ECo 3

This graph shows changes in GDP and the unemployment rate in the United States in recent years. In what year would someone looking for work have had the hardest time finding a job?

2009

Which best describes a situation where an oligopoly exists?

A small number of producers command nearly the entire market for a certain good or service.

Which occurred during the Great Depression? Check all that apply.

*falling wages *plummeting growth *surging unemployment

The chart shows the marginal cost of producing apple pies. According to the chart, the marginal cost of producing the second pie is

.50

These circle graphs show information about Bolivia's workforce. Which statement best summarizes the information on these graphs?

Many Bolivians are farmers, but the agriculture sector does not produce much in terms of GDP.

These circle graphs show information about Bolivia's workforce and GDP. What do the graphs indicate about Bolivia's labor force?

Many people in Bolivia work in agriculture.

This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in the short run and long run?

Output reacts differently.

According to this graph, how does supply behave in the long run?

Output remains constant.

This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in the long run?

Output remains constant.

This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in the long run?

Output remains constant.

Which statement best describes the circular flow model?

The model represents the movement of money and resources throughout the economy.

Which best describes how consumers let producers know what they want to buy and how much they're willing to pay?

The purchases consumers make indicate their desires to producers.

What does deficit spending require a government to do? a. lay off workers b. cut taxes c. take on debt d. hire more workers

c

What term describes a ban or restriction on trade with another country? [_______________________]

embargo

Which type of trade barrier is explicitly used for political purposes?

embargoes

A company in Maine sends lobsters to France. What is this an example of?

exporting

An entrepreneur would most likely be a low risk taker. trained manager. person who works well alone. person who has a brief work week.

c

Which best describes how the government sanctions technological monopolies?

issuing patents

Which best explains how the law of demand affects consumers?

it helps consumers tell producers when prices are too high.

Which best describes a reason that consumer demand can change? loss of income loss of supply distribution problems market problems

loss of income

It is better for businesses to have ________ opportunity costs, as it often gives them a comparative advantage.

lower

An example of a substitute good would be a

lower-priced gallon of milk

in a competitive market a furniture company decides to use cheaper materials to decrease production costs and pass on the savings. this is an example of

lowering prices for customers

Explain how the basic economic decisions are made under capitalism.

made through free interaction of individuals looking out for their own best interests.

Which are the most likely uses of capital invested in a business? Check all that apply. paying taxes hiring workers repaying investors producing goods distributing goods buying materials

2,4,5,6

Economic growth takes place when a country produces a steady number of automobiles. has a high unemployment rate. measures its gross domestic product (GDP). produces more goods and services.

produces more goods and services

The Food and Drug Administration sets standards for

product labeling.

Traditional Economies

roles and economic decisions are defined by custom.

Tax on groceries is a (n)?

sales tax

People who buy stock in a company are known as .

shareholders

a ___ is a tax issued by the federal government on imported goods

tariff

Hyperinflation can occur when

the government prints a ton of money in order to pay off its debt.

Based on the scenario, who is most affected by the situation taking place within Country D?

the government, workers, and businesses of Country D

What is the largest source of income for the Federal Reserve?

the interest it receives on government securites

Which of the following would be considered a nonrenewable resource?

the petroleum used to make trash bags

What is the best definition of marginal benefit?

the possible income from producing an additional item

What does "P" represent on the graph?

the price at the equilibrium point

Macroeconomics

the study of the performance, structure, behavior and decision-making of an economy as a whole.

The aggregate is

the total amount of goods demanded or supplied.

The aggregate is

the total number of goods demanded or supplied.

Globalization

the trend toward a world that is more interconnected by technology, trade, and travel

On a supply and demand graph, equilibrium is the point where

the two curves meet.

Which best describes why governments collect taxes?

to fund government programs

implement

use to complete a specific action

What is circular flow?

A model of market economy that shows the flow of dollars between households and firms.

marginal revenue

Additional income gained from selling an additional good

Which calculation helps determine which producer has the absolute advantage?

Amount produced minus resources used.

The Fed's use of open market operations affects banks' interest rates. money available to lend. lending practices. stability.

B) money available to lend.

What most likely will happen if the pie maker bakes a seventh pie?

B. The marginal cost will most likely increase to $2.00

Which statement best explains how elasticity and incentives work together?

An elastic good, such as a game, is more likely to respond to incentives.

How is an excise tax different from a sales tax?

An excise tax applies to specific products.

People might choose to use a debit card rather than cash for purchases because

a

Typically, low inflation is a sign of

a healthy economy because it results from a steady rise in demand.

The change in interest rate shown in the charts resulted in

a higher monthly payment

Maria purchases a premium brand of coffee at the grocery store for $8. Which would be considered a substitute good?

a lower-priced brand of coffee

Interest

a payment made for the use of borrowed money

When production is very high but demand is very low, it can lead to

a recession

Which best describes ASEAN?

a regional organization promoting growth in Southeast Asia

regulatory policy

a rule or guideline created to protect the public interest

Which object is likely to have the most value based on the concept of scarcity? a flowering plant a silver necklace a new coffee table a crop of oranges

a silver necklace

Economic security

a social goal that results in programs to help support the ill, the elderly, and workers who have lost their jobs.

imbalance

a state of unevenness

On a graph, an equilibrium point is where

a supply curve and a demand curve meet.

On a graph, an equilibrium point is where a supply curve and a demand curve meet. a supply curve is higher than a demand curve. the supply and demand curves head up. the supply and demand curves head down.

a supply curve and a demand curve meet.

proportional tax

a tax in which wage earners with lower incomes are taxed at a higher percentage rate than earners with higher incomes

Read the graph that displays mortgage interest rates between 1978 and 1983. In what year did consumers get the best deal on a mortgage?

a. 1978

To barter means to

c. trade

An economic system where people obtain their needs/wants/goods by the direction of the government and the government sets the prices; typically seen in dictatorship societies

Command

In this economy, the Government eliminates all competition and choice amongst businesses by regulating businesses.

Command

In this type of economy, the government controls enterprise and individuals do not have the freedom to engage in enterprise.

Command

In a mixed market economy, property owned by the government can be used by many citizens. can cause economic inequality. can help promote personal wealth. can be used for private businesses.

can be used by many citizens.

Which best summarizes how consumer demand changes?

Consumer demand changes over time based on many factors.

Which best summarizes how consumer demand changes? Consumer demand changes quickly based on few factors. Consumer demand changes over time based on many factors. Consumer demand changes quickly based on specific factors. Consumer demand changes over time based on few factors.

Consumer demand changes over time based on many factors.

Producers hoping to earn profits supply closet and services to who?

Consumers

What do economics allow individual agents to do?

Economics also allows individual agents to balance expectations.

How are economics divided?

Economics is divided into two broad areas: microeconomics and macroeconomics.

If you sell your old car for more than you paid, the profit is subject to?

capital gains tax

Which form of transportation has led to more efficient business in a global market? helicopters high-speed trains tractor trailers cargo ships

cargo ships

In the United States, which type of industry is often considered part of an oligopoly?

cell phone carriers

Which technologies have made global communication instant and more effective? Check all that apply.

cell phones wireless devices smart phones

Which is the cause of the media industry's oligopolistic market structure?

centralization of ownership

What is the difference between marginal cost and marginal revenue?

Marginal cost is the money paid for producing one more unit of a good. Marginal revenue is the money earned from selling one more unit of a good.

The North American Free Trade Agreement created a free trade zone between Canada, the United States, and .

Mexico

The graph shows a demand curve. Which most likely accounts for the changes shown on the demand curve?

More consumers want a product.

Excess supply is created when price or _____ move away from the equilibrium point

Quantity

How do quotas help domestic producers?

Quotas facilitate the sale of more domestic goods.

Stan's Sporting Goods is a competitor that can manufacture seven soccer balls out of a possible ten, if it makes one soccer net. Which statement correctly compares the two businesses?

Sabrina's Soccer has a comparative advantage over Stan's Sporting Goods because Sabrina's Soccer has a lower opportunity cost.

Where are the 12 districts of the Federal Reserve?

San Francisco, Dallas, Minneapolis, Kansas City, St. Louis, Chicago, Cleveland, Atlanta, Boston, New York City, Philadelphia, and Richmond

What limits production?

Scarcity of resources limits the amount of production that can be undertaken. This requires choices to be made.

________ is the term used to describe the amount of control or influence that consumers have on a market.

Sovereignty

... is the act of limiting the types of goods and services produced.

Specialization

________ is the act of limiting the types of goods and services produced.

Specialization

______________ is the act of limiting the types of goods and services produced.

Specialization

Specialization

The act of limiting the types of goods and services produced

What is consumer surplus?

The difference between the maximum price a consumer is willing to pay and the actual price they do pay.

How can the field of economics be described as?

The field of economics is a social science.

How does globalization cause the foreign sector to influence the economy?

The foreign sector influences how imports and exports move between firms and households.

The chart shows a circular flow model describing the movement of goods and services. How does globalization cause the foreign sector to influence the economy?

The foreign sector influences how imports and exports move between firms and households.

Which of the following best describes the circular flow model

The model represents the movement of money throughout the Econ

Which of the following best describes the circular flow model?

The models represent the movement of money throughout the economy.

The most common measure of inflation is a statistic called the_______________

The most common measure of inflation is called consumer price index.

Which is an advantage corporations enjoy over partnerships?

The owners of a corporation don't have to work together to make all of the business decisions.

If the quantity supplied is greater than the quantity demanded, what must happen to the price in order to reach equilibrium?

The price of the product will decrease to meet equilibrium.

What are the signs of low inflation? Check all that apply.

The signs of low inflation are that demand steadily rises, prices continue to increase, and the economy grows in a healthy way

A long run equilibrium occurs when a long run aggregate supply and aggregate demand meet. What does having long run equilibrium indicate about a society

The society is using all of its resources efficiently.

What are steps in a supply chain?

Typical steps in a supply chain include: extraction of raw materials; acquisition of components; production; inventory; transportation; wholesaler; and retailer.

This table shows the number of cookies several bakeries sell each day. All else being equal, which bakery has the absolute advantage?

Uncle John's

What is a major factor in the decline of some occupations, such as those in the textiles and clothing industries? shifting consumer tastes overseas labor costs changing technologies aging populations

changing technologies

In a free enterprise system, governments address public problems through policy to ensure that

citizens' needs are met and protected.

Clark's Cleaners is a housekeeping service. The company's expenses include the

cleaning supplies and any equipment the company purchases.

Which type of business is most likely to use the bricks-and-clicks business model?

clothing sellers

In a free enterprise economy,

competition is allowed to flourish with a minimum of government interference.

efficient

completed in the fastest amount of time using the fewest number of resources

An example of complementary goods would be

computers and printers

An example of complementary goods would be

computers and printers.

An example of complementary goods would be computers and printers. cars and trucks. sheets and towels. food and clothing.

computers and printers.

Which best summarizes how consumer demand changes

consumer demand changes over time based on many factors

Command Economies Disadvantages

consumer needs may not be met; hard work is not rewarded, the necessary decision-making bureaucracy delays decisions, and little flexibility to deal with day-to-day problem

In economics, workers are producers. Which other role do they play?

consumers

Who ultimately pays for tariffs, consumers or producers? [_______________________]

consumers

Microeconomics is the study of the economic interactions between

consumers and producers

In the market, actions known as incentives affect

consumers or producers

In the market, actions known as incentives affect producers only. consumers only. consumers or producers. neither consumers nor producers.

consumers or producers.

One primary purpose of the European Union is to

create a common market.

innovation allows producers to

create goods that draw consumer attention

Read the graph about mortgage interest rates and housing starts between 1978 and 1983. A conclusion that can be drawn from both graphs by looking at 1983 is that interest rates

dropped, which led to more home starts.

The social and economic goals of the United States include

economic freedom, security, and equity.

List the five major characteristics of a free enterprise system.

economic freedom, voluntary exchange, private property, profit motive, and competition.

Describe the seven major economic goals which most Americans agree on.

economic freedom-freedom to make one's own economic decisions; economic efficiency-recognition that resources are scarce and need to be used wisely; economic equity-belief that the economy should be managed justly, impartially, and fairly; economic security-protection from effects of adverse economic events; full employment- desire for the economic system to provide as many jobs as possible; price stability-desire for stable prices; economic growth-production of more and better goods and services

The ... rate is the interest rate banks charge each other for borrowing or storing money.

federal funds

The _____ rate is the interest rate banks charge each other for borrowing or storing money.

federal funds

For which are sole proprietors completely responsible?

financial losses

Which is useful for making rational choices?

financial planning

Every economic system has goals such as

financial security and freedom to carry out economic choices.

