GAVS ECON EXAM

How are goods and services bought and sold on the barter system?

People trade goods and services they have for those they want.

A few years ago tax payers received a tax rebate check from the Internal Revenue Services? These funds were distributed because

the government hoped to stimulate economic growth.

Consumer sovereignty refers to the

the idea that the market responds and provides the goods and services consumers are willing to purchase.

In Economic terms, scarcity can best be defined as

the inability to satisfy unlimited human wants with limited available resources.

In economic terms, opportunity cost is defined as

the item that is given up when making a choice; the next best alternative.

Increasing worker productivity involves

getting more output with fewer inputs.

Which step in the Paced Decision Making Process belongs in D on this graphic?

Identify the alternative you selected as your decision.

Which tax accounts for more than half of government revenue according to this graph?

Income Tax

Which term belongs in the blank rectangle in the diagram?

goods and services

Economic wants can best be defined as

goods and services that people would like to obtain.

This formula is used to calculate GDP? C+I+G+X = GDP The G stands for

government

Mimimum wage laws, food labeling requirements, and work place safety legislation are examples of

government regulation

The financial and mortgage crises of 2008 in the United States led to

greater regulation of banking and and investment firms in the US.

Granting consumers credit

has allowed business and the GDP to grow.

One advantage of a corporation is that it

has limited liability.

Farmers in Mexico protest that cheaper corn from the US is driving them out of business. They are most likely to ask for

higher tariffs on corn imported from the US.

Economics is best defined as the study of

how businesses, individuals, and governments allocate scarce resources.

An important clue to the type of market structure a business falls in is

how competitive it is.

Kelly has an absolute advantage over Karen in

in mowing the lawn.

In the circular flow model where do households earn their income?

in the factor market

When industry utilizes new technology it generally leads to

increased productivity.

Because military goods are relatively more expensive than civilian goods, trade offs towards civilian goods involve __________opportunity costs.

increasing

Decreasing taxes and increasing spending would have the effect of

increasing aggregate demand (AD).

Which of the following is not one of the major economic goals for countries?

inflation

Stagflation is a condition that is difficult to combat because the country experiences _________________________ at the same time.

inflation and recession

The main difference between nominal and real GDP is that real GDP is adjusted for

inflation rate.

The circular flow model demonstrates the ___________of our economy.

interdependence

What is the Federal Reserve Boards' primary source of income?

interest from government bonds

When making your college plans, you and your parents may complete a form called FAFSA. This form

is required for students seeking any federal financial aid or loans.

Examine the credit card bill. This account

is under the credit limit.

What happens to the velocity of money, the rate at which it changes hands, during a recession?

it decreases

A word that means the same as human capital is

labor

Productivity can be measured by the number of inputs to make a product. Inputs are

land, labor, and capital.

Companies issue stock to get money for various things, which may include:

launching new products, paying off debt, enlarging facilities or building new ones, expanding into new markets or regions.

When the Fed raises the fractional reserve rate

less funds become available for lending by banks.

In this graph the arrow is pointing to

macroeconomic equilibrium

Economically speaking, increased trade has

made countries more interdependent.

The scene in this photograph is most likely taking place in a _________ economy.

market

Which economic system encourages entrepreneurship?

market

If a market structure has perfect competition, prices are determined by

market forces.

Student loans

may allow a student to afford an education and increase life long earning power.

If a social networking company called "Linkedbook" buys "My Face" they have

merged.

Because athletic shoes compete with product differentiation, _______________market structure applies to this industry.

monopolistic competition

Under which market structure do businesses have a chance for the largest profit to price ratio?

monopoly

Producers have the most price and quality setting power in a(n)_______________.

monopoly.

If the factory is producing at point E

more tennis balls and motorcycles could be produced.

In economics terms, incentives are defined as

motivations that influence people's choices and decisions.

