Economics Final

What is the most common form of business organizations in the United States? • Limited Partnership • Sole Proprietorship • Partnership • Corporation

Sole Proprietorship

Want

Something we desire, but not necessary to have.

What is the largest labor union in the country? • Steel Workers • AFL-CIO • United Auto Workers • Textile Workers

AFL-CIO

Gross Domestic Product

Describes, in dollars, how much is produced within our borders.

Profit motive

Driving force that encourages people and organizations to improve their material well-being

The minimum wage is an example of a federal law that supports • Economic Growth • Full Employment • Economic Efficiency • Economic Equity

Economic Equity

The most important factor in this is an increase in productivity

Economic Growth

Market Economy

Economic system in which supply, demand, and the price system help people make decisions and allocate resources.

Traditional economy

Economic system in which the allocation of resources and nearly all other economic activity stems from ritual or habit

Traditional Economy

Economic system that uses ritual or long standing procedures to determine economic decisions.

Need

Food, Clothing, Shelter. Necessary things to survive.

Fixed Income

Income that does not go up even if prices go up

What is the single largest source of revenue for the federal government? • corporate income taxes • FICA Taxes • Individual Income taxes • user fees

Individual income taxes

Which of the following is NOT a strength of a market economy? • it gives producers and consumers freedom • it supports all of its people equally • it can adjust to change over time • it has decentralized decision making

It supports all of its people equally

Branch of economics that deals with the economy as a whole including unemployment rates, GDP, etc. • Money and Banking • Microeconomics • Macroeconomics

Macroeconomics

Location or other mechanism that allows buyers and sellers to exchange a certain economic product

Market

Which of the following is NOT a theory used to explain differences in wages? • Theory of Negotiated Wages • Signaling Theory • Market Force Theory • Traditional Theory of Wages

Market Force Theory

Elasticity

Measures how responsive a change in price is to the quantity demanded or supplied.

Sole Proprietor

Type of business organization that is owned by a single person

Capacity to be useful and provide satisfaction

Utility

Accumulation of those products that are tangible, scarce, useful, and transferable from one person to another

Wealth

Which of the following is NOT a fundamental question each society must answer? • How to produce? • What to produce? • For whom to produce? • When to produce?

When to produce

Which is not an example of a service?

a bracelet from Kay Jewelers

An example of resource immobility is • a delay in the delivery of an overnight package • building an office park at a former military base • an employee leaving town for a higher paying job • a dam located at the mouth of a river that's run dry

a dam located at the mouth of a river that's run dry

A decrease in competition within an industry can result in • increased output • more efficient use of resources • a firm wielding economic and political power • lower prices

a firm wielding economic and political power

Computer software used to track inventory at a business is an example of • natural resource • fixed resource • labor • capital good

capital good

Which of the following is an example of a good? • an oil change • Car Wash • Tune-up • Car

car

A government document granting permission to create a corporation is called a what? • dividend • proxy • bond • charter

charter

Factors of production

land, labor,capital, entrepenuers

Which of the following courses of action are put in action by the business itself and not the workers? • boycott • picket • lockout` • strike

lockout

When a major car company lowers its prices, other car makers will probably • maintain existing prices • raise their prices • go out of business • lower their prices

lower their prices

The purpose of a government in a command economy is to • ensure the availability of consumer products • make major economic decisions • promote economic freedom • encourage entrepreneurs

make major economic decisions

Which are important for their ability to move resources, products, and financial capital across national boundaries with relative ease? • conglomerates • corporations • mergers • multinationals

multinationals

Which of the following best describes the relationship between trade-offs and opportunity costs? • trade-offs lower the opportunity costs of an economic decision • opportunity costs are the opposite of trade-offs • opportunity costs are incurred when trade-offs are made • trade-offs occur when there are no opportunity costs

opportunity costs are incurred when trade-offs are made

An advantage of a corporation is that • owners have limited liability for debt • owners have direct and immediate control over daily management of the business • the business is subject to little government regulation. • owners pay fewer taxes than owners of other forms of business.