A system that applies the same tax rate to every taxpayer regardless of income bracket is a?

flat tax system

The table compares two countries and two products. What might be the best decision for Country A?

focus on the petroleum industry only

a frozen foods company changes an ingredient to meet a new gov. standard. this is an example of

following a federal regulation

The proper style for an argumentative essay is ___________

formal

The proper style for an argumentative essay is_________.

formal

Classical economics played an important role in helping the United States establish __________ policy

free enterprise

classical econoimcs played an important role in helping the US establish

free enterprise

Where does its operating income come from?

from the services it provides

Most economic systems strive for

full employment, or providing as many jobs as possible.

Opportunity cost means that something must be ______________.

given up

Opportunity cost means that something needs to be

given up.

Bank deposits help the nation's economy by

giving banks the money to loan and invest.

What type of labor force might a pottery factory want to focus on when hiring? highly skilled highly wealthy highly educated highly localized

highly skilled

What is a potential negative effect of an expansionary policy?

increased inflation

According to the law of demand, as prices decrease, demand

increases

According to the law of demand, as prices decreases, demand

increases

Demand-pull inflation happens when the demand for goods remains very low. shifts up and down. matches the supply. increases.

increases

The law of supply states that as the price of a good rises, the quantity supplied of that good

increases

According to the law of demand, as prices decrease, demand

increases.

Land is considered a resource because it is always available to use. is used to produce things. costs little or nothing to use. requires labor to be useful.

is used to produce things

It is better for businesses to have ... opportunity costs, as it often gives them a comparative advantage.

lower

In a competitive market, a furniture company decides to use cheaper materials to decrease production costs and pass on the savings. This is an example of

lowering prices for customers.

What might happen if an economy is unable to produce wanted goods and services? People will go without them. People will look elsewhere for them. People will stop wanting them. People will focus on needs instead.

people will look elsewhere for them

An entrepreneur would most likely be a

person who works well alone.

According to the article by Brooks, successful entrepreneurs are most interested in

personal fulfillment.

Governments are both

providers and consumers.

Excess supply is created when price or __ move away from the equilibrium point.

quantity

Excess supply is created when price or move away from the equilibrium point.

quantity

a demand curve shows how changes in

quantity affect price

In microeconomics, price helps determine both quantity supplied and quantity demanded. Which other factors can impact each by causing a shift to occur?

quantity supplied is determined by production costs, and quantity demanded is determined by desire for the product

Economic efficiency

resources are used wisely and that the benefits gained are greater than the costs incurred.

To protect consumers, the SEC requires brokers and dealers to ________ information about securities.

reveal

A resource has value, and people are willing to pay for it most likely because the resource is

scarce

The largest single item in the Fairfax County budget is?

schools

Which does not motivate entrepreneurs?

security

In pure competition, producers compete exclusively on the basis of

sell identical items

The circle graph shows the GDP in Germany for 2012. Which sector of Germany's economy had the highest GDP?

services

People who buy stock in a company are known as _____.

shareholders

A(n) _____ is a tax issued by the federal government on imported goods.

tariff

A(n)_______________ is a tax issued by the federal government on imported goods.

tariff

Child care is a?

tax credit

A disadvantage of corporations is that shareholders have to pay on profits.

taxes

Wellness Pharmaceuticals has released a new antidepressant, Lexabuzac. Which type of monopoly does the company most likely have on this medication?

technological monopoly

Which federal regulatory agency would most likely bring a civil suit against a business that broke securities laws?

the SEC

In microeconomics, price helps determine both supply and demand. Which other factors also help determine each?

the Supply is determined by production costs, and demand is determined by need for the product.

Which is an example of a government monopoly in the United States?

the US Postal Service

Market Economies Examples

the US, Canada, Japan, S. Korea, Singapore, and parts of Western Europe.

absolute advantage

the ability of one party to produce a good or service at a lower cost than any competitor

comparative advantage

the ability of one party to produce a good or service at a lower opportunity cost than any competitor

Traditional Economies Examples

the central African Mbuti, the Australian Aborigines, and northern Canada's Inuits.

At which level of production does the company make the least profit?

the first pair of cleats

Read this prompt for an argumentative essay. A free enterprise system provides individuals the opportunity to make their own economic decisions without restrictions from the government. It allows the supply and demand of consumers to determine the success or failure of an economic endeavor. It also requires entrepreneurs to rise or fall on their own without government support. Do you believe this type of economic system is more or less helpful, and why? Write an argumentative essay that explains your position. What will be the topic of the essay? the role of government the rise of entrepreneurs the free enterprise system the command economy system

the free enterprise system

Economic freedom

the freedom for people to make their own economic decisions, is a goal highly valued in the US.

Federal Open Market Committee

the group within the Federal Reserve that creates monetary policy

What is the best definition of marginal cost?

the price of producing one additional unit of a good

In a mixed market economy, a fire breaks out in a sneaker factory. The repair work most likely will be paid by the government group that runs the factory. the state agency that operates the factory. the city official who manages the factory. the private citizen who owns the factory.

the private citizen who owns the factory.

Check clearing

the process of removing money from the account of the person who wrote the check and delivering it to the account of the check's recipient

What encourages produces to reduce costs and increase revenues?

the profit motive

Which is the main force behind the decisions made by producers in a free-market society?

the profit motive

What is the purpose of macroeconomics?

the purpose of this discipline is to maximize national income and provide national economic growth.

What determines the value of an item? the amount of goods that are produced the capital required to build the factory the unlimited wants of the consumers the resources consumed in production

the resources consumed in production

Which of the following is influenced by personal economic choices? Check all that apply. the cost of your rent and utilities the resources you have available the amount of money you spend on a bus pass the money you decide to spend on leisure products the amount of money you put into your savings account the manner in which you balance your time between work and leisure

the resources you have available, the money you decide to spend on leisure products, the amount of money you put into your savings account, the manner in which you balance your time between work and leisure

Elasticity

the responsiveness of an economic factor to changes in other factors, such as price

Economic equity

the social goal that explains why so many people support laws against wage and job discrimination.

a long-run equilibrium occurs when long-run aggregate supply and aggregate demand meet. What does having long-run equilibrium indicate about a society?

the society is using all of its resources efficiently

In a communist command economy, workers are employed by the agencies. the consumers. the producers. the state.

the state

Why were free trade zones created in China?

to attract investments by foreign countries

legislate

to create a law or rule

What is one purpose of writing a business plan before entering the market?

to differentiate the new company from the competition

Why might a country choose to devalue its currency? to please its trading partners to encourage exports to encourage imports to reduce taxes

to encourage exports

influence

to encourage something to happen or change

In a free enterprise system, what are the goals of government? Check all that apply.

to ensure safety for its citizens to ensure that citizens' needs are met to solve the problem of poverty to ensure that the market is fair

Which best explains why producers choose to specialize? Check all that apply.

to gain a comparative advantage to increase efficiency

Which is a technique advertisers employ to increase consumer demand for their goods and services?

turning luxuries into necessities

When individuals are looking for jobs but are unable to find work, they are said to be

unemployed

Which is the primary role of the consumer?

using goods and services

Which term refers to the personal satisfaction someone gets from consuming goods and services?

utility

Which is not an example of a person's income?

valuables

A pair of stylish sneakers could be considered a _______________ because it is not a necessity.

want

One of the three economic questions deals with deciding what goods and services should be produced. what the costs of production should be. how goods and services will be marketed. how consumers will receive products.

what goods and services should be produced.

Which situation might cause a country to specialize?

wheat production in a region with fertile soil

Who is responsible if your tax preparer makes a mistake on your tax return?

you, the taxpayer

A flat tax is the same as a?

proportional tax

--

--

What role does the Federal Reserve play? Check all that apply.

1,2,5

Brenda's Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total profit the company earns after selling 100 boards?

$3,000

What are the goals when a government uses expansionary monetary policy? Check all that apply.

*increasing its money supply to boost the economy *increasing its money supply to speed business expansion

How did Adam Smith's economic ideas help the United States establish a free enterprise system? Check all that apply.

*they led to freedom of choice for consumers and producers *they led to open competition for consumers *they led to individual ownership of property

-

-

What are the basic types of resources used by producers? Check all that apply.

-capital -labor -land

Which are duties of OSHA? Check all that apply.

- investigating worker complaints - inspecting businesses

As a result of decreased productivity, David lost his job designing cars. Which terms can be used to describe David? Check all that apply.

-cyclically unemployed -unemployed

Which of the following are considered needs? Check all that apply.

-food -residence -water

Which are duties of OSHA? Check all that apply.

-investigating worker complaints -inspecting businesses

What is true of representative money? Check all that apply. It can be exchanged for a valuable good. It was once the most common form of money. It was used in systems involving a "gold standard." It can be traded for a commodity such as silver. It is made with precious metals or stones.

1,3,4

Which statements correctly explain price floors and price ceilings?

1. Price floors help producers by raising prices 2. Price ceilings help consumers by lowering prices 3. Affective price floors are set above equilibrium 4. Effective price ceilings are set below equilibrium

What are the three functions that the Federal Reserve provides for the federal government?

1. acts as the federal government's bank 2. fiscal agent -- sells, redeems, and pays interest on government securities (treasury notes, bonds, and bills) 3. responsible for putting newly printed paper currency and newly minted coins into circulation

How long are the governors appointed for?

14 years

How many goods must be supplied to achieve equilibrium?

15

This table shows the production possibility schedule for several toothpaste companies.Use the numbers to place the companies in order of greatest comparative advantage to least comparative advantage in producing small tubes of toothpaste.

2, 1, 3, 4

What are economic challenges that governments must face? Check all that apply. 1. threats of war 2. unemployment 3. low production 4. inflation 5. low voter turnout

2, 3, 4

Which challenges faced by an economy are examined in macroeconomics? Check all that apply.

2.3.5

Which are examples of sole proprietorships? Check all that apply. lawyers working for a corporation doctors in a partnership independent workers franchise restaurants in a partnership tax preparer working his own business freelance writers

3,5,6

How many governors are there on the board?

7 governors

A state's sales tax is an example of a

??? not progressive tax

IRS collects?

???????not FICA tax

You received a $50,000 inheritance and placed it in a savings account. If you withdraw $10,000?

????not pay income tax on 10,000

What is social science?

A branch of science that studies the society and human behavior in it, including anthropology, communication studies, criminology, economics, geography, history, political science, psychology, social studies, and sociology.

Which scenario is the best example of an opportunity cost?

A computer company produces fewer laptops to meet tablet demand.

What is a Fixed Cost?

A cost of business which does not vary with output or sales; overheads.

What is Variable Cost?

A cost that changes with the change in volume of activity of an organization.

How does international trade best benefit specialization?

A country can make and sell goods affordably and buy goods it cannot make.

How does specialization enable countries to trade with one another?

A country can make and sell goods affordably and buy goods that it is inefficient at making.

Which situation is the best example of opportunity cost?

A country chooses to produce bananas instead of wheat.

In which situation would government regulation most likely be necessary?

A factory requires employees to work in unsafe conditions.

Which is one important difference between a general partnership and a limited partnership?

A limited partnership allows some business decisions to be made individually.

Who is following the law when it comes to protecting investors' funds?

A mutual fund advisor who informs investors about risks.

The highest amount a landlord can charge for rent is an example of what?

A price ceiling

The graph examines the market for graphic T-shirts. Based on the graph, which event could cause the change shown?

A product becomes less popular and fewer customers purchase it.

What is a pure market?

A pure market economy is one perfectly free of external control. Individuals are left up to themselves to decide what to produce, who to work for, and how to get the things they need.

A monopoly is a market that has

A single supplier of a good or service

A monopoly is a market that has...

A single supplier of a good or service

Which situation is the best example of competition in an economic system?

A small CD store slashed its prices to attract customers from a larger store that sells CDs and DVDs.

What is a mixed economy?

A system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies.

What is a supply chain?

A system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer.

What the difference between a tax deduction and a credit?

A tax credit directly lowers your tax bill, while a tax deduction lowers your taxable income, so the value depends on what tax bracket you fall into

The graph shows households with Internet access from 2003 to 2013. How has Internet access changed and affected globalization from 2003 to 2013?

A thirty percent increase in Internet access has sped up globalization.

According to the business cycle, what characteristic indicates that a depression has been reached?

A trough has occurred.

Why does the Fed pay interest to banks? It is interest on money held in reserve. It is interest on credit available to the Fed. It is interest on loans taken by the Fed. It is interest on government investments.

A) It is interest on money held in reserve.

What is the full name of the US central bank, known as the Fed? the Federal Reserve Bank the Federal Deposit Insurance Corporation the Federal Financial Institution the Federal Bank

A) the Federal Reserve Bank

Which statement best explains the role of producers in economics?

A. Producers supply goods and services.

During a recession, what is one way governments try to encourage growth?

A. by increasing unemployment benefits

Both a demand curve and a demand schedule show how

A. prices affect consumer demand.

Which of the following would be a producer?

A. someone owning a book store

Tax returns must be filed by?

APRIL 15

According to the law of supply, price and quantity move

Along a track in the same direction

What is capital?

Already-produced durable goods available for use as a factor of production, such as steam shovels (equipment) and office buildings (structures).