What condition do these lines from a Rolling Stones popular song refer to? "You can't always get what you want You can't always get what you want You can't always get what you want But if you try sometimes well you might find You get what you need"

scarcity

Match the economic systems with their advantages. 1. Command 2. Traditional 3. Mixed Market 4. Market

1. Changes can happen quickly because the government can decree them. 2. Everyone knows their role and has a position in the economy. 3. Change happens gradually and government regulations protect consumers and producers from extremes. 4. Change happens gradually according to people's choices and decisions.

What is the equilibrium price for milk as shown on this graph?

$3

Based on this graph, which price and quantity is correct in this market?

$8, 8

For businessess to be profitable and for nations to prosper, they must have high productivity. Productivity is

the amount of goods or services produced with inputs.

Match the terms relating to "money and banking" with their definitions. 1. fiat money 2. commodity money 3. fractional reserve 4. medium of exchange

1. Currency that is not backed by silver or gold(specie) and is recognized as money because people have faith in the government that created it 2. items such as tea, furs, and tobacco that have been used as money in the past. 3. the percentage of deposits that banks have to keep on hand and cannot lend out 4. anything that is accepted and recognized as money

Match the social goal with the appropriate example. 1. Economic freedom 2. Economic security 3. Economic growth 4. Full employment 5. Economic efficiency

1. Individuals have choices in career, business, and education. 2. Medicaid pays for healthcare for children living in poverty. 3. The government approved research grants for innovative technology. 4. The Jobs Act will encourage businesses to hire more workers. 5. The forestry industry is required to replant trees when cutting down trees for timber.

Match the term with the correct example. 1. Inelastic demand 2. Elastic demand

1. Insulin 2. Jewelry

Match the terms with their definitions. 1. What is given up when one more unit is produced. Ex additional utility charges due to keeping the store open later. 2. Sum of the fixed and variable costs, the cost of production. Ex. the total monthly operating expenses for a store or factory. 3. A cost that changes when production increases or decreases. Ex shipping costs 4. A cost that does not vary based on production or sales. Ex. Rent 5. The money left over after all of the expenses are paid.

1. Marginal cost 2. Total cost 3. Variable cost 4. Fixed cost 5. Profit

Match the economic systems with the countries that have that type of system. 1. Market 2. Mixed Market 3. Traditional 4. Command

1. New Zealand 2. United States 3. Inuit 4. North Korea

Match the demand shifter with the correct example. 1. When you go to the store pick up a box of cereal and remember to get some milk and bananas too. 2. Have you noticed the many advertisements for goods that seniors want. There are so many commercials for canes, walkers, depends, and arthritis medication. There must be a lot of aging baby boomers out there. 3. The Weather Channel foretasted snow for Atlanta and North Georgia. I decided to stop at the store for supplies. The supermarket was totally out of bread, milk, and flash lights. 4. With the economy recovering and Wall St having a great year, the price of housing in Lower Manhattan has skyrocketed. 5. The model looks great in those skinny jeans. I think I will store the bell bottoms and get some new jeans. 6. We were going to have steak for our cook out but the price has gone sky high. We will have chicken again.

1. Number of Consumers 2. Consumer Tastes 3. Expectations 4. Complement 5. Consumer Income 6. Substitute

Match the functions of money with the appropriate term. 1. Money holds purchasing power until the buyer needs it. 2. Money is accepted by all parties as payment for goods and services. 3. Money can be used to express worth in terms that people can understand.

1. store of value 2. median of exchange 3. unit of account

Match the Circular Flow Model terms with their definitions. 1. Producers sell and consumers buy goods and services 2. A person or group that produces goods and services 3. A person or group of individuals that occupy a housing unit 4. Produced for sale in the product market and voluntarily exchanged 5. Households provide land, labor, and capital to producers for a return on their labor or investment

1. Product Market 2. Business 3. Household 4. Goods and Services 5. Factor Market

Match the term with its definition. 1. Absolute Advantage 2. Opportunity Cost 3. Comparative Advantage 4. Specialization

