Government and Economics Final Exam
Which of the following is a way to track your spending?
All of the above
Which choice or choices best describes the purpose of an emergency fund?
All of the above are good reasons to have an emergency fund.
What are the benefits of attending a local community college?
All of the above.
Secured loans are less costly than unsecured loans because _________.
All of these are true.
For most careers, which degree will most likely result in the highest lifetime earnings?
Bachelor's degree
___________ are good places to look to find your current expenses when building your budget.
Bank and credit statements
Which of the following goods would be considered for a complement to flashlights in the context of a demand for goods?
Batteries
Identify the potential factor of production shown in this photo.
Land
Your employer sends you a _______ form that tells you how much you've made and how much you've paid in taxes in the last year.
W-2
"The question remains: How many guns are necessary to maintain a high level of security for the U.S., and how much butter can the nation afford without hurting guns and vice versa?" - David Briceno, "'Guns vs. Butter,' America's Political Dilemma" In the quotation above, "butter" refers to
social welfare spending.
Living on campus while earning your degree can help you save money on...
transportation
Which of the following price/output pairs would appear on the supply schedule used to create the individual supply curve below?
$1.00/100
Which of the following is NOT a benefit of using a budget?
A budget can help you purchase anything you want.
What can insurance protect you from?
All of the above
What is a risk management strategy you could use to protect your home?
All of the above
Where should you look to find your current expenses when building your budget?
Bank and credit statements
What trade-off would a person make by choosing the option on the left?
Ease in favor of exercise
Bank statements, credit statements, and records of cash expenses help you to estimate your ________.
Expenses
Which of the following will NOT help you protect yourself from identity theft and fraud?
Expensive specialty or monitoring service.
All of the following may be a part of your benefits package available from your employer, except:
FICA
When setting a budget, you should consider...
Financial goals, current expenses, and income.
Which of the following is NOT an example of factors of production in the graphic?
Financial resources
Which of the following statements is true about education and lifetime earnings?
Generally, the more education you receive, the higher your lifetime earning will be.
What is the difference between gross and net pay?
Gross pay is before taxes are subtracted but net pay is before taxes are taken out.
Federally-funded grants require the student to...
Have financial need only.
Which of the following is a reason someone should get health insurance?
Health insurance protects you financially from medical emergencies.
What does the W-2 form tell you?
How much you've earned and how many taxes you've paid in the last year.
Which of the following would an entrepreneur do first when starting a new venture?
Identify an unmet want
A huge, week-long series of outdoor concerts is scheduled for early summer. Why will local stores LIKELY increase their supplies of consumer goods before the concert?
In response o the profit incentive
What is one way in which the economy of North Korea differs from the economy of Mexico?
Mexico's government is less involved than North Korea's government is.
What should be considered when setting a budget?
Needs, wants, and savings
What is one of the best ways to get reliable information about a product?
Search online reviews
Which mean household income level saw the greatest change relative to the others during this period?
Second 20%
How is an advertisement different from a comment from a regular consumer?
The advertisement is likely one-sided.
Study the demand curves below. If the price of a slice of pizza decreased from $4.00 to $2.00, how would that change the number of slices of pizza demanded each day by the market?
The demand would increase by 100 slices per day.
Which of the following causes a production possibilities frontier?
The economy grows.
Dimitri's counselor told him that post secondary education can be expensive but can pay off in the long run, what does that mean?
The salary you will earn with a degree will pay back the cost of the college over your career.
What is the best reason for why someone would want to lease a house instead of buy one?
They are planning on living there for a short period of time.
Which of the following is TRUE regarding unexpected expenses?
They should be planned for
A savings account that compounds interest daily will earn a higher return than a savings account that pays simple interest daily.
True
Generally, the more education you receive, the higher your lifetime earnings will be.
True
When considering a job offer, you should consider how much you're being paid and any other employee benefits before you accept the offer.
True
The price of a single item within a group of items is known as the ______________ of the item.
Unit price
What are two things that a command economy fails to provide consumers?
Variety of goods and responsive prices
Earning a degree can be expensive but which example shows why it might be worth it?
You are more likely to earn more money over your lifetime than if you did not have a degree.
What is a consequence of not having health insurance?