Which is an example of how a denomination is divisible?

An American dollar is equal is equal to 4 quarters.

Which is an example of how a denomination is divisible?

An American dollar is equal to four quarters.

What is inflation?

An increase in the general level of prices or in the cost of living.

Which best describes the economic impact of defaulting on bank loans?

As a result of defaulting on bank loans, the economy suffers because banks have less money to loan others.

How do changing prices affect supply and demand?

As price decreases, supply decreases, but demand increases.

Describe Entrepreneurship:

Assembling of resources to produce new or improved productions and technologies. This is not just a matter of what resources you have but also of how well you use them.

The government has the right to own all land, buildings, and factories in a

B. command economy

Which of the following is a characteristic of the prosperity phase of the business cycle?

B. high levels of production

How do bank loans help the nation's economy?

Bank loans help the economy by allowing businesses to expand and improve.

Missing one payment may cause borrowers to

Be charged a late fee

Why does the U.S import oil?

Because it does not produce enough oil

BLANK are depth certificates that are purchased by an investor

Bonds

What is one way in which bonds do not generate income for investors? Bonds appreciate in value. Bonds pay interest. Bonds pay dividends. Bonds pay a specified amount at maturity.

Bonds pay a specified amount at maturity.

How are subsidies similar to tariffs?

Both aim to disadvantage imports.

Voluntary Exchange How does the principle of voluntary exchange operate in a market economy?

Both buyers and sellers must believe that something they want has more value than the money or products they want to give up.

What evidence does the author use to argue against the claim that "free markets are driven by greed"?

Business owners are driven by personal success, not profits.

Which scenario best reflects the relationship between production and demand in a recession?

C. Car dealerships cannot sell their stock.

If supply for a product is low but demand is high, what most likely needs to happen to achieve equilibrium?

C. The supply needs to be raised.

Which region is most likely to export bananas to the United States?

Central America

Mixed Economy Examples:

China (traditional, command and market); Norway (market and socialism); Cuba and N. Korea (Socialism, but developed into command)

The most common measure of inflation is a statistic called the

Consumer Price Index

Which best summarizes how consumer demand changes?

Consumer demand changes often based on many factors.

Which best summarizes how consumer demand changes?

Consumer demand changes over time based on many factors

Which statement best describes the impact of scarcity? People are able to meet most of their needs. Consumers must pay higher prices for many items. Governments must try to meet the wants of citizens. Economies can work to provide more goods and services.

Consumers must pay higher prices for many items.

The chart shows a combined supply and demand schedule. According to this table, what will happen when the price of a pair of shoes rises from $100 to $125?

Consumers will want to buy fewer pairs of shoes.

_____ monetary policy involves decreasing the money supply.

Contractionary

monetary policy involves decreasing the money supply.

Contractionary

Which accurately explains how profit is calculated?

Costs are subtracted from revenues.

Which best describes how culture can influence consumer behavior?

Cultures have traditions that involve consuming specific goods or services.

Which food truck has the absolute advantage?

D. Lunch on the Go

In a competitive market, an electronics company releases a smartphone that is much faster than older models. This is an example of

D. creating an innovative product.

A chart that shows the connection between consumer demand and price is a

D. demand schedule

To create the proper tone for an argumentative essay, a writer should

D. use a straightforward approach.

As a result of decreased production, David lost his job designing cars. Which terms can be used to describe David? Check all that apply.

David can be described as cyclically unemployed and unemployed.

What are the signs of low inflation

Demand steadily rises Prices continue to increase The economy grows in a healthy way

How does demand-pull inflation differ from cost-push inflation?

Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.

Which best explains why some people get life insurance and others don't?

Different people are willing to face different kinds of risks.

When prices drop below the point where supply and demand meet, it results in

Disequilibrium

Which question can most help a writer revise an argumentative essay? What is the topic to be addressed? What is the main purpose of the essay? Do details provide support for the claim? Which subject will help explain the position?

Do details provide support for the claim?

What is the best definition of economic data? Economic data is information used for calculation, analysis, or planning. Economic data is the fastest time it takes to use the fewest resources. Economic data is knowledge that can be applied to create solutions. Economic data is a determination based on patterns and evidence.

Economic data is information used for calculation, analysis, or planning.

Which is the best definition of elasticity in economics

Elasticity of demand measures how the amount of a good changes when it's distribution expands

What is the best definition of elasticity in economics?

Elasticity of demand measures how the amount of a good changes when its price goes up or down

What is the best definition of elasticity in economics

Elasticity of demand measures how the amount of a good changes when its price goes up or down.

Which is true about investments and risk? Low-risk investments have a high return over the long run. High-risk investments usually fail. Safe investments are always somewhat profitable. Every investment carries some degree of risk.

Every investment carries some degree of risk.

A company in Maine sends lobsters to France. What is this an example of?

Exporting

When does external balance occur?

External balance occurs when exports roughly equal imports over the long run.

If the market for soccer balls is saturated and the market for soccer nets is open, which combination makes the most sense for Sabrina's Soccer?

F

Supply: elasticity, inelasticity, competition, ability to produce

Factors that affect supply

When supply is higher then demand prices will

Fall until the demand rises

The _______ rate is the interest rate banks charge each other for borrowing or storing money.

Federal funds

When applying for credit, what information should borrowers research?

Fees Interest rates Introductory rates

Read the graph. What can the reader reasonably conclude from information in the graph?

Fewer new businesses were started in 2010 than in other years

With which statement would President Bill Clinton most likely have agreed?

Free trade helps every nation.

Which best describes the difference between the views of Milton Friedman and John Maynard Keynes on the economy?

Friedman said that monetary policy should be used to influence aggregate demand, while Keynes believed the best approach was fiscal policy.

This table shows the cost of producing ice cream for several manufacturers. Which manufacturer has the absolute advantage?

Frozen Treats

Which manufacturer has the absolute advantage?

Frozen Treats

Why did Friedrich Hayek call expansionary spending dangerous?

He felt it could lead to inflation and poor decisions by consumers.

Which statement best describes how globalization connects the world

Globalization helps create new forms of transportation, communication, and technology.

Which explains how Google has become a household word?

Google has been successful at associating its service with the generic act of searching the Internet.

Which statement indicates why Google has been successful at branding?

Google is a corporate name that has become a common term for "search the Internet."

Which body or group is most able to use money to influence the economy

Government

Mixed Economy: Who decides WHO, WHAT and FOR WHOM?

Government or Tradition and Market.

What part does interest play in deficit spending?

Governments must pay interest on money they borrow when they take on debt.

COnsumer demand is defined as

HOw much of something people want

One fact about all currency is that it

Has a change in value

When in flation is ____ the feds aim to slow economy

High

Why is competition limited in an oligopoly?

High entry costs prevent new producers from entering the market.

The circular flow model examines interactions between two groups?

Household & Firm

Why might buying a home during a recession be a good decision for some consumers? Check all that apply.

Housing prices are down. Less demand means more options for buyers. Less demand means less competition with other buyers.

The diagram shows the three-step process by which economic policy is created. Which is the best label for the first step in the process?

Identify a problem.

Which is the best label for the first step in the process?

Identify a problem.

It takes brothers John and Dan the same amount of time each to clean the room they share, but Jon can mow the lawn faster than Dan. Which action would give them a comparative advantage.

If John mowed the lawn and Dan clean their room

In regard to trade, United States

Imports and exports goods and services

Which statement correctly compares the two businesses?

In Case will require a less costly investment in labor, while Wrap It Up will require less capital in the long term.

What did President Ronald Reagan believe about economic growth?

Increased production and fair trade would help the economy.

Which statement best describes incentives? Incentives are mostly positive. Incentives are mostly negative. Incentives can be positive or negative. Incentives are neither positive nor negative.

Incentives can be positive or negative.

The graph shows an early economic theory known as the "invisible hand." Which best describes the idea behind the "invisible hand"?

Individuals seeking their own self interest benefit the economy as a whole.

Which statement describes how borrowers will most likely benefit when the Fed reduces reserve requirements?

Interest rates will likely decrease.

What is one counter-argument to the premise that the wealth gap is a serious problem which needs to be addressed? The lower classes have the opportunity to invest. Poor people can easily move into the middle class. Investments by the upper class create lower-class jobs. Buying power sharply increases for the working class.

Investments by the upper class create lower-class jobs.

Which statement best describes how the Fed's use of open market operations affects banks?

It affects banks' liquidity.

What characteristics does the United States economy have that allows it to resolve conflicts among goals?

It allows choices, accommodates compromises, and satisfies most people most of the time.

Which statement best describes how the Fed responds to recessions?

It buys more securities.

Which statements describe how the Fed responds to high inflation?

It charges banks more interest It sells more securities It decreases the money supply

Which statements describe how the Fed responds to high inflation? Check all that apply.

It charges banks more interest. It sells more securities. It decreases the money supply.

What role does competition play in international trade

It drives down prices for consumers

What role does competition play in international trade?

It drives down prices for consumers

What role does competition play in international trade?

It drives down prices for consumers.

Which of the following statements about opportunity cost are true? CHECK ALL THAT APPLY.

It exists because resources are scarce. It influences consumers. It influences producers.

Which best describes what a subsidy does?

It keeps the price of domestic goods relatively low.

Why is it not ideal to get a refund on your taxes each year?

It means you are having too much withheld, and you could instead earn interest on that money

Which needs to happen to the price indicated by p2 on the graph in order to achieve equilibrium?

It needs to be decreased.

Why is the Fed often referred to as a "lender of last resort," or the last lender to turn to in a crisis?

It offers banks financial protection to keep consumers from panicking.

The General Theory of Employment, Interest and Money was written by

John Maynard Keynes

What is labor?

Labor is a measure of the work done by human beings to create a manufactured output.

In the circular flow model factors of production flow to firms. What are the following are primary factors of production

Labor, capital, and land

What is scarcity?

Lack of enough resources to satisfy all desired uses of those resources.

In the United States, the government creates laws and regulations that business activities to prevent wrongdoing

Limit

Why do developing countries usually have less variety in their economic activities? Limited access to education means that people are not trained to work in industry or technology. Focusing on one or two economic activities leads to more rapid economic development. Developing countries are usually small and have limited populations and resources. People prefer the lifestyle that accompanies traditional activities such as farming.

Limited access to education means that people are not trained to work in industry or technology

Why do developing countries usually have less variety in their economic activities? Limited access to education means that people are not trained to work in industry or technology. Focusing on one or two economic activities leads to more rapid economic development. Developing countries are usually small and have limited populations and resources. People prefer the lifestyle that accompanies traditional activities such as farming.

Limited access to education means that people are not trained to work in industry or technology.

When discussing comparative and absolute advantage, which best describes specialization?

Limiting the types of goods and services produced

What makes enforcing safety standards a challenge for the Food and Drug Administration?

Many foods are imported from other countries, and the FDA must ensure those foods meet the same standards as US goods.

An economic system where people set the price for their needs/wants/goods based on supply and demand and the people determine the prices; typically seen in post-industrialized societies.

Market

In this economy, supply and demand are the only determining factors in someone's ability to choose a good/service. There is much competition among businesses and individuals select goods/services based on the quality and best price.

Market

What do microeconomics and macroeconomics both focus on?

Microeconomics and macroeconomics both focus on the allocation of scarce resources. Both disciplines study how the demand for certain resources interacts with the ability to supply that good to determine how to best distribute and allocate that resource among many consumers.

What does microeconomics assume?

Microeconomics assumes businesses are rational and produce goods that maximize their profit.

In this economy, the Government has some limitations on the ability of individuals to own private property.

Mixed

Mixed Economy: Characteristics

Most countries are a mixed economy. Political an economic systems vary from country to country.

Your parents gifted you $10,000 in cash. Which is true?

Neither party pays a gift tax

Which is the best example of opportunity cost?

NOT A country that chooses to invest in manufacturing and agriculture.

Which situation is the best example of regulation in an economic system?

NOT A retail business just opened a new store in a community close to its original location.

Why do countries provide financial incentives?

NOT Financial incentives set standards.

Does a depression always follow a recession

No I depression is indicated when the recession is expedition chili long

Does a depression always follow a recession? Yes, the trough is always considered a depression. No, a depression is indicated only when the trough is sufficiently low. Yes, for recovery to occur, the trough must be reached. No, the economy could decline quickly and bypass recession.

No, a depression is indicated only when the trough is sufficiently low

If expansionary taxation policies encourage growth, are they always appropriate to implement?

No, government services could create inflation, which decreases the purchasing power of consumers.

Command Economies Examples

North Korea, Cuba, the former Soviet Union, and the People's Republic of China.

Who sets the price in a monopolistic competition?

Not producers only

Which best states the main difference between a monopoly and an oligopoly?

Oligopolies involve more than one company while monopolies involve only one.

On the national level, what do macroeconomics hope that their models help address? (two key areas of research)

On the national level, macroeconomists hope that their models help address two key areas of research: the causes and consequences of short-run fluctuations in national income, otherwise known as the business cycle, and what determines long-run economic growth.

