.
What area of economics focuses on the interactions between individual consumers and producers?
microeconomics
is the type of competition that occurs in a competitive market without identical producers.
monopolistic
are items such as utilities, rent, and food—items that one can't do without.
needs
Zahara Smith is wondering how she can make her check stretch enough to afford her monthly cable, water, grocery, and cell phone bills. Zahara is concerned with
needs and wants.
Often duties and taxes are imposed on cars that are imported from other countries. What types of incentives are these duties and taxes?
negative incentive and tariff.
When someone is considering a career as a lawyer, future earnings minus the cost of law school is the
net benefit.
A monthly fixed rate mortgage payment
never changes.
A market economy without any ethics would have:
no value
Ethical rules based on morals or concepts of fairness are called
normative ethics
School band members need to raise money for new uniforms. Some members want to sell energy drinks at a football game, but others want to organize a car wash in the school parking lot. Based on economics, what would be most influential in making the decision? the labor needed the consumer appeal the capital needed the value of the resources
not a and b
Wellness Pharmaceuticals has released a new antidepressant, Lexabuzac. Which type of monopoly does the company most likely have on this medication? natural monopoly de facto monopoly government monopoly technological monopoly
not a maybe d
Which of the following events most likely explains renewed demand in a recovery period? Increased employment means increased availability of funds. Need and, hence, demand increase as goods wear out. Producers decrease prices to prompt demand and recovery. Economic policy renews consumer confidence and, hence, demand.
not a not c
Which best describes the role that government and business play in investments? They both use taxes to support a country's growth. They both invest money to earn a profit. They both receive capital to use for growth. They both act as angel investors for start-up
not b
Analyze the chart, which depicts a typical corporate structure. Based on the chart, the primary responsibility of shareholders is to run the business by electing a board of directors, who then hire the company's leaders. run the business by electing a board of directors and hiring a president and other leaders. make business decisions on the advice of a board of directors, a president, and other leaders. make business decisions on the advice of a board of directors, who follow the expertise of leaders.
not c
Are the buying and selling of stocks centralized activities? Why or why not? Yes, the New York Stock Exchange is the principal exchange for the nations of the world. No, people can buy stocks anywhere, and they do not need to go through a market. Yes, the world's stock markets are coordinated exchanges, and they are dependent on one another. No, there are many stock markets around the world, and they are independent of one another.
not c
Read the scenario. Ricardo works part time at his local computer store. One day, his manager approaches him about moving from cashier to floor supervisor. Ricardo is excited because the promotion comes with a raise, but the extra work hours would take away from time with his friends. In the end, he decides to take the promotion. What is Ricardo's opportunity cost? Choosing the promotion over time with his friends. Being able to use the extra money for summer football camp. Losing extra time to spend with his friends. Receiving another promotion in six months.
not c
If a company pays dividends on a stock, does that mean that the stock has appreciated in value? Why or why not? Yes, the payment of dividends indicates that a stock's value has increased. No, the payment of dividends indicates that a company has earned profits. Yes, the payment of dividends indicates that a company's assets have grown. No, the payment of dividends indicates that a company can repay investors.
not d
Which best describes how the government enables government monopolies to exist? by issuing a patent by allowing natural monopolies to exist by creating and running a monopoly by owning the means of production
not d
Which of these is the most significant item that personal finance skills can affect? one's investment earnings one's spending power one's quality of life one's ability to save
not d
Which of the following will be accomplished by assessing the factors of production? ensuring economic profitability understanding whether a product will fail guaranteeing the fulfillment of needs and wants replenishment of limited resources
not d and a
Fantastic Snack Company has spent months developing a new type of snack chip, but the chips are not selling. Which of the following is the most likely mistake Fantastic Snack Company made?
not meeting the wants of its consumers
The Davis family grows organic vegetables to sell at a local farmer's market. Which are factors that directly affect their profit? Check all that apply. an increase in the cost of farm equipment a rise in demand for organic produce an increase in customers at the market a change in the market price for non-organic fruit a sale on organic meats at the market
not the combination of 1&2&4
Which best explains why producers choose to specialize? Check all that apply. to increase sales to gain a comparative advantage to decrease the amount of goods produced to maintain market share to increase efficiency
not the combination of 1&4&5 not the combination of 2&4&5
Which of these factors would strengthen demand for a nation's currency on the international market? Select all that apply. high domestic inflation stability of government victory in war high gross domestic product defeat in war low unemployment rates
not the combination of 12346
What role does a fast-food corporation play when it agrees to franchise its business? Check all that apply. The franchisor will supply training. The franchisor will license a trademark. The franchisor will select a location. The franchisor will pay associated fees. The franchisor will supply advertising. The franchisor will collect most profits.
not the combination of 135
What can be a result of free trade? Check all that apply. trade imbalances decreased production lower economic growth increased pollution exploitation of workers new opportunities
not the combination of 145
To be successful, an entrepreneur must be willing to invest money, considerable effort, and .
not tome probably time
The Middle East is best associated with which internationally traded product?