1. Refers to a country's ability to produce a certain good more efficiently than another country 2. Refers to what you sacrifice in making an economic choice. In this instance, it refers to the value of the goods you sacrifice in deciding to produce one good instead of another. 3. Refers to a country's ability to produce a particular good with a lower opportunity cost than another country 4. Refers to a country's decision to produce a certain good or list of goods because of the advantages it possesses in their production

Match the terms in the left column with their description in the right hand column. 1. Household 2. Businesses

1. Sells Factors of Production 2. Buys Factors of Production

Match the term with the correct definition. 1. A second supply curve has been introduced into the market due to a change in the market place other than price. 2. the amount producers will offer for sale at any given price 3. a graph showing the quantities supplied at every price 4. a direct relationship; suppliers offer more for sale at higher prices 5. a table listing the quantities supplied at various prices

1. Supply change or shift 2. Quantity Supplied 3. Supply Curve 4. Law of Supply 5. Supply schedule

Match the example with the correct term. 1. The call center instituted an automated answering and redirect phone system and can now serve more customers. 2. New deposits of natural gas have been discovered in Pennsylvania. 3. The company decided to shift production from golf balls to tennis balls due to increasing popularity of tennis as a recreational sport. 4. The government is backing low interest loans for businesses developing solar energy. 5. Following Hurricane Katrina, Georgians experienced fuel shortages. 6. Lately it seems that frozen yogurt shops are popping up in every neighborhood shopping center.

1. Technology innovation 2. Resources 3. Other Goods 4. Taxes and subsidies 5. Natural disasters 6. Number of supplies

Match the term with its description. 1. Command Economy 2. Market Economy 3. Traditional  Economy 4. Mixed Market Economy

1. The government controls the means of production, property, and makes all decisions about production and consumption. 2. Producers and consumers make all economic decisions and the factors of production are privately owned 3. Roles are handed down from generation to generation and the basic questions are answered as they have been since the distant past. 4. Many economic decisions are made  by individuals. But the government also plays a role in the allocation and distribution of resources.

Match the terms with their descriptions. 1. Diminishing Marginal Utility 2. Total Utility 3. Income Effect 4. Substitution Effect 5. Marginal Utility

1. The more we get of an item, the less useful the next unit of that item is. 2. The total satisfaction from consuming some commodity 3. There is a change in quantity demanded as price changes. This means that as something gets cheaper, we have extra more money left over which means we might buy more of that item. 4. There is a change in quantity demanded because of the change in relative price. This means that as something become more expensive, you are more likely to buy a different good that satisfies the need or want. 5. The extra usefulness or satisfaction that a person gets from getting one more unit of an item.

Match the economic systems with their disadvantages. 1. Traditional 2. Command 3. Mixed Market 4. Market

1. This system discourages progress and modernization. 2. Workers frequently lack motivation and the quality of work suffers as they have no say in their economy. 3. Government programs offer some protection to workers in need. 4. Workers who are not as productive or skilled are at a disadvantage.

Match the credit related terms with their descriptions. 1. annual fee 2. credit limit 3. APR 4. grace period 5. late penalty

1. a fee charged each year for acquiring the credit card 2. the maximum amount of money that can be charged on a particular credit card 3. the cost of credit usually compounded daily 4. an interest free period between the date of purchase and the due date of the monthly bill 5. a fee for paying the credit card balance or minimum payment past the due date

Match the market structure with its description. 1. Oligopoly 2. Perfect Competition 3. Monopoly 4. Monopolistic Competition

1. a few very large companies dominate the market making similar but not identical products 2. a market that has many producers of identical products who compete on price 3. a market where there is only one producer of a good or service 4. many producers make similar but not identical products

Match the investment with its description. 1. mutual funds 2. stocks 3. certificates of deposits 4. bonds

1. a group of stocks and or bonds selected and managed by a professional manager sometimes preferred by professionals and workers too busy to manage their investments 2. shares or part ownership in a corporation or a company 3. a timed deposit that pays higher interest than a savings account but invokes penalties for early withdrawal 4. securities that lend money to government or corporations and pay interest