owners have limited liability for debt

The situation in which some necessities have little value while some non-necessities have a much higher value is known as • paradox of value • trade-offs • economic interdependence • opportunity cost

paradox of value

What are workers doing when they are parading in front of a business with signs that display their issues and displeasure? • Boycotting • Locking out • Grievance • Picketing

picketing

As __________ increases the problem of ___________ is only going to get worse. • population, scarcity • utility, wants • needs, risk • scarcity, capital

population,scarcity

Which of the following is NOT a reason why prices effectively perform the allocation function? • competitive markets find their own prices without interference • prices favor neither the producer nor the consumer • prices remain surprisingly stable despite unexpected events • prices are easily understood

prices remain surprisingly stable despite unexpected events (correct answer)

What was the first minimum wage? • $.15 • $.75 • $.25 • $.50

$.25

When employees are getting in each other's way, the firm is operating in what stage of production? • 1 • 2 • 3 • 4

3

Regional differences in wage rates are influenced by all of the following factors EXCEPT • cost of living • location • labor mobility • All of the above

All of the above

Which of the following is not an example of an oligopoly? • Coke and Pepsi • Major Automobile makers • Cell phone carriers • All of the above are oligopolies

All of the above are olgipolies

Which of the following are examples of traditional economies? • North Korea and Cuba • South Africa and Norway • Australian Aborigines and Certain tribes in Africa • United States and Japan

Australian Aborigines and certain tribes in Africa

Who decides whether a corporation will reinvest its money or not? • Board of Directors • Chief Executive Officer • President • Corporate Financial Officer

Board of Directors

Factor of production that includes tools, equipment, machinery, and factories used in the production of goods and services

Capital

People who are 16 years old or older who have a job or are actively looking for a job. • Professional Military Force • Independent Labor Force • Military Labor Force • Civilian Labor Force

Civilian Labor Force

What type of economy recently collapsed in the communist bloc countries of Eastern Europe and the former Soviet Union? • Command Economy • Free Enterprise Economy • Traditional Economy • Market Economy

Command Economy

After World War II the popularity of unions declined because many people thought they were run by what group? • Socialists • Republicans • Democrats • Communists

Communists

Purchasing a product with the hopes of impressing people with a name brand.

Conspicuous Consumption

What type of cooperative often buys bulk amounts of goods such as food or clothing on behalf of its members? • Consumer Cooperative • Producer Cooperative • Service Cooperative

Consumer Cooperative

People who purchase goods and services to satisfy their wants and needs.

Consumers

What terms is described as a voluntary association designed to carry on some sort of economic activity that will benefit members? • Corporation • Multinational • Cooperative • Conglomerate

Cooperative

An apprenticeship, college courses, volunteer work, etc. are all examples of you investing in yourself. These things are known as what? • Job Growth • Employee Contributions • Human capital • Human projects

Human capital

Value

If a product is useful it will have this.

Basic requirement for survival

Need

A product that will more than likely last less than 3 years

Non-durable good

Monopoly

One producer dominates the market

The cost of the next best alternative when a choice is made

Opportunity Cost

Economic system

Organized way in which a society provides for the wants and needs of its people

Which of the following is not a reason why businesses merge: Pay lower than average wages • create more income • create new jobs • bring in new technology

Pay lower than average wages

The concept of voluntary exchange means • No money was exchanged • People and businesses freely and willingly engage in market transactions • Only workers will benefit from the exchange • Neither buyer nor seller has made a profit

People and businesses freely and willingly engage in market transactions

Measure of the amount of output produced by a given number of inputs in a specific period of time.

Productvity

What term is given to people who cross picket lines and take striking workers jobs? • Labs • Crabs • Drabs • Scabs

Scabs

Condition that results from society not having enough resources to produce all the things people would like to have.

Scarcity

An example of a market economy is • North Korea • Former Soviet Union • The Inuit of Northern Canada • The United States

The United States

Intergovernmental Revenue

This government revenue is collected from another level of government.

