Economics semester test

In witch type or types of economy do businesses compete for profit

Market economy and mixed market economy

In the United States, prices are set by

Markets

Capitalism

System where private citizens own means of production

Witch of the following is a benefit of credit

You can but things you want before you can save the entire purchase price

What are your drawbacks of credit

You will end up paying more that what the items costs due to interest. It can cause financial debt if not used responsibly

a nation is said to have______ when the value of its exports is greater than the value of its imports

a positive balance of trade

NAFTA created a protectionist zone in Europe

false

a countries with on going trade deficits will see the value of its currency rise

false

a country with more imports than exports has a trade surplus

false

most countries with a high per capita GDP have a command economy

false

trade barriers makes prices lower for U.S. consumers

false

protectionism is the use of tatics that make imported goods _____ than domestic goods

more expensive

do teams have to liquidate portfolios at end of trading session

no

will transactions entered with a limit price be held past the initial posting

no

in an end of day game witch days closing price will a trade entered on a friday at 630 will receive

price of monday

many developing countries try to protect domestic jobs by using trade barriers

true

relying on a single export makes a nations economy vulnerable

true

does the stock market game pay dividends

yes

Consumers participates only in the factor market and in the product market

True

GDP per capita is calculated by dividing a country's GDP by its population

True

Labor is one of the three types of resources indentified by economist

True

Many Americans work and save money so they can invest their money in property ownership

True

Price in the US are est. by supply and demand in markets

True

Prices play an important role in a market economy

True

Supply is affected by the number of suppliers and the cost of production

True

The US has the worlds largest economy

True

The government borrows money from citizens by selling them bonds

True

The government can act as a consumer in the product market

True

Using a credit is the same as borrowing money

True

When the marginal benefit is higher than the marginal cost, a business will decide in favor of a project

True

When the price of bananas goes down, the results will be greater demand or bananas

True

When you apply for credit, the lender checks your credit rating

True

impulse buying

Unplanned, emotional decision to buy something

Exchange rate

Value of one currency in terms of another currency

Economist refer to the activity that takes place in the market as

Voluntary change

private property rights

Freedom to own and use property at will

Stock

Shares of company held by an invested

Typically, both resources and wants are limited

False

Interest

Fee charged for borrowing money

what is the annual % rate interest rate that cash balances will earn

0.75%

what is the broker fee on all trades

1%

what is the minimum amount of shares for a buy order

10 shares

excludding interest earned, how much cash does each team begin the stock market game with

100,000

annual % rate charged to teams with a negative cash balance

7%

How does a bond differ from a stock

A bond is a loan to a company by a company a stock is you buying a share of the company

What 2 things are needed for economic growth

Additional resources increase productivity

APR (Annual Percentage Rate)

Annual cost of credit

Being a good consumer mean considering the effects of purchasing decisions

Avoid impulse buying, prioritize wants, think about opportunity cost

What are four sources of credit

Bank stores credit union and finance companies

The US government encourages competition between sellers by

Banning monopolies

What are the four sectors that work in the US economy

Business, consumer, foreign, and government

Witch of the following is most likely to have the highest rate of return

CD

A delivery truck is an ex of

Capital

Witch of the following words describe the flow of economic activity in a market system

Circular

What are the different types of economics discussed in this chapter

Command, traditional, market, and mixed

Expenses that do not change no matter how much a business produces are called

Fixed cost

Specialization helps improve productivity because it allows businesses to

Focus on what they do best

dividend

Company earning paid to shareholders

Using advertising carefully, comparison shopping, and reporting faulty products are al ex of

Consumer responsibility

A department store is trying to decide whether to expand its building to add a shoe department. To make a decision, the stores owner would compare

Cost and revenue resulting from the expansion

why do countrys trade with one another, and how do trade barriers harm economies

Countries don't have what they want and need gain comparative advantage

Comparative advantage

Country's ability to produce a good more efficiently than another country

Balance of trade

Difference between the value of a country's import and exports

Witch business strategy is demonstrated by the factory supervisor who breaks a large job into small, separate jobs

Division of labor

Free enterprise

Economic system where individuals an businesss make economic decisions

scarcity affects the global community by

Encouraging international trade

A business that makes a benefit-cost analysis to choose between projects should choose the project with the lower benefit cost number

False

As the price of a good goes up, producers tend to supply less

False

Choosing to spend a Sunday afternoon in the park playing soccer does not have an opportunity Cost

False

Factories are link between consumers and businesses

False

Someone may buy a generic good because it costs more than other goods

False

The business sector participated only in the factor market

False

The riskiest investment is a mutual fund

False

in a command economy how are the economic questions answered

Government planners

Witch sector uses both taxes and borrowing to operate

Government sector

Laissez- faire economics

Government should not interfere in market

developed country

Had a high standard of living

developing country

Has a low GDP per capita

mixed economy

Has characteristics of more than one type of economy

profit motive

Incentive to make money

Disposable income

Income after all taxes on it are paid off

The three basic parts of a budget are

Income expenses balances

discretionary income

Income left witch you can spend any way you choose

Economic growth

Increase in a country's output (GDP)

Bond

Interest- bearing certificate of agreement between a borrower and a lender

Mutual fund

Investment company that's sells stocks itself used the proceeds to buy other stock and bonds

a country may benifit from having a low currency value

It can help the country increase its exports

One disadvantage of a certificate of deposit is that

It has a high penalty for early withdrawal

What is the purpose of GDP

It's a measure of economic growth

What else would you have to know about a nation to tell weather GDP is an accurate measure in its wealth

It's standard of living, both for citizens and the nation as a whole

Standard of living

Material well-being of individuals or nations

Loan

Money lent at interest

What are the factors of production

Number of consumers, consumers preference, and consumer income

Demand refers to the amount of a good or service that

People are willing and able to buy at given price

What happens when the same amount of input, used in the same amount of time, produced a greater amount of output

Productivity goes up

Witch of the following is one of the steps to making a budget

Record everything that you earn and it's source

Under the bill of rights consumers have the right to

Safety redress choice

An opportunity cost is

The next best option after the one chosen

Total cost are the sums of

The variable cost plus the fixed cost

what does the world trade organization do

They protect against any bad trade, helps develop countries trying to develop

What are the three basic economic questions all societies must answer

To whom, to what, and how

Growth domestic product

Total value of all the final products sold in a year

If Marta wakes up early, she can have French toast for breakfast. If she sleeps and extra fifteen minutes, she will only have time for cold cereal. She decides to sleep in an extra fifteen minutes. Marta is making a

Trade-off decision

Privitization

Transferring government-owned businesses to citizens

A traditional economy is generally not very productive

True

A warranty protects a consumer because it promises to replace or repair faulty products

True

APR is not a consideration in determining a persons credit rating

True

countries who have free trade agreement with each other have no

tariffs on one another goods

what is one reason a team will not successfully appear on rankings

they have not successfully first trade