Before issuing a credit card or making a loan, a lender will establish the credit worthiness of a borrower according to the 3 C's. Match the C's with their descriptions. 1. Lenders may get employer verification or ask for income tax returns to determine if the borrower has sufficient income to pay the bill or loan. They will want to know how long the borrower has been at the present employment or in the business. 2. Lenders will examine credit reports and look at bill paying history to assess whether the person is reliable and dependable. They look for a high credit score. 3. Lenders want to know if borrowers have valuable assets such as real estate or investments that can be used to pay off the loan if the borrower loses his/her job or source of income.

1. capacity 2. character 3. collateral

Match the type of unemployment with its example. 1. Jackie lost her job during the recession when the appliance store where she worked went out of business. 2. Tina lost her job as a stenographer when personal computers arrived on the scene. Her boss word processed his own memos. 3. Justin quit his job as a store manager following a disagreement with the regional manager. He planned to take a vacation and then apply to similar companies. 4. Brian works as a ski instructor in Vermont. He has to save money for the summer months.

1. cyclical 2. structural 3. frictional 4. seasonal

Match the type of stock with its description. 1. growth 2. common 3. preferred 4. income

1. have earnings growing at a faster rate than the market average. They rarely pay dividends and investors buy them in the hope of capital appreciation. A start-up technology company is likely to be a growth stock. 2. stock entitles owners to vote at shareholder meetings and receive dividends. 3. stockholders usually don't have voting rights but they receive dividend payments before common stockholders do, and have priority over common stockholders if the company goes bankrupt and its assets are liquidated. 4. pay dividends consistently. Investors buy them for the income they generate. An established utility company is likely to be an income stock.

Match the factors of production with their examples. 1. logger (person who cuts down trees) 2. The owner of the company 3. trees 4. truck

1. labor 2. entrepreneur 3. land 4. capital

Match the business form with its definition. 1. Corporation 2. Sole Proprietorship 3. Partnership 4. Limited Partnership

1. owned by shareholders and governed by a board of directors 2. business owned and managed by one individual 3. business owned and managed by two or more individuals who share profits and responsibilities 4. one or more of the partners contributes capital and shares in the profits, but does not share in the day to day operations

Match the types of insurance with their descriptions. 1. Health Insurance 2. Automobile Insurance 3. Renters Insurance 4. Life Insurance 5. Disability Insurance 6. Homeowners Insurance

1. pays for medical care 2. pays for damages if the insured causes an accident or if the vehicle is damaged at no fault of the individual and no one else can be held liable 3. covers the belongings of an individual and liability in an apartment or house where he/she is a tenant 4. provides money to one's family at the time of death 5. provides income for a period of time if a person is unable to work due to illness or injury 6. insures a house or condominium in the case of accidental damage and destruction, may cover homeowner liabilities

Match the tax category with its description. 1. everyone pays the a set percent regardless of income 2. the amount of tax one pays increase with income 3. takes a bigger "bite" out of the income of low income families

1. proportional 2. progressive 3. regressive

Match the terms with their description. 1. return 2. risk

1. the profit that is made from an investment 2. the danger of losing money invested

What is the fractional reserve rate shown in this diagram?

10%

Examine the graph. During which year would being a consumer in Argentina have been extremely difficult?

1990

According to this graph, at $8 consumers will be willing to purchase _________.

2 pies

According to this graph the largest growth in the GDP occurred in ___________.

2012

What is the equilibrium quantity in this table?

3

According to this demand schedule at $6 consumers will be willing to buy __________.

3 pies

According to this supply table at $4 per pie, bakers are willing to supply ___________.

3 pies.

The opportunity cost of moving from point C to point D is

3.5 motorcycles

According to the information in this graph, the economy first began to recover from the recession during the

3rd quarter of 2009.

A downturn in the business cycle is considered a recession after it has lasted

6 months.

At point B _____motorcycles and ______tennis balls can be produced?