What is a progressive income tax system?

One in which the tax rate increases as the amount of taxable income increases

What is one of the major goals of microeconomics?

One of the major goals of microeconomics is to analyze the market and determine the price for goods and services that best allocates limited resources among the different alternative uses.

The graph shows price and total output in the short and long run. According to this graph how does supply behave in the long run

Out put remains constant.

What is output?

Output is the quantity of goods or services produced in a given time period, by a firm, industry or country.

Which best describes Income tax?

Paid by businesses or individuals on money they make

Which best describes Sales tax?

Paid to state and local governments on purchased goods and services

Which best describes Property tax?

Paid to state or local governments based on the assessed value of property

Which is an advantage of partnerships over sole proprietorships?

Partnerships generally have more money to invest in starting or expanding a business.

Which most likely results from producers engaging in specialization?

Producers reduce their costs.

Which describes an example of the economic system known as free enterprise?

People are free to shop for the best price on products because there is open competition.

State how people and businesses benefit from economic freedom.

People can choose their employer, where and when they work, and how they spend their money. Businesses hire the best workers, and decide what and how to produce and what prices to charge.

Which explains how elastic demand would most likely affect consumer demand?

People might buy a less expensive substitute good

What are the advantages of a planned economy?

Planned economies have several advantages. Ideally, there is no unemployment, and needs never go unfulfilled; because the government knows how much food, medicine, and other goods is needed, it can produce enough for all.

How do you consumers feelings about the economy help contribute to growth

Positive consumer attitudes influence spending habits

How do consumers' feelings about the economy help contribute to growth?

Positive consumer attitudes influence spending habits.

Economic patterns help economists make forecasts, which are also called _____________.

Predictions

Which statements correctly explain price floors and price ceilings?

Price floors help producers by raising prices Price ceilings help consumers by lowering prices Effective price floors are set above equilibrium Effective price ceilings are set below equilibrium

marginal benefit

Price of producing one additional unit of a good

When does price stability occur?

Price stability occurs when prices remain largely stable and there is not rapid inflation or deflation.

Which most likely results from producers engaging in specialization? Producers reduce their costs. Producers increase their market share. Producers decrease the materials needed for production. Producers always offer more competitive pricing

Producers reduce their costs.

Which statement best explains the role of producers in economics

Producers supply goods and services

Which statement best explains the role of producers in economics?

Producers supply goods and services

In which way to prove try to differentiate themselves in monopolistic competition?

Product features

Interest on an investment is considered

Profit

What is regulation in an economic system? Regulation is the placing of limits or restrictions on business activity by the government. Regulation is the placing of limits or restrictions on business activity by producers. Regulation is the removal of limits or restrictions on business activity by the government. Regulation is the removal of limits or restrictions on business activity by producers.

Regulation is the placing of limits or restrictions on business activity by the government.

What is autonomy?

Self-government; freedom to act or function independently.

Which best explains why some people invest their savings in the stock market and others put their savings in bank accounts?

Some people feel that the stock market is too risky for them.

What is input?

Something fed into a process with the intention of it shaping or affecting the outputs of that process.

Which best describes how standards help domestic producers?

Standards require goods to meet basic requirements.

GRAPH: The map shows GDP per capita in the United States for a given year. What conclusion can someone draw from the map?

States with the lowest per capita GDP tend to be in the South.

The map shows GDP per capita in the United States for a given year. What conclusion can someone draw from the map?

States with the lowest per capita GDP tend to be in the South.

Which are the roles of a bank? Check all that apply.

Storing and holding money Lending money Investing in the economy

Jim lost his job in a car assembly factory to a robot and his skills will no longer be needed. Which terms can be used to describe Jim? Check all that apply.

Structurally unemployed (4), Unemployed (6)

There are no

Substitutes in monopoly

In microeconomics, price helps determine both supply and demand. Which other factors also help determine each?

Supply is determined by production costs, and demand is determined by need for the product.

When does Sustainability occur?

Sustainability occurs when an economy achieves a rate of growth which allows an increase in living standards without undue structural and environmental difficulties.

A(n) is a tax issued by the federal government on imported goods.

Tariff

When inflation is _____ , the Fed aims to slow the economy.

high

Items that reduce the amount of income subject to taxes, such as home mortgages, are called?

Tax deductions

What is the best definition of technology? Technology is replacing human workers with mechanical or electronic devices. Technology is applying scientific knowledge to find answers and fix problems. Technology is using fewer resources to manufacture goods more efficiently. Technology is hiring workers from all over the world to manufacture goods.

Technology is applying scientific knowledge to find answers and fix problems.

What is microeconomics?

That field that deals with the small-scale activities such as that of the individual or company. Microeconomics deals with the economic interactions of a specific person, a single entity, or a company. It is the study of markets.

Which manufacturer has the absolute advantage?

The Dairy

What role does the Federal Reserve play? Check all that apply.

The Federal Reserve plays the role of regulating the banking industry, loaning money to banks, and transferring any profits to the Treasury

Which statement explains a way how the securities and exchange commission upholds fair business practices?

The SEC generally oversees financial advisers

The map shows the world's gross domestic product. Based on the map, which is the best conclusion that can be drawn about the economies of the US and China?

The US and China are strong because they have a high gross domestic product.

What is marginal benefit?

The additional benefit from taking a course of action.

What is marginal cost?

The additional cost from taking a course of action.

What is producer surplus?

The amount that producers benefit by selling at a market price that is higher than the lowest price at which they would be willing to sell.

Motherboard Inc., manufactures computer parts. The company's total revenue is what?

The amount the company receives from the sale of all it's computer parts

Which statement best describes the body paragraphs of an argumentative essay? The body paragraphs acquaint readers with the topic and set up the ideas that will be presented. The body paragraphs establish the focus of the essay and tell readers what the writer's position will be. The body paragraphs tie the essay together and tell readers what they have learned and should take away. The body paragraphs flesh out the argument and include counterclaims and evidence from research.

The body paragraphs flesh out the argument and include counterclaims and evidence from research

Which statement best describes the body paragraphs of an argumentative essay?

The body paragraphs flesh out the argument and include counterclaims and evidence from research.

Which describes the process of how a business incorporates?

The business must gain government permission and issue a stock sale, followed by a shareholder vote.

Why are utilities, such as electricity and water, examples of natural monopolies?

The cost of production restricts competition in the market

Why are utilities, such as electricity and water, examples of natural monopolies?

The cost of production restricts competition in the market.

How does a counterclaim help support a writer's position in an argumentative essay?

The counterclaim shows how the opposing opinion is incorrect.

What is one consequence of stagflation? The economy drastically slows down as money loses its buying power. Producers cannot keep up with consumer interest and raise their prices. There are not enough workers to meet the rising level of production. Demand is too high and people spend more money than they should.

The economy drastically slows down as money loses its buying power.

Which of the following conditions is most indicative of recovery?

The economy is growing again.

Which statement best describes the introduction of an argumentative essay? The introduction acquaints readers with the topic and sets up the ideas that will be presented. The introduction establishes the focus of the essay and tells readers what the writer's position will be. The introduction ties the essay together and tells readers what they have learned and should take away. The introduction fleshes out the argument and includes counterclaims and evidence from research.

The introduction acquaints readers with the topic and sets up the ideas that will be presented.

How would a manufacturer benefit by using fewer scarce resources? The product would be less expensive to produce. The product would better satisfy consumer needs. The product would be popular and readily available. The product would provide a more satisfactory profit.

The product would be less expensive to produce

When does the profit-maximizing amount of output occur?

The profit-maximizing amount of output occurs when the marginal cost of producing another unit equals the marginal revenue received from selling that unit.

Which best explains the law of demand

The quantity demanded by consumers decrease as prices rise, the increases as prices fall

The level of investment and market often indicates

The state of the economy

What are economics?

The study of how best to allocate scarce resources among competing uses.

What term is used in macroeconomics to describe the total supply and the total demand?

The term used to describe total supply and demand is aggregate.

Which statement best compares the laws of supply and demand?

The two economic laws exist in theory. They work in practice, but real-world factors can have an effect.

What are two elements of microeconomics?

The two key elements of this economic science are the interaction between supply and demand and scarcity of goods .

Which statement best describes how globalization is affecting the world

The world is becoming more globalized and connected

Explain how a market economy determines who will receive the benefits from what is produced and sold.

Those who act in their own best interests will receive the benefits.

An economic system where people obtain their needs/wants/goods through a barter or trade where the exchange sets the terms of the trade; typically seen in agricultural societies.

Traditional

In this type of economy, Government has no role in the ability of individuals to trade/barter for what they need.

Traditional

Which type of economy is being represented by this image?

Traditional

A federal tax form issued by employers that shows how much an employee was paid in a year?

W-2

A __ form must be filled out when someone is hired for a job to determine how much income tax will be withheld.

W-4

What are the three Core Choices?

WHAT to produce with limited resources, HOW to produce the goods and services we select, and FOR WHOM goods and services are produced.

Emma has decided that she needs to assess the risk and return of buying a new laptop for school. Which of these practical questions should she ask herself to assess the risk? Check all that apply. What will I use the laptop for? Will the laptop likely have technical issues? Should I buy a different model? Would it be better for me to buy a desktop computer? Will I need to buy software to use the computer? Is this the best laptop available? Is the laptop worth the money?

What will I use the laptop for?, Will the laptop likely have technical issues?,Will I need to buy software to use the computer?, Is the laptop worth the money?

What is the name of the period when an economy begins to shrink?

When an economy begins to shrink it is called recession.

Which is the best question for Joe to ask himself when deciding whether to open a checking or savings account? Is there an ATM near my home or work? Does the bank offer free checking? If I need a loan, will they give it to me? Why am I opening a bank account?

Why am I opening a bank account?

How can the use of new technology in industry benefit workers? Workers can react to economic change quickly. Workers can identify economic emergencies. Workers can gain new knowledge and skills. Workers can make economic forecasts.

Workers can gain new knowledge and skills.

Which form of government insurance provides assistance to people who become injured on their jobs?

Workers' compensation insurance.

Which group primarily helps settle trade disputes?

World Trade Organization

If expansionary taxation policies encourage growth, are they always appropriate to implement?

Yes, the government will still ensure that individuals and businesses continue to receive all necessary services.

A regressive tax takes the largest percentage of income from which group?

low-income

Franchises are attractive to business owners because they have a proven business model. they are typically inexpensive to buy. they get to keep all profits. they come with very little risk.

a

The General Theory of Employment, Interest and Money was written by a. John Maynard Keynes. b. Adam Smith. c. Milton Friedman. d. Friedrich August von Hayek.

a

Which of the following statements most accurately describes the federal government and its employees? a. Millions of Americans work for the federal government. b. The federal government is not allowed to hire employees. c. The majority of Americans are employed by the federal government. d. The number of federal employees is too small to affect government spending.

a

Which of these is most likely the US government's aim in taxing imported goods? a. to protect domestic businesses b. to decrease international trade c. to end reliance on foreign goods d. to make US markets less desirable

a

Among the changes that labor reformers wanted after the Industrial Revolution was

a ban on child factory workers

Ivan works for an automobile factory that exports cars around the world. The government manages the factory, and he lives in housing provided by the city. Ivan most likely lives in a closed economy with limited government regulation. a pure market economy with no government regulation. a command economy with heavy government regulation. a mixed market economy with some government regulation.

a command economy with heavy government regulation.

multinational corporation

a company that does business in two or more nations

Interdependent

a condition by which different things rely on each other for support

Which is an example of a country that is overly dependent on another country for critical goods and services?

a country that imports all its oil

Which is an example of a positive incentive for consumers?

a coupon clipped from a newspaper

opportunity

a favorable occasion to complete or participate in something

When an oligopoly exists, how many producers dominate the market?

a few

As a protector,

a government may pass and enforce laws meant to prevent the abuse of consumers and workers.

Public policy can be best defined as

a. a course of action the government takes in response to an issue or problem.

In a free enterprise system, governments address public problems through policy to ensure that

a. citizens' needs are met and protected.

An entrepreneur conducted many experiments in a project without success. What characteristic must this person have to succeed?

an ability to learn from mistakes

Which characteristic of a successful entrepreneur does Edison exhibit in this quote?

an ability to learn from mistakes and adapt to new knowledge

A country that makes a product more inexpensively and efficiently than another country has

an absolute advantage.

treaty

an agreement created to reach a compromise

tax

an amount taken from income or added to purchases by various levels of government

monetarism

an economic theory that promotes stability through influencing the money supply

mixed-market economy:

an economy that has some government intervention

On this graph, the bottom horizontal line represents

an effective price ceiling set below equilibrium.

Free enterprise

another term used to describe the American economy.

Most of the time, people, businesses, and government

are able to work out conflicts among goals.

A disadvantage of forming a partnership is that owners

are fully responsible for their partners' losses.