A monopoly based on the absence of other sellers in a certain location is called • an oligopoly • a natural monopoly • a geographic monopoly • a technological monopoly

a geographic monopoly

Which of the following is a consumer good?

a pair of shoes from Mason Shoe

An increase in the price of milk causes a decrease in the demand for cereal. • substitutes • complements • unrelated • demand elasticity

complements

A corporation that has at least 4 businesses, each making unrelated products, none of which is responsible for a majority of its sales is called a what? • mega-corporation • conglomerate • corporation • multinational

conglomerate

Advertising, fashion trends, and new product introductions serve to • create consumer needs • increase income effectiveness • create consumer demand • minimize income effect

create consumer demand

To reach a point outside the production possibilities frontier a country would have to do what? • shift resources from one item to another • decrease resources • create more resources or become more productive • limit the population

create more resources or become more productive

Which of the following would NOT contribute to economic growth? • capital stock rising • becoming more efficient • increase in population • decrease in productivity

decrease in productivity

For most products and services, increased price results in • demand for fewer products • demand for more products • reduced demand for substitutes • increased demand for complements

demand for fewer products

Monopolistic competition is separated from perfect competition by • collusion • profit maximization • differences in products being sold • price fixing

differences in products being sold

What is the main advantage for companies that become conglomerates through acquisitions of other companies and mergers? • diversification • unlimited life for the company • conglomeration • multinationals

diversification

A market economy • permits extensive government intervention • offers a high degree of certainty for its workers • limits the choices of goods and services available • does not provide for basic needs for everyone including the very old and very young

does not provide for basic needs for everyone including the very old and very young

What is the main strength of the corporate form of business organization? • ease of raising money • freedom from all business taxes • ease of start up • ease of management

ease of raising money

All of the following are characteristics of allocation by rationing EXCEPT • lack of fairness • efficiency • high administrative cost • diminished incentive for workers

efficiency

All of the following are characteristics of capitalism EXCEPT • private property rights • economic freedom • profit motive • extra government control

extra government control

A ___________ is provided by the government and allows a company to do business in a certain area without competition, but they must accept a certain amount of govt. regulation. • franchise • monopoly • patent • corporate charter

franchise

For something to have value, it must • cost a lot of money • be on sale • have utility • never go out of style

have utility

This is the sum of the skills, abilities, health, and motivation of people. • factor market • productivity • GDP • human capital

human capital

This is the sum of the skills, abilities, health, and motivation of people. • human capital • GDP • factor market • productivity

human capital

An example of mandatory spending is financing for • welfare programs • elementary and secondary education • National defense • interest payments on the federal debt

interest payments on the federal debt

The invisible barrier that hinders women and minorities from advancement up the corporate ladder • has been ignored by Congress • is known as the glass ceiling • is the comparable worth issue • has been reinforced by use of set contracts

is known as the glass ceiling

Force that encourages people and organizations to improve their material well-being is the definition for what term? • capitalism • free market • voluntary exchange • profit motive

profit motive

The individual income tax is a(n)

progressive tax

The local chamber of commerce works to • aid member companies in negotiating with labor unions • protect its members from consumer complaints • promote the welfare of its members and the community • earn dividends for members

promote the welfare of it's members and the community

Perfect competition is characterized by all of the following EXCEPT • identical products • well-informed buyers and sellers • a large number of buyers and sellers • sellers acting together to set prices

sellers acting together to set prices

If a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary • surplus will occur and the price will increase • shortage will occur and price will fall • surplus will occur and the price will fall • shortage will occur and the price will increase

shortage will occur and the price will increase

A monopoly that is based on the ownership or control of a manufacturing method, process, or scientific advance is a • natural monopoly • geographic monopoly • technological monopoly • government monopoly

technological monopoly

Unlike a general partnership, in a limited partnership

the inactive partner has limited liability for the business's debts

he two broad categories of government spending are • public and private • defense and welfare • the purchase of goods and services, and transfer payments • payments and transfers

the purchase of goods and services, and transfer payments

Which is an example of economic growth? • the price of vegetables increases sharply in the spring • a man decides to quit working and begin a new career • an employer is fined for refusing to hire women to fill openings • when a new ball bearing plant opens and 1,500 jobs are created

when a new ball bearing plant opens and 1,500 jobs are created

All of the following are reasons women receive less pay than men EXCEPT • women do not work as hard as men • women tend to enter lower paying fields • women encounter discrimination • women have different skills

women do not work as hard as men

Market System

Economic system where buyers and sellers create prices.