6, 6000

What is the optimum number of workers for this buiness to hire?

9

Which letter is indicating the lowest point that our economy reached during the great depression?

A

Which of the following statements is true about the gold standard?

A dollar was equal to an exact amount of gold.

Select all options that apply. Which of the following statements about the labor force are correct?

ALL APPLY

In answering the basic questions, entrepreneurs may choose labor intensive or capital intensive methods for production. Which of the following is a capital intensive endeavor?

An automobile assembly plant using robotics

Which of the following items determine whether a good a service has elastic demand? Select as many as apply.

Availability of substitutes for a good or service, If the purchase of the good or service can be delayed without harm, If the good is a necessity or luxury, Percentage of household budget taken by the good

Which of the following is the correct formula for balance of payments?

Balance of Payments = Capital Account + Current Account

Which of the following scenarios is an example of the crowding out or competition impact of government spending?

Business at private tennis and golf clubs go down when the government builds a state of the art facility in the area.

Which economic system experiences the most influence from the profit motive?

Capitalism

Which of the following items in the money supply belong in the category of M2 but not M1? You can select more than one.

Cd's or timed deposits, Savings accounts

The student returned the book she checked out to the school library before completing her project to avoid a paying a fine. What was her opportunity cost?

Completing the project

Which of the following actions falls into the category of fiscal policy.

Congress ends the tax breaks for those in the top 1% of earnings.

The demand for baby strollers has increased due to a rising birth rate among the "baby boomer bubble". Which graph best illustrates this situation.

D is pointing outwards to D1

Examine the graph. Which of the following individuals do you expect will get the most job offers?

Debbie, a trained geriatric nurse

Which of these statements describes what is illustrated on this graph?

Demand stayed the same while supply increased which caused the equilibrium price to decrease.

Which of the following examples shows how money is a unit of value?

Diane knew she wanted a new limited addition Toyota Rav 4 and she comparison shopped at the four Toyota dealers in her city.

Which phase of the business cycle is marked by increasing GDP?

Expansion

Which institution has the job of regulating the money supply in the US?

Federal Reserve Board

_______________are an example of commodity money.

Furs

What does point F represent?

Future production might reach this point if additional resources such as more workers or more technology were brought in.

Which of the following nations is a member of the European Union?

Germany

Which of the following individuals is counted as part of the civilian labor force?

Gloria who is a full time teacher

How does the chairman of the Federal Reserve Board get his job?

He is appointed by the President and approved by Congress.

Which of the following factors would decrease aggregate supply? Select all items that apply.

Higher business taxes, Higher prices for inputs such as the price of oil.

Which of the following is NOT a function of the Federal Reserve Board?

IT IS NOT: Provide financial services to banks

If these lines represented demand for SUV's what happened between D, the original line, and D1 the new curve?

IT IS NOT: The quantity of SUV's demanded increased because the price was lowered.

What did the Sherman Antitrust Act and the Clayton Antitrust Act have in common?

IT IS NOT: They protected consumers from being sold unsafe merchandise.

Assuming that the blue line is the original supply curve, then the red line indicates

IT IS NOT: an increase in quantity supplied.

Let's say Fantastic Sport introduces a new line, Rapid Running Shoes. It sends them to retailers at a very low price. What would you expect to happen?

IT IS NOT: equilibrium

The example of the T Shirt in the global economy shows that

IT IS NOT: manufacturing of final products including harvesting or mining raw materials takes place within the borders of one country.

The economy of Macroland experienced a 4% growth in GDP, a 2% decline in unemployment rate, and a 2% inflation rate. This economy is probably

IT IS NOT: needs government intervention to slow down its expansion.

In this diagram line #5 most likely represents

IT IS NOT: payments

Which of the following government actions could be used to slow down growth which is too rapid and leading to inflation?

Install a new federal sales tax of 5% on all goods and services except for food and prescription drugs

_____________ is a fee for letting you use money.

Interest

What happend to macroeconomic equilibrium when AD shifted from the black line to the blue line while AS remained unchanged?