You must pay all costs for health care and medical emergencies.
Choose the statement that is true about health insurance.
You should always have health insurance, regardless of your circumstances.
A point on a production possibilities frontier represents
a point at which an economy is using all resources most productively.
The clothing shown in the photograph is BEST described as an example of
a want.
When you are deciding what to buy, you should not...
assume that buying the cheapest item is the smartest choice.
Something people buy to protect themselves from losing a lot of money in the event something happens to them or their property is known as...
insurance.
Insurance that will pay for injury to another driver and/or damage to their car if you are in an accident is called...
liability insurance.
To maintain a good credit score you must ______.
manage your debt wisely.
What is net pay?
the amount of money you're paid after all taxes and deductions are taken out of your paycheck.
Based on this table, each time this country moves more resources away from producing shoes towards growing watermelons,
the cost of growing additional watermelons increases.
Generally, _____________ you receive, the higher your lifetime earnings will be.
the more education
Look at the above information from a supply and demand schedule. To restore this market to equilibrium, the quantity demanded and quantity supplied would change so that they were both...
...between 170 and 225.
in a market-based economy, consumers rely on prices to help them...
...choose among similar products.
This photo shows a factory with scrubbers that the government requires to clean power-plant emissions. This photo represents government activity that is likely to...
...decrease supply by increasing cost of production.
Based on what you know about production possibilities, what would you expect the numbers in the second column of this table to be (reading from the top to bottom)?
0; 200; 350; 450; 500; 525
Which is NOT considered an additional cost beyond tuition for higher education?
Academic counseling
Which of the following is NOT a common feature of a financial institution?
Access to investment advice
Which of the following is NOT a common feature of a financial institution?
Access to investment products
What should you NOT use a loan to purchase?
Airline tickets to your dream vacation
Which item is important to consider when selecting a credit card?
Both APR and fees
Which is not an example of a risk management strategy?
Buying a new car
Which of the following is an example of how a firm can resolve the problem of diminishing marginal returns of labor?
By increasing its physical capital.
Which payment option is not accepted online?
Cash
Which of the following financial institutions typically have the highest fees?
Check cashing and payday loan companies
Savings accounts typically offer more interest than what type of account?
Checking account
Which type of bank account is best for everyday transactions?
Checking account
Which type of bank account typically offers the least (if any) interest?
Checking account
What two qualities that work together to regulate the marketplace are present in this photo of two cellphone service providers?
Competition and self-interest
How does the government pay for roads, schools, and emergency services?
Everyone must file federal taxes, but each state has different tax laws.
Why might preparing taxes be different for people living in different states?
Everyone must file federal taxes, but each state has different tax laws.
Which of the following should NOT be considered when setting a current budget?
Future income
What do people purchase as a form of risk management to protect themselves from losing a lot of money in the event something happens to them or their property?
Insurance
How can insurance protect you from financial loss?
Insurance can cover you or your property in case of an accident, theft, or another unpredictable event.
Which of the following is NOT a common feature of a financial institution?
Investment trading
All of the following are true about why it is important to complete the Free Application for Federal Student Aid (FAFSA) process EXCEPT:
It allows you to be eligible for early admission.
Tax preparation software can help prepare and file your taxes by _________.
Posing questions to collect necessary information
Which of these additional costs will most likely be the most expensive?
Room and board
What trade-off is shown in this cartoon?
Size of car vs. fuel efficiency
Which of the following is NOT an advantage of owning a car?
Smaller down and monthly payments than leasing a car
How do socialism and communism differ when it comes to government systems?
Socialism can be democratic, while communism is authoritarian.
A new variety of apples from imported apple trees has proved popular with American consumers. What challenge does this represent to the apple growers and their desire to take advantage of this development?
Supply of fruits such as apples is inelastic in the short run.
What can affect whether a public or private university is affordable?
The amount of financial aid that they offer.
What would likely happen to the market for fruits like these as a result of a severe frost in the south?
The market would be thrown into disequilibrium.
Making the choice to spend money on post secondary education pays off in the long run because:
The salary you will earn with a degree will pay back the cost of the college over your career.
Why do you think there were long lines of cars in this photo from 1973?
There was a scarcity of gas.