Command economy

Economy in which a central authority makes most of the what, how, and for whom decisions

Something that cannot be touched

Intangible

Marginal Utility

It is the difference in satisfaction between units that a consumer purchases.

Microeconomics

It is the study of how individual consumer choices impact markets

Factor of production that could include climate, minerals, sunshine, trees, etc.

Land

Factors of Production

Land, Labor, Capital, and Entrepreneurs

For something to have value, it must • never go out of style • be on sale • have utility • cost a lot of money

have utility

Because a large price increase has little or no effect on demand the product is

inelastic

Which of the following is not one of the market structures we have discussed in class? • monopolistic competition • monopoly • oligopoly • inelastic competition

inelastic competition

The largest source of revenue for states is • property taxes • sales tax • income taxes • intergovernmental revenues

intergovernmental revenues

In a general partnership • partners must pay specific business taxes • partners are only liable for the business's debt up the amount of their investment • the business continues even if one partner dies • partners usually draw up legal papers called articles of partnership and share in the business equally

partners usually draw up legal papers called articles of partnership and share in the business equally

Which characteristic does not fit in the definition of an economic product - goods and services that are . . . • relatively scarce • permanent • transferable to others • useful

permanent

As __________ increases the problem of ___________ is only going to get worse. • utility, wants • population, scarcity • scarcity, capital • needs, risk

population, scarcity

In a market economy, a high price is a signal for • producers to supply less and consumers to buy less • government to intervene to protect consumers • producers to supply less and consumers to buy more • producers to supply more and consumers to buy less

producers to supply more and consumers to buy less

A lawyer would fall into what labor category?

professional labor

The "incidence of a tax"

refers to those who bear the burden of final taxation

A high tax designed to raise revenue and reduce consumption of a socially undesirable product • commodity tax • sin tax • no good tax • sales tax

sin tax

Workers who have the skills to operate complex machines or work in occupations that require a lot of training are said to be this type of laborer. Examples would included plumbers and electricians.

skilled labor

The supply of a product normally decreases if • the cost of inputs goes down • the price of the product increases • more producers enter the market • taxes on the product increase

taxes on the product increase

When producers offer fewer products for sale at each and every price, • the supply curve has shifted to the right • the price per unit decreases • they expect subsidies • the supply curve has shifted to the left

the supply curve has shifted to the left

All of the following are characteristics of a command economy EXCEPT • it can change directions drastically in a brief period of time • it provides workers with few incentives to work hard • there is a lot of uncertainty in terms of whether a person will have a job or where they will work • it is not designed to meet the wants of consumers

there is a lot of uncertainty in terms of whether a person will have a job or where they will work

Services are not counted as wealth because • prices for them are different all over • they are too easily produced • they are hard to measure • they are intangible

they are intangible

Unions are important in today's economy because

they played a major role in promoting legislation affecting wages today • they played a major role in promoting legislation affecting working conditions today • they have a membership of nearly 14.2 million people • all of the above (correct answer)

All of your alternative choices whenever making an economic decision are considered

trade offs

Social Security is an example of a • private sector expenditure • transfer payment • pork spending • subsidy

transfer payment

The Great Depression

turned popular opinion in favor of unions

Dishwashers, fast food workers, and lawn mowers would fall into what category of labor? • professional • skilled • unskilled • semiskilled

unskilled

A merger of corporations involved in different steps of manufacturing or marketing merge is known as a • conglomeration • vertical merger • multinational merger • horizontal merger

vertical merger

Having steak and potato for supper instead of bread and water is an example of expressing a what? (In terms of economics) • craving • utility • need • want

want

An example of perfect competition in the United States would be • soda industry • wheat farming • airline industry • All of these would be examples.