It increased.

Which of the following scenarios would cause the unemployment rate to be overstated (reported as higher than it is)?

Ivan is working as a house painter and not reporting his income to the IRS.

Which of the following is an example of barter?

Jack agrees to mow Jill's lawn in exchange for two tickets to the Brave's game next weekend.

Based on the concept of comparative advantage

Jamie should make paper airplanes and John should make cookies.

In which country would you expect to find people enjoying a high standard of living?

Japan

Which of the following scenarios best demonstrates diminishing marginal utility in economic terms?

Julie already had 4 pairs of athletic shoes, but she bought a 5th pair on sale in a different style.

In order to be most efficient and enjoy comparative advantage

Kelly should mow the lawn and Karen should rake leaves.

The people carrying the sign in the photo probably belong to a

Labor Union

Which of the following characteristics are considered necessary for something to serve as money? You can select more than one choice.

Limited in supply, Durability, Divisibility, Portability

Which of the following individuals might find some benefit during a period of high inflation?

Michael, who is paying back loans he took out before the inflation hit

The nations shown in this map are members of

NAFTA

Which of the following organizations would fall into the category of a cartel because it sets prices and production level for the industry?

OPEC (Organization of Petroleum Exporting Countries)

In Georgia, when would you expect to find the lowest prices on items to take to the beach such as chairs, floats, and sun screen?

October

Which of the following examples would cause the unemployment rate to be under reported?

Pamela wants a full time job to support her family, but because her unemployment benefits ran out she is working part time.

Why is a sales tax considered to be a regressive tax?

Poorer taxpayers spend a larger proportion of their income on taxable goods and services than do wealthy people so the tax impacts their disposable income more.

Which phase of the business cycle is marked by rising unemployment rates and a slow down of production?

Recession

Which of the following statements are favorable to free trade?

When countries specialize the world has more goods and standard of living goes up.

Which of the following items is an example of allocating resources by holding a contest?

Serena Williams came in first at Wimbledon and received the prize money.

According to this table, at what stage in the production process do diminishing returns first occur?

Stage 2

This chart shows how many hours the production of the items takes (input). Which statement is correct?

The United States has the absolute advantage in jeans and CD's.

Which is NOT a reason that many merchants target American teenage consumers with advertising?

The average American teenager controls less than $500 annually in disposable income.

What happened during the year, 2009?

The economy reached its lowest point.

Which of the following occurences would lead to an increase in aggregate demand? Select all items that apply.

The government increases spending and reduces taxes, Consumer confidence increases.

Which of the following examples is NOT likely to be counted in the GDP?

The money Robin saved doing the work of remodeling his kitchen himself.

We have to distinguish between a change in quantity demanded and a change or shift in demand. Select all of the options that indicate a shift or change in demand.

The standard of living and income levels rise in the country, The price of a complementary good goes up.

The community of Belle Springs acquires a property near its center. Some of the citizens want a new town hall. Others lobby for green space and parks. Which of the following is an example of a trade off?

The town council meets and decides to build the new town hall.

According to the diagram, which of the following statements are correct?

This bank pays 6% interest on savings accounts and charges 10% interest on loans.

Which of the following is NOT one of the three basic economic questions?

Where will the goods and services be produced?

According to this graph, which statement is correct.

Women in all ethnic groups are getting paid less than men in the same ethnic group.

If two countries have a trade dispute, the case will most likely be heard by the

World Trade Organization

Which of the following is the formula for calculating the inflation rate?

Year 2 - Year 1/ Year 1 x 100 = Percent Change

Betty works for Softmac. It has more than a million employees, global locations, a CEO, and a Board of Directors. Betty most likely works for a

a corporation.

Assuming that the blue line is the original supply curve, then the green line illustrates

a decrease or shift in supply.

In most cases, international trade leads to

a higher standard of living across the globe.

