VirtualSC Honors Economics Final Exam

Which of the following shows the benefits and costs of a choice? Circular flow model PPF Cost-benefit analysis Statistical table

Cost-benefit analysis

The best reason to save money is to provide for future needs. Select one: True False

True

The formula for figuring your gross pay is Hourly Pay Rate x Number of Hours Worked. Select one: True False

True

command economy

Economic system in which a central authority makes the major economic decisions

traditional economy

Economic system in which economic activity is the result of ritual, habit, or custom

market economy

Economic system in which private citizens own and use resources to make a profit

mixed economy

Economic system that has some combination of traditional, command, and market economies

economic system

Efficient way of allocating resources and producing and distributing goods and services in a society

Which of the factors of production involves taking risks and combining resources to provide a good or service? Select one: Entrepreneurship Land Capital Labor

Entrepreneurship

The satisfaction received from using one more unit of a good or service is called which of the following? Opportunity cost Marginal cost Opportunity benefit Marginal benefit

Marginal benefit

Which of the following is the maximum amount a consumer is willing to pay for an additional good or service? Consumption costs Marginal benefit Marginal revenue Marginal consumption

Marginal benefit

What is the additional cost of the use of consumption of a good or service? Total cost Marginal benefit Marginal cost Marginal benefit

Marginal cost

Which of the following is a government run insurance program that provides healthcare assistance to the elderly and disabled? Income tax Social Security Medicaid Medicare

Medicare

Economics is best defined as the study of how societies deal with which of the following? Select one: The problem scarcity The factors of production The paradox of wealth The division of labor

The problem scarcity

An example of a business using marginal analysis is when ... They decide what to produce. They compare costs vs. benefits of hiring a new employee. They choose a name for their business. They compare supply and demand of their competitors' products.

They compare costs vs. benefits of hiring a new employee.

The hallmark of President Ronald Reagan's administration was supply-side economic policies. Select one: True False

True

The more often interest is compounded, the greater your interest earnings will be. Select one: True False

True

There is usually not enough lead time for a government to immediately respond and offset an impending recession because of various lags. Select one: True False

True

With trade, countries are able to consume beyond their Production Possibilities Curve (PPC). Select one: True False

True

Your credit score is a reflection of your ability to pay debts based on past experience. Select one: True False

True

Which of these do economists use to show different combinations of output? a factor of production a cost-benefit analysis a production possibilities curve a division of labor

a production possibilities curve

Which statement describes the law of demand? Select one: When the price of a product is lower, people will buy more of it. All goods and services have the same demand. The lower the price, the fewer people will want the good. Everyone has a limited amount of money that they will spend.

When the price of a product is lower, people will buy more of it.

The argument(s) against closed economies and government intervention is/are _____ . more of the planet's resources are used fewer benefits for less developed countries higher prices All of the above

all of the above

The main benefits of free trade are _____ . peace better choice of goods and services lower prices All of the above

all of the above

Which of the following do economists use to classify markets? Select one: number of firms size of firms type of product all of the above

all of the above

How are transactions shaped in a traditional economy? Select one: Individuals form networks within which they buy, sell, and trade as they choose. Each community decides as a group for whom the group will produce. Elders and ancestors make certain that things are done in specific ways. The three basic questions of production do not arise in this type of economy.

Elders and ancestors make certain that things are done in specific ways.

Why do nations trade? So they can specialize. Because they believe the products they receive are worth more than the products they give up. Because they need to acquire certain raw materials. all of the above

all of the above

A period of recovery from a recession is known as _____ . Select one: a peak an econometric model an expansion a trough

an expansion

A right, outward shift of a supply curve (an increase in supply) for avocados might be caused by _____ . an increase in consumer incomes an improvement in avocado picking techniques a news report stating that avocados are associated with good health an increase in the wages that must be paid to avocado pickers

an improvement in avocado picking techniques

Which of the following will cause an outward shift of the production possibilities curve? An increase in skilled workers A decrease in the nation's birth rate, decreasing the labor force Cuts in funding in educational training for employees A natural disaster limiting a vital natural resource

