Review

Which of the following is an example of free trade?

A Mexican farmer sells a truckload of watermelons to a grocery store in Texas

Which factor will decrease the level of demand for a product?

A decrease in the number of buyers

What of the following is described in the above tax table?

A progressive income tax

Which of the following is the best example of the law of supply?

A sandwich shop increases the number of sandwiches when the price increases.

In economic terms, what is stock?

A shared, or part ownership, of a company

The most fundamental economic problem is

scarcity

what is the result of a price ceiling which is a price set below the equilibrium price?

shortage

How would you be using money if you were saving money in july to buy a new car in december?

store of value

Which of these best reflects how the government attempts to manage the economy through fiscal policy?

taxing and spending

Microeconomics focuses on all of the following EXCEPT

the effect of increasing the money supply on inflation

In which of the following economic systems are the factors of production privately owned?

Capitalism

Products that would be used in calculating GDP include

Cars manufactured in Tennessee at a factory owned by a Japanese automobile company

Which financial instrument is the most liquid?

Cash

There is a country in which the government owns all the industries, businesses, and farms. The government sets production and wages. The government provides all education, childcare, and medical care for all the people. What type of economy does this describe?

Command

In a typical business Cycle, what stage immediately follows a peak?

Contraction

What is the benefit of competition in a free market system?

Create a variety of new and cheaper products

T-Bone has enough money to buy either a pizza or to go to a movie with his friends. In economics, what is the choice that T-Bone "gives up" called?

Opportunity cost

If a government sets a maximum price for a good or service, what does it create?

Price ceiling

What is the most likely to happen when consumers want to buy more scooters than the store has available for sale?

Price of the scooter will increase

Your country is in a period of slow economic growth, rising unemployment, and businesses are not producing goods. Which of the following situations describes your country?

Recession

What would the Federal Reserve Bank (FED) do to fight inflation?

Slow the growth of the money supply

In a market economy, what determines the price and quantity of most goods produced?

Supply and demand

Which of the following people would be considered structurally unemployed?

Unemployed auto assembly line factory worker who was replaced with a robot

Who is considered the father of classical economics?

Adam Smith

If the Great Britain has comparative advantage over France in the production of cars, which of the following is true?

Britain should export cars to france

The official unemployment rate understates the unemployment level in the economy because the official unemployment rate

ignores underemployed and discouraged workers

Which of the following government actions is likely to stimulate the economy?

increase government spending and decrease income taxes

Sugar is an important input in the production of cookies. If the price of sugar decreases, what would we expect to happen to the supply of cookies?

increases

What happens when a country's money supply increases faster than the goods and services it produces?

inflation

Which of the following will lead to a decrease in a nation's money supply?

An increase in commercial bank reserve requirements

When you use cash to buy a large comb from Rudy's Tacos, how is your money functioning?

As a medium of exchange

Which of the following countries exhibit the characteristics of a command economy?

North Korea

In a mixed economy, what is the government's role?

Encourage competition among businesses

On a supply and demand graph, what is the point called at which quantity demanded equals quantity supplied?

Equilibrium

In economic terms, what are land, labor, capital and entrepreneurship?

Factors of production

Which of the following is NOT a reason for US corporations to outsource manufacturing jobs to Mexico and China?

Higher labor costs in China

A company decides to install more machines and lay off workers. Which economic question is addressed directly?

How to produce

Breakfast cereal in the United States is an example of which market structure?

Oligopoly

St. Louis Cardinals tickets are sold out every year in spite of the price increase. Therefore, St. Louis Cardinals tickets are which of the following?

Inelastic

In every economic system, what must people choose to do?

Make the best use of scarce resources

Which is an example of discretionary spending?

Military

In general, what type of economy does the United States have?

Mixed

Which of the following describes a market in which one firm controls the supply and pricing of a good or service?

Monopoly

Your gym shoes were designed in the United States and assembled in Asia. What type of a enterprise does this involve?

Multinational corporation

Which of the following situations would result in a government budget deficit?

The government spends more than it collects in taxes

An increase in which of the following would least likely increase labor productivity?

The labor force

A hurricane hit Florida and destroyed half of the orange crop. What would most likely happen to the orange market?

The price of oranges will increase

Which of these does the Groos Domestic Product (GDP) represent?

The total value of finished goods and services produced in a year

Which of the following is an economic goal of United States government policy?

To promote full employment

What is the economic system in which customs and religion of previous generations determine how the economy will use its scarce resources?

Traditional