A(n) _______ essay expresses and defends an opinion or position.

argumentative

Friedrich Hayek believed that people change their demand behaviors

as prices increase

An entrepreneur who opens a franchise must

assume debts.

Which unemployment rate do most economists consider to be acceptable?

b. 5%

Through the successful study of personal finance, an individual will be

better prepared for potential problems.

Which document determines the number of shares a company can sell? a stock prospectus an annual bill of rights a corporate charter an annual report

c

Which of these best describes income tax? a. regressive tax b. progressive tax c. direct tax d. proportional tax

c

When a company produces goods for sale, those goods must be

created in ways that meet consumer demand.

When an economy suffers from low production, a country cannot

d. enjoy a steady rate of economic growth.

On a graph, when demand _________ , the demand curve shifts to the left.

decreases

A new business should be based on an entrepreneur's individual interests because the entrepreneur must

dedicate as many hours as needed to the work.

high government expenditures can lead to a bigger

deficit

High government expenditures can lead to a bigger

deficit.

A limited amount of goods available means that excess demand ______________________ is occurring.

demand

The amount of goods and services consumers want is called the

demand

A _________________ is a graph that shows how prices affect consumer demand.

demand curve

Critics of the wealth gap might argue that economic growth will likely decline over time. the upper classes cannot help create new jobs. the wealthy become unable to make investments. buying power exceeds the supply from producers.

economic growth will likely decline over time.

When economists determine that a nation's GDP has declined, they can point to this as a sign of

economic shrinkage

Explain how society resolves the conflict among goals which conflict.

economic system is flexible, allows choices, and accommodates compromises

A specific territory or zone that has laws and regulations different from the rest of the country is called a(n)

economic zone.

Which is a function of regulatory agencies?

encouraging business compliance

Bank deposits help the nation's economy by providing protection for consumers from theft. giving banks the money to loan and invest. providing protection for banks on investments. giving consumers the ability to save money.

giving banks the money to loan and invest.

COnsumers create demand for

goods and services

Consumers create demand for

goods and services

Consumers create demand for

goods and services.

which group creates regulations in mixed market economies

gov.

which statement best describes why a government's actions are important in macroeconomics?

government controls industry through policy, government is both a consumer and a producer, and government can use policy to influence the economy

What else do the district banks of the Federal Reserve do?

hold the cash reserves of depository institutions, including banks, credit unions, savings and loans; make loans to depository institutions; act as a agent for the federal government in a variety of transactions, including issuing and redeeming government securities such as savings bonds; supervise and act as a bank examiner for member banks of the Federal Reserve

Financial services provided by the Federal Reserve

holding cash reserves, processing checks, and providing electronic payments

The circular flow model examines interactions between which two groups?

households and firms

Consumer demand is defined as

how much of something people want

Consumer demand is defined as

how much of something people want.

Under a contractionary taxation policy, the government can reduce the deficit by

increasing taxes.

Which are examples of sole proprietorships? Check all that apply.

independent workers tax preparer working his own business freelance writers

Which terms best describe sales tax? Check all that apply.

indirect regressive

A builder must build fifty houses by the end of the year but he has run out of available land. Which best describes the builder's supply of houses?

inelastic

Goods that are considered to be needs tend to be

inelastic when the price changes.

Monetarism plays a role in economic growth by

influencing supply money

Which is the purpose of a budget?

keeping their expenses below their income

While revising an argumentative essay, a writer should include anecdotes and personal "I" statements. focus on including opinions more than evidence. make sure each paragraph has a clearly stated point. make the writing friendly and informal, engaging readers.

make sure each paragraph has a clearly stated point.

exploitation

making use of something in an unfair manner

The Board of Governors

manages the operation of the Federal Reserve

The Federal Reserve manages the nation's currency and money supply by manipulating interest rates and acting as a lender to banks. overseeing bank collections and payments on loans. dictating criteria and setting loan terms for banks. offering investment advice and adjusting interest rates.

manipulating interest rates and acting as a lender to banks.

The point of maximum profit is the point at which the marginal cost equals the

marginal revenue

The Google business model is most similar to the model followed by which other industry?

media

Which dominates the media industry?

media conglomerates

The area in which the law of demand best applies is

microeconomics

The area in which the law of demand best applies is

microeconomics.

Americans have varying economic goals. How have these often-competing goals modified our free enterprise economy?

modified our economy through increased government intervention in the economy in the form of programs like Social Security and laws dealing with minimum wage and child labor.

Milton Friedman led a new economic school of thought called

monetarism

According to Milton Friedman, __________ policy is the best way to influence the economy's aggregate demand.

monetary

Which best describes what injector factors bring to an economic system?

money

South Avenue Publishing produces self-help books. The company's profit is the money the company earns after paying all of its production costs. paper, binding, and other supplies the company purchases. total amount the company receives from the sale of its books. amount of money the company earns from selling a single book.

money the company earns after paying all of its production costs.

The lack of competition within a monopoly means that

monopolies set their own price

Which is a market structure that can exist in a free-market system?

monopolistic competition

What was the status of US workplace safety laws in 1900? A few states had tried to pass safety laws, but they had no public support. Most states had passed some safety laws, but enforcement varied. Most states opposed safety laws, but workers began to demand them. All states had safety laws, but no one bothered to enforce them.

not A

Fantastic Snack Company has spent months developing a new type of snack chip, but the chips are not selling. Which of the following is the most likely mistake Fantastic Snack Company made? conserving too valuable resources spending capital it did not have not researching production methods not meeting the wants of its consumers

not meeting the wants of its consumers

Which best describes the difference between preferred and common stocks? Preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights. Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights. Preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends. Common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends.

not: c

In order to compete successfully, a producer must produce goods that are

of a higher quality than those of competitors.

In order to compete successfully, a producer must produce goods that are more expensive than those of competitors. of a lesser quality than those of competitors. of a higher quality than those of competitors. created without worrying about the costs of production.

of a higher quality than those of competitors.

The Middle East is best associated with which internationally traded product?

oil

Which can be traded in a commodities market? cars computers oil clothing

oil

In economics, which is the major role of business?

organize production

At which two points will Sabrina's Soccer produce the most equal amounts of soccer balls and soccer nets?

points C and D

Which type of incentive makes it more profitable to follow a certain course of action? [______________________]

positive

Customs duty on cars produced overseas is a type of

positive incentive and subsidy. negative incentive and tariff.

Demonstrating opportunity cost is done through production analysis. possibility. calculation. research.

possibility

Producers must understand the marginal benefit of making an additional unit, which shows the

possible gain

A company in Maine sends lobsters to France. What is Maine doing? Check all that apply.

practicing international trade exporting products participating in globalization

One of the purposes of studying economics is to understand the reasons people purchase certain goods. reasons some resources become scarce. principles that apply to many personal choices. principles that influence the production of services.

principles that influence the production of services

Which group directly benefits from subsidies?

producers

One of the three main questions of economics addresses who should produce goods and services. market goods and services. receive goods and services. distribute goods and services.

receive goods and services.

under a contractionary taxation policy, the government tries to improve its finances by

reducing spending

Under an expansionary taxation policy, the government tries to stimulate economic growth by

reducing taxes.

Tax that takes a larger percentage of a lower-income and a smaller percentage of a higher income is

regressive tax system

This photo shows a label that appears on food products in the United States. This label is an example of

regulation by a government agency.

Rules ensuring that businesses offer safe products to consumers are part of a nation's

regulatory policy.

Which best characterizes the corporate culture at Google?

relaxed and non-traditional

The chart shows the marginal revenue of producing apple pies. According to the chart, the marginal revenue

remains the same as production increases.

International trade organizations promote free trade by encouraging countries to

remedy trade surpluses.

Freedom and Equity Explain the role you as a consumer must play in obtaining economic equity for yourself.

reporting unfair pricing or false advertising

The map shows GDP per capita in the United States for a given year. What conclusion can someone draw from the map?

states with the lowest per capita GDP tend to be in the South.

Which best describes what a central bank uses monetary policy to do?

steer the economy away from recession and toward growth

A corporation gives out its profits as dividends paid to whom?

stockholders

The main role of banks in the nation's economy is to

store, lend, and invest money

Which of these is a banking activity of the Fed?

storing money for banks

The main role of banks in the nation's economy is to ...

storing, lend, and invest money.

Jim lost his job in a car assembly factory to a robot and his skills will no longer be needed. Which terms can be used to describe Jim? Check all that apply.

structurally unemployed unemployment

Which business model has traditionally been used by magazines?

subscription

Products whose demand rises when another product's price increases are called

substitute goods

Products whose demand rises when another product's price increases are called

substitute goods.

Market saturation results from excess _______

supply

The amount of a good or service available in a market at a given price is known as _

supply

The total amount of a product available in a market at a given price is called the

supply

Market Economies Advantages

the ability to adjust to change; the high degree of individual freedom, the small degree of government involvement, the ability to have a voice in the economy, the variety of goods and services created, and the high degree of consumer satisfaction.

Command Economies Advantages

the ability to drastically change direction in a relatively short period of time and little uncertainty for its citizens.

compliance

the act of following established laws and guidelines

externalities

the consequences of economic decisions that affect the community at large

what gives the US government the power to collet taxes?

the constitution

marginal cost

the cost of producing one more unit of a good

Which of the following doesn't count as an itemized deduction on your income tax?

the cost of utilities like water and gas

which is an example of regulation in the auto industry?

the creation of fuel efficiency standards for cars

Which is an example of regulation in the automobile industry?

the creation of fuel-efficiency standards for cars

Which is an example of regulation in the automobile industry? the creation of fuel-efficiency standards for cars the installation of satellite radio systems in some cars the usage of multiple-year warranties to cover repairs the production of hybrid models that conserve gasoline

the creation of fuel-efficiency standards for cars

What incentive does owning private property give people?

the incentive to work harder, to save, to invest, and to succeed.

What gives commodity money its value? a government's guarantee of its value the type of material with which it is made its rate of exchange in other countries the ability to trade it for a valuable good

the type of material with which it is made

What is Opportunity Cost?

the value of the next best alternative that you could be using the resource for instead.

property taxes are usually determined based on

the value of the property

Property taxes are usually determined based on

the value of the property.

in 1776 an economics book titled ______ was published to promote the concept of free enterprise

the wealth of nations

Consumer demand is defined as

the willingness and ability people have to buy a good.

What is the purpose of the US International Trade Association? to help countries establish free trade to help businesses create viable exports to limit levels of investment in trade opportunities to limit trade opportunities for competing companies

to help businesses create viable exports

Why were savings and loans (S&Ls) originally established?

to help people buy homes

Connect

to join or bring together

In a free-enterprise system, consumers decide

which services to buy.

In a free-enterprise system, consumers decide how to set prices. which goods to export. which services to buy. how to use materials.

which services to buy.

A mixed-market economy is best defined as an economy

with some government intervention

A mixed-market economy is best defined as an economy

with some government intervention.

Which economic player is most closely associated with the dual role of consumer and producer?

worker

One consequence of automation is that producers need fewer customers. machines. materials. workers.

workers

Which best describe why countries establish limits on trade? Check all that apply.

🚫✔️◻️✔️◻️✔️ limit amount imported punish other countries by withhold trade limit influence of foreign sector

What are the two important attributes of economics?

Economics studies human activities and constructions in environments with scarce resources, and uses the scientific method and empirical evidence to build its base of knowledge.

Government officials and country and have determined that they need to take action to encourage the growth of the economy. To do this they have introduced an incentive policy that offers citizens free education. This is extended to all individuals who signed a contract agreeing to work within their specific industry for the next 10 years. The economic growth by investing in

Education to produce an appointment and increase production

How can producers maximize their profit? Check all that apply.

-They can work to decrease their marginal cost. -They can raise prices to increase marginal revenue. -They can keep marginal costs below marginal revenues.

How do economists use data? Check all that apply.

-to follow and predict unemployment rates -to explain trends in production and shipping

Which best explains why producers choose to specialize? Check all that apply.

-to gain a comparative advantage -to increase efficiency

Which best explains why producers choose to specialize?

-to increase sales -to maintain market share -to increase efficiency

A producer with a comparative advantage has the ability to produce a good or service at

....a lower opportunity cost than any competitor can.

The Davis family grows organic vegetables to sell at a local farmer's market. Which are factors that directly affect their profit? Check all that apply. an increase in the cost of farm equipment a rise in demand for organic produce an increase in customers at the market a change in the market price for non-organic fruit a sale on organic meats at the market

1,2,3

Which describes the purpose of body paragraphs in an argumentative essay? Check all that apply. to use quotations that enhance the position to establish the topic and introduce the claim to include reasons and evidence from research to add examples that support the main idea to restate the claim and provide a clear summary

1,3,4

As a result of decreased production, David lost his job designing cars. Which terms can be used to describe David? Check all that apply.

1,6

Banks make the most money and take the most risk with an interest rate of ...