an increase in skilled workers

What kind of economy offers the same wage no matter how productive a person is? Select one: Traditional economies Market economies All economies Command economies

command economies

Countries will export goods and services they can produce at lower opportunity cost. This is called ____ . Monopoly absolute advantage Capitalism comparative advantage

comparative advantage

_____ is the condition that exists when someone can produce a good or service with a lower opportunity cost than someone else. Efficient Absolute advantage Labor specialization Comparative advantage

comparative advantage

Which of the following is not one of the things that determine supply? Select one: Technology Price of an input (wages, raw materials, etc.) The number of producers/suppliers in the market Consumer tastes and preferences

consumer tastes and preferences

When companies compete in a market economy, what is usually the result? Producers refuse to sell some of their products. There are frequent shortages of goods on the market. People pay much higher prices for goods. Consumers are able to buy goods for the best available price.

consumers are able to buy goods for the best available price

Which of the following terms means the ability to buy something now and pay for it later over a period of time (usually with having to pay a finance charge and/or the addition of interest)? Savings Profit Budgeting Credit

credit

If the economy is in an inflationary period, the government should _____ . Select one: lower corporate taxes lower taxes on consumers increase spending cut spending

cut spending

_____ unemployment occurs when workers are in-between jobs. It is usually the shortest term type of unemployment. Select one: Cyclical unemployment Frictional unemployment Structural unemployment Seasonal unemployment

frictional unemployment

The demand for _____ may outpace supply, mainly due to low pay. Select one: Bakers Home healthcare workers Doctors Factory workers

home healthcare workers

Which of the following would be an example of complementary goods? Hot dogs, hot dog buns Shampoo, hair spray Flashlights, candles Bar soap, body wash

hot dogs, hot dog buns

The goods and services that a nation buys from other nations are called _____ . imports tariffs exports quotas

imports

The goods and services that a nation buys from other nations are called _____ . tariffs exports imports quotas

imports

Which part of the market determines supply? Select one: Buyers Government Producers Consumers

producers

Which of the following is a consequence of scarcity? Select one: Producing more of one good can be accomplished without sacrificing any of another. Material resources are not limited. A society's wants and needs can all be satisfied. Producing more of one good means producing less of another one.

producing more of one good means producing less of another one

A graph showing all the combinations of goods and services that can be produced if all of society's resources are used efficiently is called which term? Lorenz Curve production possibilities curve circular flow model capital consumption frontier

production possibilities curve

People who want to shelter domestic producers from foreign competition with tariffs, quotas, and other trade barriers are referred to as _____ . Protectionists Globalists World Traders Free Traders

protectionists

In economics, utility refers to ... Explicit or implicit Practicality or impracticality Satisfaction or happiness Comfort or reliability

satisfaction or happiness

Which of the following is the fundamental economic problem which causes every person, family, business, and society to make economic choices? opportunity cost capital scarcity trade-offs

scarcity

Savings and checking accounts at a credit union are usually called which of the following? Passbook accounts Certificates of deposit Money market accounts Shared accounts

shared accounts

Kaylee will save her allowance of $25 per month to purchase a $150 mp3 player in six months. This is an example of what type of goal? Long-term goal Mid-term goal This is not an example of a goal. Short-term goal

short-term goal

Which country is an example of a capitalist economy? Select one: North Korea South Korea Venezuela Cuba

south korea

A period of inflation coupled with unemployment is called _____ . Select one: disinflation the misery index stagflation deflation

stagflation

opportunity cost

the next best alternative given up when a decision is made

Which of the following will not change the demand for corn? Select one: the incomes of consumers an increase in the price of a close substitute research showing health benefits of corn the price of corn

the price of corn

Which of the following replaces a costly item with a less costly one? Select one: the substitution effect consumer taste the income effect ​change in demand

the substitution effect

In the economic term oligopoly, the word part olig- means _____ . Select one: "one" "single" "few" "all"

"few"