Which of the following is a civilian good provided for its people by the US government?

a highway

An employee's pay is docked due to repeated tardiness to work. The employer is using

a negative incentive

Getting a reduced rate on your auto insurance because you are a ticket free and accident free driver is

a positive incentive

Price floors usually legislate prices that are

above equilibrium price.

During the 1970's, the United States experienced

galloping inflation

Which of the following items is NOT scarce?

garbage

Marginal cost refers to

additional cost of producing just one more unit of a good or service.

A bear market refers to

an extended period of time during which investors are reluctant and stock prices are falling.

The graph shows ______________from Q1 to Q2.

an increase in quantity demand

On this graph the movement from point a to point b indicates

an increase in quantity supplied due to an increase in price.

An externality is

an unplanned cost or benefit of economic activity.

Shortages differ from scarcity in that shortages are

are a temporary condition.

The personal information on a credit report will NOT show

arrest record

According to the graph in January, 2009, the unemployment rate was

at 8%

If a product such as oil is scarce or in short supply, consumers would expect the price to

be high.

In a command economy, natural resources are controlled and owned by

by the central government.

Establishing a base year as 100 helps economists

calculate the rate of inflation between years.

If the US dollar appreciates compared to other currencies, US consumers can

can afford to buy more imports.

When an entrepreneur takes some of his profits and replaces old machinery, he is investing in

capital goods

Human made products that are used for the production of other goods are

capital goods.

When the government goes into deficit spending to stimulate the economy, it has to borrow more money. This borrowing may have a negative impact by

causing interest rates to rise due to increased demand.

Because there is only one line on this graph and it slopes downward to the left it illustrates

changes in quantity supplied.

Cynthia will be living off campus at her college next year. She will have a part time job and her parents plan to give her an allowance each month. What type of account should Cynthia establish for paying her rent and other monthly bills?

checking account

Which of the following items belong in the category of M1? You can select more than one.

checking accounts, travelers checks, cash

When someone can do something at a lower opportunity cost than someone else we say that person has a(n)

comparative advantage

Because France specializes in the production of wine, and United Kingdom specializes in the production of beef, trade between the two countries is beneficial. This law of economics was first identified by David Ricardo as

comparative advantage.

Output of value that you can see, touch, and easily show to others are called

consumer goods

The index used to measure prices changes in a typical market basket is the

consumer price index

A business owned jointly by its members for the benefit of its members is called a

cooperative

Which business form is subject to the most government regulation?

corporation

Which of the following items is NOT considered to be money in any form?

credit card

Contractionary fiscal policy will have the effect of

decreasing aggregate demand (AD).

If the price of hamburger goes down during the summer cook out season, then _________________________.

demand for buns is likely to increase.

One way to distribute scarce resources such as a space at a desired school would be to hold a lottery. A lottery is

drawing by which resources go to the luckiest individual.

Which social goal does the data on this graph concern most?

economic equity

Mr. Cohen has decided to start a new company to produce widgets. He hired a contractor to build his factory and is interviewing perspective employees. Mr. Cohen primarily represents which factor of production?

entrepreneurship

With which phase of the business cycle would you expect to see some rise in the rate of inflation?

expansion

The US government contracts with Airy Airplanes to buy 100 new cargo planes for transporting troops and supplies. This action most relates to

expenditure.

Currently, money being used in the United States is ________________.

fiat money

Money used to build the structure of a coffee shop is called

financial capital

Land, water, forests, and minerals are examples of

natural resources

A new automobile factory locates in the town of Riverbend. The factory leads to overcrowded schools, overburdened highways, crowded stores. These are

negative externalities.

The organization shown in the photo is an example of a ____________________.

non profit.

Based on the data in the graph, which occupation do you predict is most likely to be experiencing a shortage of qualified applicants?

nursing

Which type of loan is most advantageous to borrowers?

one with simple interest

This scenario is calculated on

outputs

Janet bought shares of Linkedbook on its initial public offering. She

owns stock in the company making her part owner.