18 Percent

Which challenges faced by an economy are examined in macroeconomics? Check all that apply.

2, 3, 5

What is true of representative money? Check all that apply.

2, 4

Which statements accurately describe debts and deficits? Check all that apply. 1. Debt is free and does not affect a government. 2. A government's budget deficit causes debt to increase. 3. A government's budget deficit causes debt to decrease. 4. Debt requires a government to pay back more than it has borrowed. 5. The deficit is the amount a government spends above what it brings in.

2, 4, 5

These are the four stages of the business cycle: 1. Depression 2. Prosperity 3. Recession 4. Recovery In which order do these stages occur? 1, 3, 4, 2 3, 1, 2, 4 1, 2, 3, 4 2, 3, 1, 4

2,3,1,4

Which factors must a producer consider when deciding what good to supply? Check all that apply. the appeal of the good to family members the elasticity of a good being supplied competition within the market the ability to produce the good efficiently the ability to produce a good of low quality

2,3,4

The circular flow model examines interactions between which sectors of the economy? Check all that apply.

2,3,5

What decisions does the business cycle help businesses make? Check all that apply.

2,4,5,6

Which unemployment rate do most economists consider to be acceptable?

5 percent

Which unemployment rate do most economists consider to be acceptable in the United States?

5%

According to the article, Americans make up about _____ of the world's population, but about _____ of the world's "top 1%." This means that a majority of Americans are in the _____ of all earners in the world, which is defined as those earning more than $34,000 a year. The author states that this wealth is due to America's commitment to _____

5% ; 50% top 1% free enterprise

What most likely will happen if the pie maker continues to make additional pies?

A. The marginal costs will continue to rise, increasing the total cost, while the marginal revenue remains the same, decreasing the profit.

Which quality best describes a producer with an absolute advantage?

A. efficient

An economic thinker who influenced early economists was

Adam Smith

What is the Average Total Cost?

Average cost or unit cost is equal to total cost divided by the number of goods produced (the output quantity, Q). It is also equal to the sum of average variable costs (total variable costs divided by Q) plus average fixed costs (total fixed costs divided by Q).

Which event best describes why it is difficult to sell a home during a recession?

B. Demand greatly decreases.

Which of the following events most likely explains renewed demand in a recovery period?

B. Need and, hence, demand increase as goods wear out.

Land is considered a resource because it

B. is used to produce things

This table shows the production possibility schedule for several toothpaste companies. Which company has the comparative advantage in producing small tubes of toothpaste?

Bright White

Which best describes how specialized producers decrease their opportunity costs

By limiting the types of goods produced

What is one way employers get employees to participate in a 401k?

By requiring them to participate unless they opt out

The measure of how demand changes after price adjustments is called

Elastic demnad

What role do government agencies play in a mixed market economy?

C. They regulate some aspects of production and distribution.

The highest amount a landlord can charge for rent is an example of

C. a price ceiling.

GRAPH: This graph shows merchandise export data for the years 2010 through 2012. Which statement most accurately describes the information presented on the graph?

China exported more goods than the United States from 2010 to 2012.

If consumer sovereignty is considered greatest in a system of pure competition, why is sovereignty still limited?

Choices are driven by price when goods are identical.

In this type of economy, the government eliminates all competition amongst business owners by regulating business completely.

Command

Which type of economy is being represented by this image?

Command

which best describes how consumers may benefit from specialization?

Consumers find products at lower prices

Government officials in Country M have determined that they need to take action to encourage the growth of their economy. To do this, they have introduced an incentive policy that offers citizens free education. This is extended to all individuals who sign a contract agreeing to work within their specific industry for the next ten years. Country M hopes to encourage economic growth by investing in

Country M hopes to encourage economic growth by investing in education to reduce unemployment and increase production.

On which country has the United States imposed an embargo since 1960?

Cuba

One fact about all currency is that it

Currency has a changing value.

As a result of decreased production and David lost his job designing cars which terms can be used to describe David

Cyclically unemployed and unemployment

Which best describes the role the availability of resources plays when a company is considering whether to produce a certain good?

If a resource is difficult to obtain, production costs will be high.

What are the four types of production?

Land, Labor, Capital, Entrepreneurship.

Point of Maximum Profit

Marginal cost equals the marginal revenue

Which type of economy is being represented by this image?

Mixed

Which best describes the purpose served by economic models within an economic system?

Models identify patterns.

This is a graph showing price and total output in the short and long run. According to this graph how does supply behave in the short run and long run?

Output reacts differently

What is the name of the period when an economy begins to shrink

Recession

What is increasing returns to scale?

The characteristic of production in which output increases by more than the proportional increase in inputs.

What is the Pareto efficiency?

The state in which no one can be made better off by making another worse off.

What happens to earnings in a cooperative?

They are shared with member owners.

A credit score tells a lender how

Trustworthy someone is as a borrower

The main advantage that corporations have is a. limiting liability for owners and stockholders. b. giving many owners a say in business decisions. c. being inexpensive and easy to establish. d. requiring fewer state and federal regulations.

a

What kind of economy uses a free-enterprise system?

a market economy

When might it be important to know a currency's exchange rate?

a. when planning expenses for an overseas trip

Which do media companies sell to earn money?

advertisements and subscriptions

The Federal Reserve Bank of the United States is also known as the

b. central bank.

The aim of the study of macroeconomics is to examine

b. the economy's behaviour

Which are subtracted from revenues to calculate profit?

cost

Price controls on goods can be set by

governments

Henry Ford was a successful entrepreneur because he

helped workers achieve better conditions.

As a regulator, the government works to

preserve competition.

The best conclusion that can be drawn from the graph is that the number of nonfarm jobs

started going down in 2008.

friedrich hayek believed that

the economy is too complicated to apply aggregates

maximize

to make as large as possible

Which can intensify peer pressure?

trends

A sales tax is a type of....

....indirect tax.

What role does a fast-food corporation play when it agrees to franchise its business? Check all that apply. 1. The franchisor will supply training. 2. The franchisor will license a trademark. 3. The franchisor will select a location. 4. The franchisor will pay associated fees. 5. The franchisor will supply advertising. 6. The franchisor will collect most profits.

1, 3, 5, 6

How can producers maximize their profit?

1. they can work to decrease their marginal cost 2. they can rise prices to increase marginal revenue 3. they can keep marginal costs below marginal revenues

Use the numbers to place the companies in order of greatest comparative advantage to least comparative advantage in producing large tubes of toothpaste.

4,3,1,2

Which unemployment rate do most economists consider to be acceptable in the United States?

5 percent

Which is the best example of opportunity cost?

A country that chooses to export bananas but not wheat.

What is a monopoly?

A market where one company is the sole supplier.

A possible result of disequilibrium is

A. excess demand.

Which calculation helps determine which producer has the absolute advantage?

Amount produced divided by resources used

Which group works to help members establish internal political stability?

Association of Southeast Asian Nations

In the free-enterprise system of the United States, the government

B. makes some economic decisions.

Equilibrium occurs when supply and demand coordinate to

B. set prices and production.

In a command economy, a cotton farm floods after a heavy storm. The repair work most likely will be paid by

B. the government group that runs the farm.

What are the disadvantages of a pure market?

Because there is no regulation ensuring equality and fairness, market economies are burdened with unemployment, and even those with jobs can never be certain that they will make enough to provide for all of their needs.

This table shows the production possibility schedule for several toothpaste company Which company has the comparative advantage in producing small tubes of toothpaste?

Bright White

Which company has the comparative advantage in producing small tubes of toothpaste?

Bright White

How does this information about the author influence your opinion about the reliability of this source? Discuss at least one other type of source or document that would help you analyze the benefits and drawbacks of free enterprise.

Brooks is the president of an organization founded to protect the American free enterprise system. As a result, he is likely biased toward free enterprise and will be more likely to argue in its favor without considering its drawbacks. Another source that would be helpful would be an article that describes the negative economic and social characteristics of free enterprise.

Which statement is supported by information in the graph?

Businesses in some industries have a greater chance of survival than in others.

What is the best definition of elasticity in economics?

C. Elasticity of demand measures how the amount of a good changes when its price goes up or down.

The graph demonstrates that changes and investment

Can show of the economy is growing or shrinking

What is Capital?

Capital, otherwise known as capital assets, are manufactured goods that are used in production of goods or services.

A pure market economy is sometimes called pure ____________.

Capitalism

The graph shows merchandise export date for the years 2010 through 2012. Which statement most accurately describes the information presented on the graph?

China exported more goods than the United States from 2010 to 2012.

Which best explains why the law of supply operates the way it does in a free enterprise economy?

Companies want to be as profitable as possible.

Which best describes how consumers may benefit from specialization?

Consumers find products at lower prices.

Which best describes how consumers may benefit from specialization?

Consumers have more price options.

Which statement best describes how the Fed responds to recessions? It sells more securities. It charges banks more interest. It increases reserve requirements. It increases the money supply.

D) It increases the money supply

There are four stages in an economic recovery. 1. increased production 2. rising demand (occurs twice) 3. increased hiring In which order do these stages occur?

D. 2, 1, 3, 2

A clothing store has ordered a new supply of jeans for the fall season and wants to sell off the remaining items from the previous spring. What action would the store owner most likely take?

D. The store owner would most likely lower the price of the spring jeans to encourage consumers.

What is an example of goods?

D. a computer game

Look at the chart comparing the price of graphic T-shirts to the quantity supplied. This chart is an example of a

D. supply schedule.

Describe Capital:

Final goods produced for use in production of other goods and services. THIS IS NOT MONEY Includes equipment and structures such as factories, production machinery, and fleet vehicles.

Why do countries provide financial incentives?

Financial incentives set standards.

"Everyone's rights should be protected" is an argument_________________.

For regulation.

Which best describes the standards required of foreign producers?

Foreign producers must meet the same standards as domestic producers.

What led to Henry Ford's success as an entrepreneur?

His innovative production methods.

What does IRS stand for?

Internal Revenue Service

How does a production possibility chart assist in outlining opportunity cost? It compares profit potential of one product to another. It compares production cost of one product to another. It compares production numbers of one product to another. It compares consumer demand of one product to another.

It compares production numbers of one product to another.

Read a passage from a speech given by President Barack Obama. Because of this plan, families who are struggling to pay tuition costs will receive a $2,500 tax credit . . . And Americans who have lost their jobs in this recession will be able to receive extended unemployment benefits. -President Barack Obama, February 4, 2009 Which statement best explains this passage? It describes government measures to stimulate demand and bring about a recovery. It describes government measures to increase production and bring about a depression. It describes a shift in government policies during a trough on the business cycle. It describes a shift in government policies during a peak on the business cycle.

It describes government measures to stimulate demand and bring about a recovery.

Which of the following statements about opportunity cost are true? CHECK ALL THAT APPLY. It exists because resources are scarce. It influences consumers. It influences producers. It assists in anticipating profits. It encourages people to spread their resources around.

It exists because resources are scarce, it influences consumers, it influences producers

Which best explains how the law of demand affects consumers?

It helps consumers producers when prices are too high

Failure to address the three questions of economics will have what kind of impact on an economy? It will have no consequences. It will help meet citizens' needs and wants. It will have negative consequences. It will help contribute to the success of the society.

It will have negative consequences.

How can a nation benefit from effectively exporting its goods?

Its businesses can invest in the future.

How can a nation benefit from effectively exporting its goods?

Its domestic spending increases.

the General Theory of Employment, Interest and Money was written by

John Maynard Keynes

What two key areas of research do Macroeconomics hope that their models help address?

Macroeconomics hope that their models help address two key areas of research: the causes and consequences of short-run fluctuations in national income (otherwise known as the business cycle) and what determines long-run economic growth.

What does Microeconomics study?

Microeconomics studies the behavior of individual households and firms in making decisions on the allocation of limited resources. Another way to phrase this is to say that microeconomics is the study of markets.

In this economy, the role of government is limited. That is to say, government can regulate some aspects of business, but it does not have control over all aspects of business.

Mixed

The degree to which quantity demanded changes after a price change is called

NOT consumer demand

A purpose of government regulation in a mixed-market economy is to protect

NOT corporate rights

The federal reserve manages the nation's currency and money supply by....

NOT dictating criteria and setting loan terms for banks

One primary purpose of the European Union is to

NOT eliminate borders between countries. NOT establish a free trade zone in the marketplace.

The Free Trade Agreement Tariff Tool allows US businesses to

NOT know which countries are entering trade associations. access tariff rates when planning to export.

GRAPH: These circle graphs show information about Bolivia's workforce and GDP. What do the graphs indicate about Bolivia's labor force?

NOT: Most people in Bolivia work in agriculture.

A regulatory agency that protects workers is

OSHA

A regulatory agency that protects workers is

OSHA.

Describe some of the economic choices people and producers in the United States are free to make.

People choose their own occupations, employers, and uses for their money; producers choose where/how they produce.

What might happen if an economy is unable to produce wanted goods and services?