wheat farming

Horizontal mergers involve • 2 or more firms that produce different products • 2 or more firms in different countries • 2 or more firms that produce the same type of product • 2 or more firms involved in different steps of manufacturing and marketing

2 or more firms that produce the same type of product

During the height of the Great Depression the unemployment rate in the United States reached what? • 25% • 10% • 50% • 75%

25%

Opportunity Cost

A benefit, profit, or value of something that must be given up to acquire or achieve something else.

Oligopoly

A few producers that dominate a market

Corporation

Business organization that can have millions of owners and is closely monitored by the government

Which group of people ultimately determines the products that a free enterprise economy produces? • Consumers • Local government • Property owners • Congress

Consumers

Which of the following is most likely NOT a nonprofit organization? • Corner Grocery Store • Church • Neighborhood Association • Public School

Corner Grocery Store

This is the type of union with skilled workers who perform the same type of work. • Common Union • Craft (Trade) Union • None of the answers • Industrial Union

Craft (Trade) Union

Consumer Sovereignty

Role of consumer as ruler of the market when determining the types of goods and services produced

Competiton

Struggle among sellers to attract customers

The traditional theory of wage determination holds the differences in wage rates can be explained by • Labor Volatility • Supply and Demand • Regional Wage Differences • Collective Bargaining

Supply and Demand

Scarcity

The fundamental economic problem is what? Expenditures Term used for tax dollars spent by a government.

Inflation

The rise in the general level of prices

All of the following are reasons for declining union membership except • many employers have made a determined effort to keep unions out of their businesses • Many new workers are second-income earners who tend to accept lower wages • More women and teens entering the work place • Unions have stopped working for better conditions and wages

Unions have stopped working for better conditions and wages

Theory of Negotiated Wages

The wage theory that states the differences in wage rates are determined by collective bargaining

Production Possibilities Frontier

This graph shows the opportunity costs for countries based on using resources to make guns and butter

Budget Deficit

This happens when the government takes in less revenue than it spends

Budget Surplus

This happnes when the govenrment takes in more revenue than it spends

Economics

This science studies how people use limited resources to satisfy unlimited wants.

Alternative choices made by consumers in the marketplace

Trade offs

Proportional Tax

Type of tax that assigns the same percentage for every taxpayer, no matter how much they earn.

Regressive Tax

Type of tax that charges more tax for earning less money.

Progressive Tax

Type of tax that charges more taxes for earning more money

Who would you most likely find participating in a market economy? • a teenage girl deciding how to spend the extra money she earned working over time • a government official deciding how much wheat to plant this season • a worker deciding to leave his job early because the production quota has been met • a hunter deciding where to hunt to provide his family with a meal that night

a teenage girl deciding how to spend the extra money she earned working over time

Division of labor is a characteristic of • all man made products • entrepreneurship • assembly line production • home craft businesses

assembly line production

An economy at its production possibility frontier is operating • with slow economic growth • without division of labor • as a free enterprise economy • at full potential

at full potential

Manufactured goods needed to produce other goods are services are called

capital goods

Which of the following groups of workers formed one of the first unions? • auto workers • steel workers • cigar makers • plumbers

cigar makers

What group of workers usually have the lowest unemployment rate among the 4 listed?

college graduate

When a customer's need for a product is not urgent, demand tends to be • Inelastic • elastic • complementary • unit elastic

elastic

The largest category of spending for most local governments is • elementary and secondary education • public welfare • hospitals • police protection

elementary and secondary education

Why are entrepreneurs important in a market economy

entrepreneurs start new businesses

Which of the following is an advantage that makes sole proprietorships popular among new business owners? • sole proprietor does not get to decide what to do with profits • owner has more access to cash • more control of the business • shared liability

more control of the businesses

Which of the following is an example of discretionary spending? interest on the national debt • national defense • social security • Medicare

national defense