Given this data, what is the per-unit price of apples? $4 $20 $10 $40

$4

Credit unions charge higher rates of interest on loans than banks. Select one: True False

False

Credit unions charge higher rates of interest on loans than do banks or finance companies. Select one: True False

False

If an employee works 30 hours with an hourly wage rate of $12, the employee's net or "take-home" pay would be $360.00.​ Select one: True False

False

It is OK for firms to fix prices together in oligopolistic markets. Select one: True False

False

Marginal analysis is only used by corporations and businesses, not individual consumers. Select one: True False

False

Social Security tax is an example of an optional deduction from your paycheck. Select one: True False

False

When calculating Nominal GDP, inflation is taken into account. Select one: True False

False

capital

a bulldozer

In a command economy, prices may be determined by _____ . the Federal Reserve a central planning committee supply and demand opportunity cost

a central planning committee

Which of the following is an example of capital? Select one: Oil A factory A construction worker A cheeseburger dinner

a factory

A representative collection of goods and services used to compile a price index is called _____ . Select one: deflation inflation GDP a market basket

a market basket

An example of a finished good calculated into the GDP for the year would be _____ . Select one: a used car sold to a consumer a new car sold to a consumer a computer chip bought by Apple to be used in a computer the lumber used to build a new house

a new car sold to a consumer

If the demand for potatoes increases whenever a person's income increases, then potatoes are an example of _____ . an inferior good a public good a free good a normal good

a normal good

land

a river

Why does a demand curve slope downward? Select one: because of the natural elasticity of the market because it shows how increasing incentives changes demand because quantity demanded increases as price decreases because it reflects the desire, ability, and willingness of consumers

because quantity demanded increases as price decreases

What do low prices signal buyers to do? Select one: buy less nothing buy more substitute

buy more

Within the market system, prices are determined by which of the following _____ ? Select one: a central planning committee buyers and sellers (demand and supply) opportunity cost the Federal Reserve

buyers and sellers (demand and supply)

thinking at the margin

evaluating the costs and benefits of additional units

According to the Rule of 72, if an investment of $5,000 is yielding an average of 6 percent, it will take ___ years for that investment to be worth $10,000. 6 72 36 12

12

Which type of retirement account offered by employers to their employees allows them to set aside tax-deferred income? Sometimes employers will even match the employee contribution up to a certain amount. Roth IRA 401(k) Mutual fund Savings

401(k)

In which of these systems is the government most likely to provide people with goods and services they could not otherwise afford? Select one: A command economy A market economy A traditional economy A free-enterprise economy

A command economy

What is a credit score? A five-digit numerical rating that reflects how likely you are to repay your debt. A credit score is a five-digit numerical rating that reflects how likely you are to fail at paying your debts. cA three-digit score that tells lenders how much money you make each year. A three-digit numerical rating that reflects how likely you are to repay your debt.

A three-digit numerical rating that reflects how likely you are to repay your debt.

Thousands of people leave a small town due to a factory closing down. Sales at the local grocery store are reduced. What causes this change? Prices or availability of complementary goods Change in the weather or season Change in the number of buyers Prices or availability of substitutes

Change in the number of buyers

Which of these best describe the influence of high prices on the behavior of producers (sellers)? Select one: High prices influence producers to use fewer raw materials and less labor. High prices are an incentive for producers to produce more. High prices are an incentive for producers to produce less. High prices have no significant influence on the behavior of producers.

High prices are an incentive for producers to produce more.

What is free trade? Domestic trade Trade that reflects the impact of specialization and currency exchange rates International trade with artificial barriers such as tariffs and quotas International trade with no artificial barriers such as tariffs and quotas

International trade with no artificial barriers such as tariffs and quotas

What is the world's largest free trade area? GATT NAFTA MFN WTO

NAFTA

What would a free-trader most likely support? an embargo a revenue tariff the infant industries argument NAFTA

NAFTA

Which statement explains why nations must trade? No nation can employ all of its resources All nations belong to free trade agreements No nation has all of the necessary resources All nations seek out new production methods

No nation has all of the necessary resources

Which statement describes a disadvantage of a command economy? Select one: Items tend to be made solely for the sake of profit. It can't "change direction" easily. It doesn't help the disadvantaged obtain the goods and services they need. Nothing stops the government from producing things people don't need.