oil
The graph shows government spending as a percentage of GDP from 1990 to 2012. At its peak, government spending made up about
one quarter of GDP.
opportunity cost
one that must be given up in order to get something else; a trade-off
economists
one who earns a living studying a nation's economic system or its parts
If we know someone pays all their taxes and gives money to charity, we know that
only that they pay their taxes and give money to charity
Credit unions differ from retail banks because they are
owned by their members.
which one of the following is an example of an economic good?
pair of sneakers
Two doctors who join forces in business form a
partnership
Income reaches the highest level at the point of the business cycle.
peak
Income reaches the highest level at the ____ point of the business cycle.
peak
rational behavior
people do the best they can, based on their values and information, under current and anticipated future circumstances
the reason scarcity exists is that
people want more goods and services than can be produced
Which is always a cost when buying insurance?
premium
Cost-push inflation occurs when
producers need more money to make and distribute goods.
The three questions of economics best help in making decisions about ______
production
What is a graphical representation of the combination of goods and services that can be produced in a situation?
production possibility curve
what is a geographical representation of the combination of goods and services that can be produced in a situation?
production possibility curve
which is a graphical representation of the combination of goods and services that can be produced in a situation
production possibility curve
Rescooperate Ice Cream Shop recently analyzed their books. They found that in the past year, they made $100,000 selling ice cream and spent $75,000 on supplies and factory space. The remaining $25,000 represents
profit
and business recently analyzed their books. the found that in the past year they made $100,00 and spent $75,000 on supplies and factory space. the remaining $25,000 represents
profit
________ = ________ - _________
profit = revenue - production cost
Which of the following lists the proper placement of terms, from left to right, to complete the equation?
profit, revenue, production cost
which of the following lists the proper placement of terms from left to right, to complete the equation? (x=y-z)
profit, revenue, production cost
producers can create their maximum combination of goods, as long as they
properly allocate resources
Producers can create their maximum combination of goods, as long as they
properly allocate resources.
The chart shows how two people with different incomes are taxed. According to the chart, the citizens are being taxed .
proportionally
The chart shows how two people with different incomes are taxed. According to the chart, the citizens are being taxed
proportionally
What are standards designed to do? Check all that apply.
protect consumers limit imports ensure safety
The basic purpose of insurance is to provide
protection.
Excess supply is created when price or move away from the equilibrium point.
quantity
When economists refer to economic behavior, they mean that:
rational people try to anticipate the likely consequences of their actions.
An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. What type of risk management is this an example of?
reducing risk.
When governments inject money into the economy, which of the following are their goals? Check all that apply.
reducing unemployment improving economic stability encouraging competition improving production
A _____ can be defined as whatever people use to create services and goods.
resource
A can be defined as whatever people use to create services and goods.
resource
A can be defined as whatever people use to create services and goods.
resources
Economists believe that individuals act as if they are motivated by self-interest and:
respond in predictable ways to changing circumstances.
Long-term investments are most commonly used to save money for .
retirement
A company makes $200,000 in a year and has $150,000 in production costs, leaving them with $50,000. The $200,000 represents
revenue
a company makes $200,000 in a year and has $150,000 in production costs, leaving them with $50,000. The $200,000 represents
revenue
a company makes $200,000 in a year and has $150,000 in production costs, leaving them with $50,000. the $200,000 represents
revenue
For the time period shown, the value of the US dollar was generally
rising against the Canadian dollar.
According to the graph, 1971 to 1976 was a period of stagflation due to
rising unemployment and inflation.
Becoming informed about economics helps a person understand the
role of government in regulating production.
If an economy does not answer the three economic questions, resources may
run out
Based on the chart, the primary responsibility of shareholders is to
run the business by electing a board of directors, who then hire the company's leaders.
Regulatory agencies such as the OCC and the FDIC add to the banking system.
safety
a good or service has value because it
satisfies a human want or need
Which of these factors would strengthen demand for a nation's currency on the international market? Select all that apply.
stability of government victory in war low unemployment rates
In addition to federal income tax, many people also pay
state income tax.
Which investment is best for someone who is likely to need cash soon?
savings account
Which is an example of a short-term investment?
savings account
Banks pay interest to customers through a
savings account.
A basic concept in economics is that all resources are
scarce
A resource has value, and people are willing to pay for it most likely because the resource is
scarce
the economic problem
scarcity forces us to choose, and choices are costly because we must give up other opportunities that we value
A producer would most likely
serve in a coffee shop.
People who buy stock in a company are known as
shareholders
People who buy stock in a company are known as .
shareholders
Which is the correct order of entities who benefit when banks make a profit?
shareholders, companies, and the economy
New technology in _______ allows producers to use materials from all over the world to manufacture goods.
shipping
New technology in allows producers to use materials from all over the world to manufacture goods.
shipping
When revenues are higher than expenditures in a budget, that budget shows a deficit.
shows a surplus.
To create a balanced budget, one must make sure to
spend less than or equal to income.