Diane was having a difficult time deciding on which of the colleges that accepted her to attend. She made a chart and listed the colleges vertically. Horizontally she listed her criteria; cost, proximity to home, having her major, and being near a city. She was about to use the

paced decision making model.

To invest in human capital, an entrepreneur might

pay for employees to earn credits toward advanced degrees

This credit report shows that the individual

pays his auto loan on time.

If you wanted to compare and contrast the standard of living between countries which indicator would give you the best idea?

per capita GDP

Because the items in the photo are nearly identical to each other we say that the market structure is _________________.

perfect competition.

The main source of revenue for the federal government is

personal income tax.

An important consideration for a country's production is to protect its resources. Which of the following is NOT a renewable source of energy?

petroleum

What are the three costs associated with health care insurance?

premium, deductible, co pay

The line indicated by the red arrow illustrates a

price ceiling.

The red arrow in this illustration is pointing to a line that represents a

price floor

Mimimum wage laws mandate a type of

price floor.

The National Education Association works for the benefit of its members. It is a

professional organization.

A producer's main goal is to maximize

profits.

Which of the following is usually a proportional tax?

property tax on homes and real estate

Items such as schools, defense, parks, street lighting, and roads are

public goods and services.

The point where is AD and AS intersect on the graph (macroeconomic equilibrium) is equal to

real GDP

The business cycle graph generally takes the shape of a

roller coster.

When selecting a bank to use for savings accounts, certificates of deposit, and checking accounts, one should check to see if

the bank is insured by FDIC.

One advantage a partnership has over a sole proprietorship is that it

shares responsibility and the work load.

Gloria is about 5 years away from beginning her retirement. She should

she should begin moving her investments into dividend paying stocks and interest paying bonds.

Which of the following would be sold in a product market?

shoes

What market condition exists in the market place at the price goods are offered as indicated on this graph?

shortage

The demand curve

slopes down to the right

Which type of business organization is prevalent in the US? (greatest number)

sole proprietorship

Which of the following items is in the land or resource category for making paper clips?

steel wire made from iron ore

Which function of money is involved when Sam puts his loose change in his piggy bank?

store of value

Which of the following types of college financial aid have to be repaid by the student?

student loans

What opportunity cost might the person in the circle have experienced in order to be in this place?

studying for a test

Flexible or floating exchange rates are determined by

supply and demand.

Macroeconomics is the subfield of economics that deals with

the actions of the economy as a whole including actions of government and its impact on the economy.

Debbie Smith is the CEO of Smith Trading Company. This company sells most of its goods overseas. Ms. Smith is happy when

the dollar depreciates.

Productivity can be measured by inputs and outputs. Output refers to

the number of widgets produced in an hour.

The policy holder is

the person who owns the policy.

The named beneficiaries in an insurance policy are

the persons designated by the owner of the policy to receive the benefits.

When Maria paid for a homeowners insurance policy and the insurance company accepted her payment

the risk of paying for accidental damages transferred from Maria to the insurance company.

This graphic illustrates

the three key economic indicators used to determine policy.

The system of allocating scarce resources by charging high prices favors

the wealthy.

Goods are public rather than private if

they are non-excludable and non-rivalrous.

What is a main goal of the World Trade Organization? (WTO)

to encourage trade

Why would the United States impose standards on goods imported from China and other countries?

to protect US consumers from harmful products that might enter the country.

During the Carter administration, the Chairman of the Federal Reserve Board, instituted a tight money policy in order to

to slow down the rate of inflation.

Aggregate supply is defined as the

total production of final goods and services at a range of price levels during a period of time.

According to this graph, the United States has been running a

trade deficit.

The scene in the picture is most likely taking place in a ______________ economy.

traditional

Which of the following items would be sold in a factor market?

trees

Partnerships are limited to

two or more partners.

Calculating comparative advantage helps individuals, businesses, and companies decide

what to specialize in.

Adam Smith, the "father of economics"

wrote "The Wealth of Nations" whose main idea was laissez-fair or government hands off the economy.