Nothing stops the government from producing things people don't need.

What is the first step in constructing a price index? Select one: Divide the cost of every market basket by the base-year market basket cost. Select commonly purchased goods and services. Find the average price of each item in the market basket. Sample prices of items in stores across the country.

Select commonly purchased goods and services.

According to the law of diminishing marginal utility, which of the following is true when consuming marshmallows? Select one: -The additional satisfaction received from consuming extra marshmallows decreases as you eat fewer marshmallows. -The additional satisfaction received from consuming extra marshmallows increases as consumption marshmallows increases. -The additional satisfaction received from consuming extra marshmallows decreases as you eat more marshmallows. -Total satisfaction decreases as more marshmallows are consumed.

The additional satisfaction received from consuming extra marshmallows decreases as you eat more marshmallows.

The United States and China can both produce cars and computers. If both countries decide to specialize and trade, which of the following must be true? One country has an absolute advantage in cars while the other has an absolute advantage in computers. One of the countries has an absolute advantage in producing both goods. The opportunity costs to produce both goods must be the same. The countries have different opportunity costs to produce each good.

The countries have different opportunity costs to produce each good.

In economics, the term capital goods refers to which of the following? The amount of funds used to start a business. Company stocks and bonds The equipment and structures used to produce goods and services. The saving deposits an individual keeps in a bank.

The equipment and structures used to produce goods and services.

What is the basic purpose of the consumer price index (CPI)? Select one: To predict and avoid deflation, or a decline in the general level of prices. To track consumer spending on thousands of goods and services purchased by businesses. To track monthly changes in prices paid by urban consumers on goods that they purchase. To predict future price increases for representative goods and services.

To track monthly changes in prices paid by urban consumers on goods that they purchase.

Because of consumer demand to combat climate change, as well as other geopolitical influences, the fastest-growing jobs in the US revolve around renewable energy. Select one: True False

True

Economic growth is an increase in a nation's output of goods and services over time. Select one: True False

True

Equilibrium price and quantity is often referred to as the market clearing price and quantity. Select one: True False

True

Marginal analysis can help a company determine pricing strategies. Select one: True False

True

Marginal analysis could be useful to a parent deciding whether to return to the workforce after the birth or adoption of a child, or a student deciding what plans to make after graduating high school. Select one: True False

True

Quotas restrict trade. Select one: True False

True

Supply-side and demand-side economic policies have the same goals. Select one: True False

True

The Law of Supply states that price and quantity supplied have a direct relationship (when one increases the other increases). Select one: True False

True

An oligopoly refers to _____ . Select one: the market structure where the firm has the most pricing power (is a price maker) the market structure where the firm has the least pricing power (is a price taker) many small firms offering a differentiated product with easy entry into the market a small number of interdependent firms, high barriers to entry, and significant pricing power

a small number of interdependent firms, high barriers to entry, and significant pricing power

Scarcity is best defined as which of the following? Select one: Material resources that are limited. A society's wants and needs are unlimited and material resources are limited. Limited vital material resources compared with limited wants and needs. An idea that says industrialized nations will use up all of the natural resources.