Which of these is a banking activity of the Fed?
storing money for banks
Which of the following lies primarily within the realm of microeconomics?
study of supply and demand for orange juice
Economics is mostly concerned with
studying how we allocate scarce resources to satisfy unlimited wants.
The idea of supply and demand is based on the development of
sufficient products to meet consumer wants.
The amount of a good or service available in a market at a given price is known as ________
supply
Which factor plays a role in establishing the value of a country's currency?
supply and demand
What does deficit spending require a government to do?
take on debt
A(n) is a tax issued by the federal government on imported goods.
tariff
A(n)_____ is a tax issued by the federal government on imported goods.
tariff
what is the opportunity cost to a nation that chooses to spend another $1 billion on a defense project rather than on education program?
the $1 billion education program
The Federal Reserve transfers profits from its twelve regional banks to
the Department of the Treasury.
What is the full name of the US central bank, known as the Fed?
the Federal Reserve Bank
Which organization maintains the Human Development Index (HDI)?
the United Nations
What does life expectancy measure?
the average number of years that a population is likely to live
Economics is conserned with
the choices people must make because resources are scarce, human decision makers and the factors that influence their choices, the allocation of limited resources to satisfy virtually unlimited desires
Based on the lesson, what would most affect the price a consumer is willing to pay for a newer version of a laptop computer?
the demand for the added performance elements
Market failure occurs when:
the economy fails to allocate resources efficiently on its own.
capital
the equipment and structures used to goods and services
Human capital is
the expertise or knowledge possessed by workers.
In a command economy, a cotton farm floods after a heavy storm. The repair work most likely will be paid by
the government group that runs the farm.
The opportunity cost of an item is:
the highest valued alternative you give up to get that item.
fallacy of composition
the incorrect view that what is true for the individual is always true for the group
capital resources
the machines, tools, and buildings used in the production of goods and services
human resoucres
the people who contribute to the production of goods and services
labor
the physical and human effort used in the production of goods and services
market
the process of buyers and sellers exchanging goods and services
entrepreneurship
the process of combining labor, land, and capital to produce goods and services
human capital
the productive knowledge and skill people receive from education, on-the-job training, health, and other factors that increase productivity
Macroeconomic topics do not usually include:
the profit maximizing decisions of an individual manufacturer.
Entrepreneurship is
the resource that organizes the other factors of production in order to produce goods and/or services.
What determines the value of an item?
the resources consumed in production
microeconomics
the study of household and firm behavior and how they interact in the marketplace
economics
the study of how people choose to use the scarce resources to satisfy their needs and wants
macroeconomics
the study of the whole economy, including the topics of inflation, unemployment, and economic growth
economic resources
the things that go into the creation of goods and services
aggregate
the total amount—such as the aggregate level of output
empirical analysis
the use of data to test a hypothesis
Property taxes are usually determined based on
the value of the property.
School band members need to raise money for new uniforms. Some members want to sell energy drinks at a football game, but others want to organize a car wash in the school parking lot. Based on economics, what would be most influential in making the decision?
the value of the resources
Where do banks get money to lend to borrowers?
their depositors
which of the following true of a resource?
they are inputs used to create goods and services
People might choose to use a debit card rather than cash for purchases because
they do not want to carry around large amounts of cash.
Franchises are attractive to business owners because
they have a proven business model.
Because many successful business owners fail on their first attempts, the reader should assume that
they learned from their mistakes.
Economists believe that in regards to criminal behavior:
those choosing to commit criminal acts weigh the expected marginal benefits versus the expected marginal costs.
Which of the following are examples of limited resources on the part of consumers?
time and money
What is one purpose of writing a business plan before entering the market?
to differentiate the new company from the competition
How do economists use data? Check all that apply.
to follow and predict unemployment rates to explain trends in production and shipping
The best reason to record income at the top of a budget is
to know how much money is available.
Which best explains why a sole proprietor would want a partner?
to make it easier to raise funds for expansion
Which of these is most likely the US government's aim in taxing imported goods?
to protect domestic businesses
What can be a result of free trade? Check all that apply.
trade imbalances increased pollution exploitation of workers new opportunities
To barter means to
trade.
one method for studying opportunity cost is to think in terms of
tradeoffs
A credit score tells a lender how
trustworthy someone is as a borrower.
If investors can earn 10 percent interest in an account in Mexico but just 3 percent in the United States, those investors will most likely
want to invest in Mexico, which will cause the peso to appreciate.
The difference in income between the richest and poorest citizens is called the
wealth gap
Producers can generate instant sales by using
websites.
From what part of income should someone take savings?
what otherwise would be discretionary income
Which of the following could be considered both a renewable resource and a nonrenewable resource?
wheat crop
When can a credit agency release someone's credit information in Florida?
when a consumer authorizes it
efficiency
when an economy gets the most out of its scarce resources
causation
when one event brings about another event
market failure
when the economy fails to allocate resources efficiently on its own
correlation
when two events occur together
What does the concept of scarcity explain? Check all that apply.
why consumers are willing to pay high prices for items. why decisions must be made on how to use resources why a single resource has more value than another resource.