"Whether we're talking about roads or bridges or mass transit, whether we're talking about canals and waterways, sewage and water facilities, whether we're talking about broadband, or we're talking about the grid to transmit electricity, whether we're talking about schools, an investment in infrastructure that serves the needs of our children and their education... these infrastructure investments offer our nation job-creating opportunities to reinvigorate the American economy." -Nancy Pelosi, Speaker of the House, Press Release, March 11, 2008 Government-built infrastructure is a public good. Which of the following BEST paraphrases the intent of this press release by a government official?
To persuade people that the benefits of repairing infrastructure outweigh the costs
Consider this diagram, which is comparing two different systems of production. Which of the following is most likely depicted in the top half of this diagram?
Traditional economy
When are loans a good option to use?
When paying for higher education
What is a benefit of having a good credit score?
When you need a loan, you'll have more loan offers to pick from
To conduct a cost/benefit analysis, a sensible person would MOST LIKELY
compare marginal costs to marginal benefits.
State and local ballot referendums allow American Citizens to
create government economic policies.
To file your federal and state taxes you ____________
must prepare different forms for each type of government (if your state requires it).
The amount of money you're paid, after all taxes and deductions are taken out of your paycheck is called ________.
net pay
Paying only the minimum balance on your credit card can lead to...
paying more interest.
Recommended methods to protect yourself from identity theft and fraud include_______.
placing a credit freeze with the credit bureaus.
Wearing a seat belt, not texting when driving, and driving carefully are all examples of...
risk management strategies.
A deductible is paid by...
the policy holder.
If a demand curve shifted to the right on this graph, which of the following could be the new equilibrium point?
$200
Which of the following represents an under-utilization of the economic resources shown here?
10 million shoes, 15 million tons of watermelons
In what year was the efficiency of the U.S. economy at its lowest point?
2009
Which is a tax-free savings account that can only used for educational expenses?
A 529 plan
After considering her different options, Amelia decides to buy fat-free ice cream. What is the benefit?
A dessert that is relatively low in calories
Which of the following is NOT a feature that makes a secured loan less costly than an unsecured loan?
A high interest rate
Using a loan could help with the purchase of which of the following?
A house
Why is using a budget beneficial?
All of the above
Having a great credit score will make it easier for you to get into a better educational institution.
False
How much you're being paid is the only thing you need to consider when considering a job offer.
False
There is no relationship between the level of education received and lifetime earnings.
False
When considering a job offer, you should only consider how much you're being paid before you accept the offer.
False
Your financial institution can't help you if there is a mistake on your bank account statement.
False
Andrew doesn't want to spend a lot of money on student loans, and does not qualify for grants. What is his best option for affording a Bachelor's Degree?
He can attend the local community college whose courses transfer to the public four-year college
Ashley started taking classes at a local community college and had to switch her job from full time to part time, so she makes less money. How would this development likely affect the graphs below?
Her individual demand curve would shift to the left.
Which of the following is NOT a good way to track your spending?
In your head
Which of the following BEST describes the U.S. free enterprise system?
Individual or corporate ownership of capital goods
This flowchart shows the process for creating clothing in a centrally planned economy. In a market economy, which of the following would replace "Top Planners" as the primary decision-makers about what to produce?
Owners of firms
Which of the following is NOT a possible tax or deduction that could be withdrawn from your paycheck?
Sales tax
Which of the following is NOT a possible tax or deduction that could show up on your paycheck?
Sales tax
Which of the following is true about scarcity?
Scarcity affects all societies.
Why do U.S. economic policies seek to achieve the goal of maximum employment?
When more people work, the economy is more productive and the standard of living rises.
What is NOT a benefit of having a good credit score?
You'll get accepted to better educations institutions.
If there is an issue with your bank statement or account balance, who should you contact to resolve the issue?
Your bank
When filing an insurance claim, the policyholder must pay a ________________, which is the amount you owe before insurance will cover the rest of the bill.
deductible
If you get into a car accident, your __________ may increase because you will be considered riskier for insurance companies to cover.
insurance premium
To save money, Taylor decided not to go to a concert where her favorite musician was performing. What was the opportunity cost of that decision?