a society's wants and needs are unlimited and material resources are limited

A politician is worried about steel manufacturing in his district. As a result, he proposes a price floor on steel. What will most likely be the result? No adverse effects Better quality steel A surplus of steel A shortage of steel

a surplus of steel

Interdependence is key to trade because _____ . trading partners specialize trading partners rely on each other to meet consumption needs trading partners reallocate resources to specialize All of the above

all of the above

Which of the following products has inelastic demand? Lipstick Cancer medication Boats Soda

cancer medication

What is the financial ability to repay a loan with present income called? Capital Collateral Capacity Character

capacity

What is the main cause of a change in the quantity demanded? Select one: change in price the income effect substitution changes in revenue

change in price

What are the causes of price changes most of the time? changes in supply only changes in supply and demand change in demand only government policy

changes in supply and demand

Contractionary fiscal policy is when the government _____ . Select one: increases spending and lowers taxes cuts spending and increases taxes decreases taxes and cuts spending increases taxes and increases spending

cuts spending and increases taxes

According to economists, international trade among countries _____ . increases the chance of conflict because of competition increases the chance of conflict because of economic rivalry decreases the chance of conflict because of floating exchange decreases the chance of conflict because of economic advantages

decreases the chance of conflict because of economic advantages

What does a protective tariff seek to protect? revenue free trade domestic industries free trade

domestic industries

What is one way to ruin your credit score? Pay all your bills on time. Don't pay any of your bills on time. Open a few different credit card accounts and use them as little as you can. Pay as little interest as you can.

don't pay any of your bills on time

The Rule of 72 is a technique for estimating the number of years required to _____ your money at a given rate of return. triple double quadruple halve

double

Answer the question below using the PPC curve to answer this question.What does the outward shift of the curve represent? Economic Growth Efficient Use of Resources Opportunity Cost Impossible Use of Resources Under utilized Resources

economic growth

An economy that is producing the maximum amount of goods and services is considered to be which of the following? efficient trading off growing under utilized

efficient

In 1962, the US prohibited all imports and exports from Cuba. This is called a(n) _____ . import embargo quota tariff

embargo

Mineral deposits, human capital, and entrepreneurship use of technology and machinery are all examples of which of the following _____ ? Select one: elements sometimes needed to move an existing company overseas material wants and needs the Circular Flow model factors of production

factors of production

An aging population and a tendency for companies not to provide retirement plans has led to a demand for _____ . Select one: Retail managers Data analysts Financial planners Healthcare workers

financial planners

In a mixed economy _____ . firms do not compete with one another markets are not present the government owns all factors of production firms can enter and exit the market as they wish

firms can enter and exit the market as they wish

Which of the following is a characteristic of a monopolistic market? Select one: There are low barriers to entry to the new market. Firms do lots of advertising. Firms set the price they charge. Goods and services offered for sale are identical.

firms set the price they charge

trade-off

giving up one thing for another

The process by which economies all over the world are becoming interconnected _____ . globalization exports imports tariff

globalization

Which of the following is a characteristic of a perfectly competitive market? Select one: There are high barriers to entry to the new market. Goods and services offered for sale are identical. Firms set the price they charge. Firms do lots of advertising.

goods and services offered for sale are identical

A limitation of Keynesian or demand side economics is that once government spending occurs the _____ . Select one: -government loses track of the money -courts find it illegal -government raises taxes -government doesn't cut back on it later when it's not needed to stimulate the economy

government doesn't cut back on it later when it's not needed to stimulate the economy

Which of the following statements is NOT an example of a market economy? Select one: Sellers can enter and exit the market. Consumers can choose what they want to buy. Government ownership of the factors of production. Competition among sellers of products.

government ownership of the factors of production

Changes in the population have created a significant demand in which of the following career fields? Select one: Manufacturing Health care Coal mining Education

health care

If the economy is in a recession, to help the economy, the government should _____ . Select one: cut spending increase spending raise taxes on consumers raise corporate taxes

increase spending

Expansionary fiscal policy is when the government _____ . Select one: increases spending and decreases taxes decreases taxes and cuts spending increases taxes and increases spending cuts spending and increases taxes

increases spending and decreases taxes

If gas prices increase 20% and demand remains the same, demand for gas is considered _____ . inelastic elastic inefficient none of the above

inelastic

Which of the following statements best describe trade between two nations? It is legally required. It avoids specialization. It involves low cost for both nations. It is mutually beneficial.

it is mutually beneficial

Suppose you like banana cream pie made with vanilla pudding. Assuming all other things are constant, you notice that the price of bananas is higher. How would your demand for vanilla pudding be affected by this? It would increase. It would decrease. It would stay the same.