People will look elsewhere for them.

In microeconomics, what occurs when equilibrium is reached?

Prices are set

In microeconomics, what occurs when equilibrium is reached?

Prices are set.

Which describes a way in which consumers most likely benefit from producers absolute advantage?

Prices decrease as a result of increased production efficiencies.

Which describes a way in which consumers most likely benefit from producers' absolute advantage?

Prices decrease as a result of increased production efficiencies.

Which describes a way in which consumers most likely benefit from producers' absolute advantage?

Prices decrease as a result of increased production eficiencias.

Which best describes how producers benefit from specialization?

Producers can increase their profits.

Why is pure competition considered an unsustainable system?

Producers cannot make a profit if they keep dropping their prices

Cost push inflation occurs when

Producers need more money to make and distribute goods

Which most likely results from producers engaging in specialization?

Producers reduce their costs

New technology in ______________ allows producers to use materials from all over the world to manufacture goods.

Shipping

When a country chooses to limit the kinds of goods or services it produces, it is practicing

Specialization

In 1776, an economics book titled ... was published to promote the concept of free enterprise.

The Wealth of the Nations

What is utility?

The ability of a commodity to satisfy needs or wants; the satisfaction experienced by the consumer of that commodity.

Tasty Treat Tea is a popular iced tea drink. When the manufacturer begins to use imported tea leaves, the price rises by 10%, and the quantity demanded falls by 20%. The fact that quantity demanded changed by more than the price change suggests that

The demand for Tasty Treat Tea is elastic.

Which best describes what this graph indicates about government spending?

The government almost always spends more than it collects.

How can the use of new technology in industry benefit the US government? The government can purchase materials from anywhere. The government can rely on automation to reduce costs. The government can react to economic changes quickly. The government can transport goods around the world.

The government can react to economic changes quickly.

What does the science of microeconomics cover?

The science of microeconomics covers a variety of specialized areas of study including: industrial organization, labor economics, financial economics, public economics, political economy, health economics, urban economics, law and economics, and economic history.

A clothing store has ordered a new supply of jeans for the fall season and wants to sell of the remaining items from the previous spring. What action would the store owner most likely take

The store owner would most likely lower the price of the spring jeans to encourage consumers

Clothing store has ordered a new supply of jeans for the fall season and wants to sell off the remaining items from the previous spring season. What action with the store owner most likely take?

The store owner would most likely lower the price of the spring jeans to encourage consumers

Which statement best describes how globalization is affecting the world?

The world is becoming more globalized and connected.

What are the four types of market scenarios that a firm may encounter when making a production decision?

There are four types of market scenario that a firm may encounter when making a production decision: economic profit, normal profit, loss-minimizing condition, and shutdown. The firm should always produce unless it encounters a shutdown scenario.

Which best describes why investing to be such a challenge

There are no guaranteed investment

Which best describes why investing can be such a challenge?

There are no guaranteed investments.

Which best describes the availability of substitutes in a monopoly?

There are no substitutes.

What are the cons of a mixed market economy for most citizens? CHECK ALL THAT APPLY.

There may be a sizable gap between rich and poor people. Citizens must pay for most basic necessities by themselves. There is no guarantee of steady employment for many citizens. Citizens often purchase their own health care and higher education.

What purpose do financial incentives serve?

They act as trade barriers.

Describe the seven major goals of the United States economy.

They are: economic freedom, efficiency, equity, security, full employment, price stability, and growth.

How are Bill Gates and Henry Ford similar? Check all that apply.

They both became wealthy and successful. They both helped better the lifestyles of others. They both developed products that filled a human need or needs.

How are Bill Gates and Henry Ford similar? Check all that apply.

They both became wealthy and successful. They both helped better the lifestyles of others. They both developed products that filled a human need or needs.

How could a graph that shows the US unemployment rate from August 2010 to November 2011 help the US government?

They could use it to make an economic prediction.

Analyze the consequences of consumer economic decisions.

They determine what is, and what is not, produced when they express their wants in the form of purchases in the marketplace.

What is a main reason why entrepreneurs experience daily stress?

They have considerable responsibility.

why it is important to set economic goals.

They help us determine if the system meets our needs.

Which best describes how expansionary policies can facilitate economic growth?

They increase disposable income.

Which best describes the relationship between consumers and producers?

They interact with each other

Which best explains how contractionary policies can hamper economic growth?

They slow demand.

Property taxes are usually determined based on

Value of the property

Which scenario is an example of demand-pull inflation?

a

Command Economies

a central authority determines WHAT, HOW, and FOR WHOM to produce.

Read the graph about mortgage interest rates and housing starts between 1978 and 1983. A conclusion that can be drawn from both graphs by looking at 1983 is that interest rates

a. dropped, which led to more home starts.

Bank deposits help the nation's economy by

b. giving banks the money to loan and invest.

Which is an example of a product that is considered a need?

breakfast food

What area of economics focuses on the interactions between individual consumers and producers?

c. microeconomics

Rules ensuring that businesses offer safe products to consumers are part of a nation's

c. regulatory policy.

Standard of living is the level at which

consumers enjoy desired goods

A disadvantage of forming a partnership is that owners can find it tougher to start and stop a business. can find it more difficult to get a bank loan. are only responsible for their own finances. are fully responsible for their partners' losses.

d

Which best explains why banks consider interest on loans to be important?

d. Interest helps them cover business costs.

Which does a corporation pay to its stockholders?

dividends

The U.S. government provides

education and welfare and is the second largest consuming group in the economy after consumers.

The tax on gasoline is a(n)

excise tax

In a republic, elected officials create __ to regulate the economy

laws

Which best describes a reason that consumer demand can change?

loss of income

which best describes a reason that consumer demand can change?

loss of income

The study of the interaction between individuals and businesses is known as

microeconomics

A country with an absolute advantage can produce a good or service

more efficiently than another country.

Which occurred during the Great Depression?

new forms of money increasing prices surging unemployment

If expansionary taxation policies encourage growth, are they always appropriate to implement?

no governed services could be reduced and cause serious problem's for individual's and businesses.

Social Security tax is a(n)

payroll tax

Which generates revenue for Google?

sales of advertisements

Which best explains the purpose of long-term planning?

save for large purchases in the future

What do the governors do?

set monetary policy; approve changes in the interest rate; oversee the Federal Reserve Banks; write banking regulations

Fiscal policies establish a government's plans for taxation and

spending

what are aspects of a free enterprise system?

there are few limits on the sue of private property, consumers make all of their economic choices, producers make all of their economic choices

What is one stated purpose of the World Trade Organization?

to monitor trade policies of many countries

Why would a country want to establish absolute advantage?

to produce goods more efficiently than other countries

One key characteristic of a tax is that it is a required payment to a governmental agency.

true

A credit score tells a lender how

trustworthy someone is as a borrower

The graph shows employment figures for nonfarm workers for 2008 to 2013. What problem does this graph identify?

unemployment

What does this graph suggest about green tea? Check all that apply.

-Green tea is inelastic in terms of supply. -The supply of green tea does not change sharply with the price.

Which statement about Phung's income and tax situation are correct? Check all that apply.

-The first $9,075 she makes each year will be taxed at 10% -Portion of Phung's income will be taxed at 10%, 15%, 25%, and 28%. -After $36,000 Phung's taxable income will experience the greatest tax bracket increase.

What are aspects of a free-enterprise system? Check all that apply.

-There are few limits on the use of private property. -Consumers make all of their economic choices. -Producers make all of their economic choices.

How can producers make the most profit? Check all that apply.

-They can work to decrease their marginal cost. -They can raise prices to increase marginal revenue. -They can keep marginal costs below marginal revenues.

Sabrina's Soccer produces soccer balls and soccer nets, which are sold at sporting goods stores.

-a rise in the number of soccer leagues -a decrease in the cost of raw materials -the opening of two sporting goods stores

Which of the following is influenced by personal economic choices? Check all that apply.

-the resources you have available -the money you decide to spend on leisure products -the amount of money you put into your savings account -the manner in which you balance your time between work and leisure

Form used to file Individual Income Tax Return

1040

Form used to report various types of income other than wages, salaries, and tips?

1099

In how many cities are Federal Reserve district banks located?

12

Example of a positive incentive for consumers

A coupon clipped from a newspaper

What is one possible effect of high unemployment in a mixed market economy? The government will intervene to appoint new jobs to workers. A lack of income will weaken the buying power for many people. New government-run farms and factories will open to provide work. The wealth gap between the upper and lower classes will decrease.

A lack of income will weaken the buying power for many people.

Economists studying the money supply categorize the status of the money based on interest rates. liquidity. inflation rates. credit.

B) Liquidity

Why are market economies more efficient?

Because they do not need to wait for word from the government before changing their output, companies under market economies can quickly keep up with fluctuations in the economy, tending to be more efficient than regulated markets.

What does being knowledgeable about economic foundations allow?

Being knowledgeable about economics foundations allows an individual to be an active and aware participant rather than a passive economic agent.

Which best explains how globalization offers an advantage to businesses? Businesses can take advantage of favorable laws to make products cheaply. Businesses can take advantage of favorable taxes to make products cheaply. Businesses can take advantage of new forms of technology to make products cheaply. Businesses can take advantage of new forms of democracy to make products cheaply.

Businesses can take advantage of new forms of technology to make products cheaply.

According to the graph, the marginal cost begins to increase when the producer makes

C. four pies.

The graph shows China's workforce from 2000 to 2010. Which best describes the effect of globalization on China's economy?

China is shifting toward specialization in industry and services and away from agriculture.

What is one downside for consumers to competition in a free-enterprise system?

Consumers must be knowledgeable

Which helps enable an oligopoly to form within a market?

Costs of starting a competing business are too high

How has globalization made countries more interdependent?

Countries now rely on one another for vital resources. Countries now rely on one another for chances to import. Countries now rely on one another for chances to export.

Motherboards, Inc., manufactures computer parts. The company's total revenue is

D. the amount the company receives from the sale of all of its computer parts.

is an important goal because populations tend to increase and existing populations tend to want more goods and services.

Economic growth

Which best describes a producer with an absolute advantage.

Efficient

Which economists most likely would have agreed with the US government's intervention during an economic crisis in 2008?

John Maynard Keynes and Milton Friedman

What does Macroeconomics generally focus on?

Macroeconomics is generally focused on countrywide or global economics. It studies involves the sum total of economic activity, dealing with the issues such as growth, inflation, and unemployment.

In this type of economy, individuals and groups of individuals can own their own business, government does not regulate private property nor does it control the economy.

Market

In this type of economy, there is much competition among businesses because each is trying to offer to consumers the best product at the best price. The government does not regulate business.

Market

Which type of economy is being represented by this image?

Market

What is Market interaction?

Market interaction between buyers and sellers is an evaluation of social behavior in an activity where each agent is seeking to maximize return and minimize cost. This is a classic scenario of economics, involving social interaction (qualitative) with optimization (quantitative).

An economic system where the people and the government work together to set the price of needs/wants/goods; the price is sometimes determined by the demand but other times determined by the government typically seen in societies engaging in industrialization

Mixed

In this type of economy, the government may put laws or rules on certain economic practices, but it will also allow supply and demand to dictate economic choices of consumers.

Mixed

Which company has the comparative advantage in producing small tubes of toothpaste?

Mmmint

In macroeconomics, the economy can best be understand through the use of

Models

Which best describes the purpose served by economic system?

Models identify patterns.

Which generalization best describes the information provided by this graph?

NOT By 2012, the United States had solved its economic problems.

Which describes the difference between a personal loan and a credit card? Credit cards offer lump sums of money, while personal loans set a maximum amount a person can borrow. Credit cards are secured loans for large amounts, while personal loans are unsecured for small purchases. Personal loans offer lump sums of money, while credit cards set a maximum amount a person can borrow. Personal loans are secured for small purchases, while credit cards are unsecured loans for large amounts.

Personal loans offer lump sums of money, while credit cards set a maximum amount a person can borrow

is important to anyone trying to provide basic necessities on a limited income and for anyone planning their economic future.

Price stability, or freedom from inflation,

What are factors of production?

Resource inputs used to produce good and services.

What is the difference between profit and revenue?

Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs.

The graph shows gross domestic product in the US private sector from 2009 to 2011. What conclusion can be drawn about the US economy?

The economy suffered a setback in 2009 before rebounding in 2010.

Which best describes the economic impact of defaulting on bank loans? The economy suffers because banks have less money to loan to others. The economy suffers because people have less money to spend. The economy suffers because businesses are scared to take out loans. The economy suffers because people are scared to take out loans.

The economy suffers because banks have less money to loan to others

Why are imports, which bring goods into a country, considered a leakage factor?

The money paid to producers of imports leaves the country.

What are the most common macroeconomics topics?

The most common macroeconomic topics of study for national entities are sustainability, full employment, price stability, external balance, equitable distribution of income and wealth, and increasing productivity.

Which needs to happen in order to stop disequilibrium from occurring?