Having fun at the concert
Almond Pest Destroys 50 Percent of Crop Prices Expected to Double For a consumer who loves almonds but has a limited budget, what is this new headline likely to trigger?
Income effect leading to lower demand for several goods
Earning a degree can be expensive but which example shows why it might be worth it?
Individuals with a bachelor's degree typically earn a higher annual salary than those without one.
What does this diagram imply about the value of technological innovations?
Innovations in technology increase economic growth.
Why has the United States space program been operated as a public good?
It is impractical to exclude non-payers from enjoying the scientific and technological benefits of the space program.
According to this diagram, in what way does the government behave like a household in a mixed economy?
It purchases goods and services from firms.
In the example shown here, what is the marginal cost of changing from two hours of studying to three hours of studying?
Losing an hour of sleep
What is the opportunity cost of not going to college?
Low unemployment
Which example shows an advantage of owning a car over leasing one?
No restrictions on the number of miles to drive and the ability to customize, or make changes, to the car.
What is the marginal product of labor that results from hiring the seventh worker?
One beanbag per hour
At the council meeting last night, the Drover Company demanded that the town enforce its private property laws. Last year, the company built a bridge across Snake Stream to make it easier for employees to each its offices. "The bridge," company owner Celia Drover said, "is private." She went on to complain that many non-employees have been using the bridge, rather than drive seven miles south to cross the stream on a state-owned bridge. Which of the following best describes the use of the private bridge by the public?
The free-rider problem
According to this table, which of the following explains why the owner of the beanbag factory would be wiling to accept an increase in variable cost from $63 per hour to $82 per hour?
The increase will make possible an increase in the factory's profit.
How is a post from a social media influencer different than a comment from a regular consumer?
The influencer is paid to post the product.
Government has the power to place restrictions on the use of business and individual property. What restriction does this excerpt from the Fifth Amendment directly address? "No person shall be... deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." - Amendment to the Constitution of the United States
The power to take property through eminent domain
Suppose a new commercial development is built, leading to the opening of several new fast-food restaurants in a market. Which of the following is the likely result of such a development?
The supply curve shifts to the right.
Which of the following statements about check cashing companies is FALSE?
They charge low fees
Which of the following statements about check cashing companies is TRUE?
They have limited operating hours during the day.
Which of the following is a function of households in the market economy?
They supply firms with the factors of production
Which of the following statements is true about taxes?
Taxes pay for schools, first responders, and roads.
Which of the following best describes equilibrium?
A point that moves continuously in response to market changes in quantity supplied and demanded
Making a good purchasing decision requires __________.
All of the above
Which of the following is a benefit of using a budget?
All of the above
Which of the following is true about the Free Application for Federal Student Aid (FAFSA)?
All of the above
Which of the following should you consider when setting a budget?
All of the above
If you used this schedule to graph the demand for watermelons, where would the equilibrium point appear?
At a price of $3.00 and a quantity supplied of 200
Which payment option could have interest charged to you?
Credit card
Which payment option takes money out of your bank immediately?
Debit card
Healthcare, paid time off, disability insurance, and matching contributions to a retirement account are all types of _________ available from your employer.
Deductions
Which of the following describes the relative elasticity demand for the product shown in a period of economic change?
Demand is inelastic because it is a low-cost necessity.
The owner of a hamburger stand is thinking about raising the price of a hamburger from $3.00 to $5.00. Based on the table, what can the owner expect about demand in that case?
Demand would be elastic.
Which economic goal does this exchange at an outdoor food stand BEST represent?
Economic freedom
What strategy of modern thinking is Adam Smith referring to in this statement? "To take an example, therefore, from a very fitting manufacture... the trade of the pin-maker... One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on is a peculiar business, to whiten the pin is another;... the important business of making a pin is, in this manner, divided into about eighteen distinct operations." - Adam Smith, The Wealth of Nations
Specialization
"Government regulations impose an enormous burden on large and small businesses in America, discourage productivity, and contribute substantially to our current economic woes." - President Roland Reagan, January 22, 1981 What would President Reagan's economic policy MOST LIKELY be concerning regulations?
To cut back on the number of regulations
What is the purpose of the W-4 form?
To inform your employer of how much federal income tax to withhold from your paychecks.