it would decrease

In the mythical country Alpha, an entrepreneur has introduced a new technology that makes manufacturing twice as efficient as before. How is this likely to affect the production possibilities curve? It would not change the curve. It would move the curve to the right. It would move the curve to the left. It would change the shape of the curve.

it would move the curve to the right

Fractional reserve banking means that banks are required to _____ . Select one: charge the same interest rate on all their loans expand the money supply when requested by the central bank keep part of their demand deposits as reserves insure their deposits against losses and bank runs

keep part of their demand deposits as reserves

The branch of economics that deals with the economy as a whole is called _____ . Select one: fiscal policy expansionary policy macroeconomics contractionary policy

macroeconomics

Which of the following BEST describes income? Money found on the ground Money received for completing a job Money donated to the local food bank Money in your savings account

money received from completing a job

Which of the following is NOT a problem caused by monopolies? Select one: Poor customer service Fewer new products Low quality More competition

more competition

Hailey received her degree from Clemson and was offered a job. Instead, she decided to take a gap year, travel and volunteer. What effect does this have on the unemployment rate? Select one: An increase in the unemployment rate No effect on unemployment A decrease in the unemployment rate An increase in cyclical unemployment

no effect on unemployment

A government may be able to reduce structural unemployment by _____ . Select one: lowering tax rates offering job training programs increasing imports increasing the money supply

offering job training programs

When one decision is made, the next best alternative not chosen is called which term? Select one: Opportunity cost Scarcity Economic resource Production

opportunity cost

The movement of American jobs overseas is called _____ . Select one: Investing Outsourcing Sharecropping Shipping

outsourcing

Which market structure provides the lowest prices for consumers? Select one: Monopolistic competition Perfect competition Monopoly Oligopoly

perfect competition

Equilibrium is reached when what occurs? quantity supplied equals quantity demanded price increases prices are inelastic no change in the quantity supplied

quantity supplied equals quantity demanded

A major problem with fiscal policy is _____ . Select one: recognition lag stagflation the fast pace with which it is implemented inflation

recognition lag

401(k), IRA, and Roth IRA are all examples of a _____ account. Retirement Stock Low interest College savings

retirement

A customer service representative loses his job because his company bought new software that does most of his job automatically. This is an example of ____ . Select one: structural unemployment cyclical unemployment seasonal unemployment frictional unemployment

structural unemployment

When workers are replaced by machines or computer systems, _____ occurs. Select one: structural unemployment cyclical unemployment seasonal unemployment frictional unemployment

structural unemployment

A tax placed on an imported product is called _____ . quota export tariff import

tariff

Changes in fiscal policy would involve changes to _____ . Select one: tax rates interest rates the money supply None of the above

tax rates

If you wanted to understand the relationship between households, businesses, and resources, you would study _____ . Select one: material wants and needs public goods nonmarket transactions the Circular Flow model

the Circular Flow model

Which countries are most directly affected by NAFTA? all of the most favored nations (MFNs) members of the World Trade Organization the United Kingdom, France, and Germany the United States, Canada, and Mexico

the United States, Canada, and Mexico

marginal benefit

the added benefit from adding one unit

marginal cost

the additional cost of producing one unit

All of the following are considered automatic stabilizers except _____ . Select one: Unemployment Insurance progressive taxes the lottery food stamps

the lottery

Monopolies are considered harmful to consumers because _____ Select one: they pay their employees less than other businesses. they move factories to other countries. they can charge high prices for their goods. they use false advertising.

they can charge high prices for their goods

Why are consumers powerful? Select one: Their decisions force businesses to behave ethically. They have more rights than corporations. They help decide a business's opportunity costs. They drive decisions about what to produce.

they drive decisions about what to produce

How is it possible for a country to consume outside of its PPC? Through specialization and trade Increase in the division of labor It's not possible without more resources Increase in education and job training

through specialization and trade

labor

time spent making a pizza at a restaurant