Economics Final True/False
True
A demand curve illustrates the quantity demanded at all possible prices at a given time
False
A demand schedule is created from a demand curve
False
A desire to buy a product is the only requirement needed for demand to exist
True
An increase in output as each new input is added as in the addition of a worker describe stage one of the stages of production
True
An increase in the cost of inputs can cause the supply curve to shift to the left
True
Benjamin Franklin and Alexander Hamilton devised the monetary system used in the United States today
True
Capitalism is a competitive economic system in which private citizens own the factors of production
True
Cooperatives can be organized to help consumers, provide services, or help producers
True
Despite the Federal Reserve System, massive banking failures occurred during the Great Depression
True
Economic growth occurs when a nations total output of goods and services increases over time
False
Economic interdependence limits a nations growth and usually reduces the efficiency of production
True
Economic products consist of both goods and services that are useful, relatively scarce, and transferable to others
True
Fiat money has no inherent worth
True
Fixed cost is the cost of a business incurs even if there are no employees and no production takes place
False
Full unemployment is reached when the unemployment rate drops below 7 percent
True
Half of all savings and loan associations went out of business during the 1980s
True
In economics, land refers to the natural resources needed for production, such as forests, minerals, and climate
True
Labor unions use collective bargaining to negotiate job-related issues with management
True
Limited liability is one characteristic of the corporate form of business organizations
True
Many schools, medical care facilities, and churches operate as nonprofit organizations
True
Marginal analysis compares the additional benefits of an action to its additional cost
False
One advantage of a corporation is the ease of obtaining a charter
True
One disadvantage of a general partnership is each partners responsibility for the acts of all other partners
True
People form partnerships because it often improves a businesses management and can usually attract capital more easily than proprietorships
True
Preferred stock represents the non voting ownership of a corporation
True
Productivity will decrease if workers are unmotivated
False
Social security is an example of governments direct role in the economy
False
Sole proprietorships must request a charter from the state in which they are organized
False
Structural unemployment is usually temporary
False
The Law of Variable Proportions states that in the short run, output will not change as one production input is varied while the others remain constant
True
The United States has a modified private enterprise economy
False
The circular flow of economic activity describes an economy that is free of markets
True
The entrepreneur organizes land, capital, and labor for production in hopes of earning a profit
False
The four factors of production are land, capital, labor, and financing
False
The introduction of technology usually has no effect on supply
True
The law of demand states that more of a product will be purchased at low prices than at high prices
False
The law of supply states that suppliers will normally offer less for sale at higher prices and more for sale at lower prices
True
The number of items sold multiplied by the average price of each item yields the total revenue of a business
False
The profit motive states that the consumer decides WHAT goods and services to produce
True
The theory of production deals with the relationship between the factors of production and the output of goods and services
True
The unemployment rate does not take into account the number of part-time workers who want to have full-time jobs
True
The unemployment rate is calculated by dividing the number of unemployed persons by the total number of persons in the civilian labor force
False
The worst downturn of the business cycle in the United States occurred during the Cold War
True
Time is an opportunity cost when a manufacturer assigns workers to one task rather than to another
False
To be a successful medium of exchange money must exist in an unlimited supply
False
Voluntary exchange is a characteristic of command economics
True
When manufactured goods are used to produce other goods and services, they are called capital goods
False
When more suppliers enter the market, the market supply will typically decline