TExES Core Subjects EC-6: Economic Principles

Why has cattle ranching declined as a major employer in Texas?

Healthier eating habits have lowered the demand for beef

Who is normally the producer in a resource market?

Households

Which industry has the largest potential for growth in Texas?

technology

The Industrial Revolution took place during the

18th & 19th centuries

Which of the following does not fall within the category of land as a factor of production?

A building

Which is an example of fixed capital?

A machine

What is consumer lock-in?

A situation where consumers are stuck having to earn more and more money in order to fulfill continuously increasing needs and wants

The supply curve for money looks like which of the following?

A straight vertical line

What are economic activities?

Actions that involve the production, distribution and consumption of goods and services at all levels within a society.

Which one of the following statements is correct?

All states are characterized by a mixed economy - there is no such thing as a pure market economy or pure command economy in the real world. States may place a great deal of emphasis on one particular structure, but will blend in some features of the other systems.

Why did cotton emerge as the leading agricultural crop in Texas?

Because early settlers had expertise in growing it

M1 consists of which of the following?

Cash and checking accounts

What model is used to demonstrate markets and the flow of goods between firms and households?

Circular Flow

John manages a toy factory that produces toy trains, baby dolls, and race cars. Every day he receives a list from the local government specifying how many toys he must produce, what materials to use, and how much each toy is to be sold for. He organizes the day's work accordingly. This scenario closely aligns with which of the following?

Command economy

Which term describes the way a society organizes the production, distribution, and consumption of goods and services to meet people's needs and wants?

Economic System

What is the term that economists use to describe the theoretical consumer of needs and wants?

Economic man

Which of the following is a factor of production that some economists believe should be included with the three basic factors?

Enterprise

What is the acronym for the metric economists use to measure the total income or total expenditures within the borders of a single nation or country?

GDP

What is the difference between GDP and GNP?

Gross national product starts with taking gross domestic product and then adding additional income from foreign sources.

Which of the following is NOT something that a traditional manufacturing business might consider when deciding where to locate (for example, during the industrial revolution)?

How noisy the area is.

Where were farms generally located hundreds of years ago?

In areas that had lots of water AND fertile soil.

Why can GDP be defined as total income or total expenditures?

Income and expenditures are roughly the same.

Which of the following allows us to cope with scarcity of resources?

Increased efficiency, or getting more outputs from the same inputs

Which of these is NOT an argument against economic globalization?

It can create jobs and introduce democracies.

You are overseeing the construction of buildings on an island. Why would you want to build high-rises?

Land is very scarce but air space is not.

How can interest rates be used to determine the state of a nation's economy?

Low interest rates mean the government is trying to get people to borrow and grow the economy, meaning it currently it isn't growing

Which of these is the most liquid?

M1

Which of the following is NOT a reason that distribution patterns of economic activities have changed over the last few hundred years?

Making money is easier than it used to be.

Samantha owns an ice cream shop where she can make all business decisions. She often changes the flavors of her ice cream depending on customer feedback and sales figures. This scenario best describes which of the following?

Market economy

Which of the following is NOT a way that expansion and improvement of communication has affected the distribution of economic activity?

Most people are richer than they used to be.

What's the best explanation of needs and wants?

Needs are what we need to function from a physiological or socio-economic perspective, while wants are specific ways to fulfill our needs

What is a problem with over-consumption?

Over-consumption can lead to some people's needs not being fulfilled

Storing money under the mattress is which of the following?

Precautionary demand

What is the name of the market in which households buy goods from firms?

Product

Susie goes to XYZ Grocery store and walks around to look at all the items that she has available to her for purchase. What is Susie participating in?

Product Market

What is the best explanation of factors of production?

Resources used by a company to produce good and services

The economic sector that employs the most Texans today is:

Services

Which one of the following economic systems is characterized by state ownership of land and capital, but individuals remaining in control of their labor?

Socialism

You have an economics test tomorrow that you would like to pass. Which of the following activities has the greatest utility?

Studying economics

Which of the following gives an example of utility changing depending on the circumstances?

Take-out that is good enough for your friend may not make the impression you want on your date.

What is the utility of a good?

The total usefulness it has for someone.

The need for money to buy and sell things qualifies as which of the following?

Transactional Demand

What country has the world's largest economy and about how large is it per year, as measured by GDP?

USA, $17.4 trillion

Which one of the following is never fulfilled?

Wants

What is defined as large-scale departure of companies, assets, and wealth from a country due to economic instability or the opportunity for cheaper production?

capital flight

In the pre-industrial age, most people produced goods to be

consumed only by their families

What is defined as the economic mixing and interdependence of economies across the world through an escalation of cross-cultural movement of goods, services, technologies and wealth?

economic globalization

What is defined as the bringing in of foreign goods into an economy?

importing

Which factor of production does management fall under?

labor because it involves people doing things

What terms denotes a time in which an economy no longer relies on heavy industry and manufacturing, but instead on the offering of services?

post-industrialism

Exporting is the act of

sending goods to another country

What is defined as producing goods only for the consumption and survival of one's family group?

subsistence level living

The Texas oil boom in the early 20th century was caused by the discovery of large oil deposits and:

the growth of automobile use.

The migrating of people from rural areas to urban ones is known as

urbanization