The price of goods needs to be increased.

Which statement best explains the law of demand?

The quantity demanded by consumers decreases as prices rise, then increases as prices fall.

Which best explains how contractionary policies can hamper economic growth?

They reduce disposable income.

How do corporations raise money and resources to expand? Check all that apply.

They request a bank loan. They agree to sell stocks. They issue bonds

Which best describes why taxes and savings are considered leakage factors

They take money out of the economic system

Why would a country want to establish absolute advantage?

To produce goods more efficiently than other countries

Why must old currency be taken out of circulation when new currency is made? The old currency is more valuable than the new currency. The new currency is much more liquid than the old currency. Too much currency in an economic system will cause inflation. Too much currency in an economic system will create artificial wealth.

Too much currency in an economic system will cause inflation.

Explain the importance of the entrepreneur in a free enterprise economy.

When entrepreneurs succeed, they benefit by gaining profits; workers benefit through jobs and higher wages; consumers benefit by having more and better products to buy; and government benefits through greater tax revenues.

What is a centrally planned economy?

When the government is responsible for setting the amount produced.

The Organization of the Federal Reserve System

a central banking system with major banks in 12 districts and 24 branch banks

securities

a mean of protection for investments

An economic thinker who influenced early economists was

adam smith

Economists studying the money supply categorize the status of the money based on a. interest rates. b. liquidity. c. inflation rates. d. credit.

b

In how many cities are Federal Reserve district banks located? a. 4 b. 12 c. 50 d. 8

b

Which best describes the difference between preferred and common stocks? a. Preferred stock allows shareholders to vote for a board of directors, while shareholders of common stock do not have voting rights. b. Common stock gives shareholders one vote per share owned, while shareholders of preferred stock do not have voting rights. c. Preferred stock gives shareholders priority for dividends distributed, while shareholders of common stock are not allowed dividends. d. Common stock allows shareholders to get priority for dividends distributed, while shareholders of preferred stock are not allowed dividends.

b

Economic interdependence means that economic policies must balance the needs of

b. governments, individuals, and businesses.

During a recession, what is one way governments try to encourage growth?

by increasing unemployment benefits

Which document determines the number of shares a company can sell? a. a stock prospectus b. an annual bill of rights c. a corporate charter d. an annual report

c

what is one downside for consumers to competition in a free enterprise system?

consumers must be knowledgeable

A new business should be based on an entrepreneur's individual interests because the entrepreneur must a. have sufficient confidence to succeed. b. be willing to take personal responsibility. c. have enough determination to work alone. d. dedicate as many hours as needed to the work.

d

The simplest form of a trade agreement is a ... agreement created between two countries.

direct

The simplest form of a trade agreement is a __________ agreement created between two countries.

direct

One fact about all currency is that it

has a changing value

When was the Federal Reserve created?

in 1913 by the Federal Reserve Act

In the United States, the government creates laws and regulations that _________ business activities to prevent wrongdoing.

limit

In an oligopolistic market, consumer choice is

limited

Which best describes a central bank's primary goals?

limiting inflation and reducing unemployment

The consumer has ___ ___ ___ __ ___ ___ ___ . Consumer sovereignty describes ___ ___ ___ ___ ___ ___ ___ ___ ___ ___.

much power in a free market economy, the role of the consumer as ruler of the market.

Income reaches the highest level at the _________ point of the business cycle.

peak

The largest source of tax revenue for the federal government is

personal income tax

A goal of financial regulatory agencies is to

prevent monopolies.

A factor that most influences changes in consumer demand is

price.

A demand curve shows how changes in

prices affect the consumer demand

In economics, which provides the goods and services available to consumers?

producers

Which most likely results from producers engaging in specialization?

producers reduce their cost

A purpose of government regulation in a mixed-market economy is to protect

property rights

Which is the primary role of a producer?

providing goods and services

A _________ can be defined as whatever people use to create services and goods.

resource

Interest Rate

the price of credit to a borrower

School band members need to raise money for new uniforms. Some members want to sell energy drinks at a football game, but others want to organize a car wash in the school parking lot. Based on economics, what would be most influential in making the decision? the labor needed the consumer demand the capital needed the value of the resources

the value of the resources

Which best describes how individuals help the economy grow?

they work in their own self-intrest

To be successful, an entrepreneur must be willing to invest money, considerable effort, and

time

coordinate

to work together to meet a goal

compete

to work toward a goal while attempting to defeat rivals

Supply and demand coordinate to determine prices by working

together

Brenda's Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total revenue the company makes after selling 10 boards?

$450

Which does the law of demand do? Check all that apply.

- allows producers to respond to consumers - allows consumers to influence prices

Which does the law of demand do? Check all that apply.

- allows producers to respond to consumers -allows consumers to influence prices

The graph shows a supply curve. Which events could cause the change in supply shown on this graph? Check all that apply.

-A producer goes out of business. -A natural disaster causes production to drop. -A resource needed to produce more of the good has become scarce.

Which of these qualify as variable expenses? Check all that apply.

-Clothing purchases -Monthly groceries -Cable TV

Which of the following statements about opportunity cost are true?

-It exists because resources are scarce. -It influences consumers. -It influences producers.

Which occurs during market equilibrium? Check all that apply.

-Supply and demand meet at a specific price. -Supply and demand meet at a specific quantity.

Which are examples of programs or projects most likely funded by taxes in the United States?

-constructing a highway -maintaining state parks -collecting garbage

What are some ways to address unemployment in a market economy? CHECK ALL THAT APPLY.

-creating new projects -lowering restrictions -promoting hiring

To protect consumers, the SEC requires brokers and dealers to [______________]

-reveal

Regulatory agencies such as the OCC and the FDIC add [______________] to the banking system.

-safety

Which factors must a producer consider when deciding what good to supply?

-the elasticity of a good being supplied -competition within the market -the ability to produce the good efficiently

Why does the US government create regulatory agencies? Check all that apply.

-to create fair competition between producers -to protect consumers' health and safety -to prevent the formation of monopolies

A producer with a comparative advantage has the ability to produce a good or service at....

....a lower opportunity cost than any competitor can.

Governments collects taxes to ensure that....

....citizens contribute to meeting society's needs.

Trade agreements can cause jobs to go to countries that provide those jobs....

....efficiently.

One primary purpose of the European Union is to....

....eliminate borders between countries.

Under a contractionary taxation policy, the government tries to improve its finances by....

....increasing taxes.

Economists studying the money supply categorize the status of the money based on....

....liquidity.

According to the chart, the citizens are being taxed....

....proportionally.

Property taxes are usually determined based on....

....the value of the property.

Trade agreements are helpful because they allow countries to....

....trade for necessary goods.

Which are examples of programs or projects most likely funded by taxes in the United States? Check all that apply. 1. constructing a highway 2. collecting garbage 3. developing a vacation resort 4. building a shopping center 5. maintaining state parks

1, 2, 5

Why might buying a home during a recession be a good decision for some consumers? Check all that apply.

1, 3, 4

Which statements correctly explain price floors and price ceilings? Check all that apply.

3-Price floors help producers by raising prices. 4-Price ceilings help consumers by lowering prices. 5-Effective price floors are set above equilibrium. 6-Effective price ceilings are set below equilibrium.

Look at the graph examining the market for graphic T-shirts. Which option represents equilibrium as it appears on this graph?

30 graphic T-shirts on sale for $10

How many types of money are included in the M2 category?

4

If Sabrina's Soccer makes three nets, how many balls can the company produce?

4

Which is the best example of a country that is dependent on other countries?

A country that has little fertile soil

What is deflation?

A decrease in the general price level, that is, in the nominal cost of goods and services.

According to the business cycle, what characteristic indicates that a depression has been reached?

A depression has been reached when a trough has occurred.

Which describes an important difference between general partnerships and limited partnerships?

A general partnership has unlimited liability for all partners while a limited partnership has limited liability.

What is a pure planned economy?

A pure planned economy has one person or group who controls what is produced; all businesses work together to produce goods and services that are planned and distributed by the government.

Which situation is the best example of competition in an economic system? A restaurant just opened down the block from a movie theater, and the restaurant owner hopes to attract diners after each movie. A small CD store slashed its prices to attract customers from a larger store that sells CDs and DVDs. A store that sells sneakers has offered a special deal to customers from a nearby health club. A federal agency has been created to monitor the production and distribution of food supplements.

A small CD store slashed its prices to attract customers from a larger store that sells CDs and DVDs.

Which describes the difference between a trade surplus and a trade deficit? A trade surplus is when a country exports more than it imports, while a trade deficit happens when imports exceed exports. A trade surplus is when a country imports more than it exports, while a trade deficit happens when exports exceed imports. A trade surplus is when a country produces more than it consumes, while a trade deficit happens when consumption exceeds production. A trade deficit is when a country loses money on products it makes, while a trade surplus happens when production leads to profits.

A trade surplus is when a country exports more than it imports, while a trade deficit happens when imports exceed exports.

Which statements describe effects of changes in information technology? Check all that apply. Economists are better able to predict how resources should be allocated. Governments can make better economic policy decisions. It has become more difficult for businesses to identify when shortages will occur. The amount of time to share data between locations has steadily increased. Employment in information technology sectors has grown.

A,B,E

An influential economic thinker, known as "the father of modern economics," was

Adam Smith

What is a market economy?

An economy in which goods and services are exchanged in a free market, as opposed to a state-controlled or socialist economy; a capitalistic economy.

What is externality?

An impact, positive or negative, on any party not involved in a given economic transaction or act.

Which best describes how governments respond to changes in the business cycle?

C. Governments change their policies.

Which is likely to occur if there is a price increase for a good which exhibits elastic demand?

C. People might buy a less expensive substitute good.

Time is measured along the x-axis. What is measured along the y-axis?

C. economic output

In which way do producers try to differentiate themselves in monopolistic competition?

C. product features

The graph shows a point of equilibrium. If supply for a product is low but demand is high, what most likely needs to happen to achieve equilibrium?

C. the supply needs to be raised.

When is cash NOT included?

Cash is NOT included in capital in terms of a production input. Homes and personal automobiles are also not included in capital because these items are not directly tied to the production of goods or services.

In the US which type of industry is often considered part of an oligopoly

Cell phone carriers

This graph shows merchandise export data for the years 2010 through 2012. Which statement most accurately describes the information presented on the graph?

China exported more goods than the United States from 2010 to 2012.

What is one downside to competition in a free-enterprise system?

Consumers must be knowledgeable.

The diagram shows a challenge for government policy-makers. Which of these statements describes what the diagram is showing?

Economic policy must reach a balance between needs and ideals.

How can economics be applied?

Economics can be applied throughout society from business to individual behavior with further application in the study of crime, family and other social institutions and interactions.

What two things does economics incorporate?

Economics incorporates both qualitative and quantitative assessment.

What does economics provide?

Economics provides distilled frameworks to analyze complex societal interactions, as in the case of consumer and firm behavior.

What is the best definition of elasticity in economics? Elasticity of supply measures how the amount of a good changes when the producer hires more employees. Elasticity of supply measures how the amount of a good changes when the producer uses new materials. Elasticity of demand measures how the amount of a good changes when its price goes up or down. Elasticity of demand measures how the amount of a good changes when its distribution expands.

Elasticity of demand measures how the amount of a good changes when its price goes up or down

With which statement would President Bill Clinton most likely have agreed?

Free trade must be carefully monitored.

How has the development of transportation and communication systems affected the type of economy that exists in the United States?

Freedom of movement of people and ideas has allowed the United States to develop a strong Market economy.

Which best describes a difference between the views of Milton Friedman and John Maynard Keynes on the economy?

Friedman said that monetary policy should be used to influence aggregate demand, while Keynes believed the best approach was fiscal policy.

When does full employment occur?

Full employment occurs when those who are able and willing to have a job can get one. Most economists believe that there will always be a certain amount of frictional, seasonal and structural unemployment (referred to as the natural rate of unemployment). As a result, full employment does not mean zero unemployment.

US federal income tax is progressive by law, but which best explains why is it sometimes regressive in practice? High-income earners can fight in court for the right to a reduced rate. High-income earners reduce their tax rates through numerous deductions. High-income earners use tax laws to their advantage to reduce their tax rates. High-income earners always place their assets overseas to lower their tax rates.

High-income earners use tax laws to their advantage to reduce their tax rates

What is the difference between inflation and deflation? Inflation can result from falling demand and boosts the value of money. Deflation can result from rising demand and reduces the value of money. Inflation can result from rising demand and boosts the value of money. Deflation can result from falling demand and reduces the value of money. Inflation can result from falling demand and reduces the value of money. Deflation can result from rising demand and boosts the value of money. Inflation can result from rising demand and reduces the value of money. Deflation can result from falling demand and boosts the value of money.

Inflation can result from rising demand and reduces the value of money. Deflation can result from falling demand and boosts the value of money

Which best explains how the law of demand affects consumers?

It helps consumers tell producers when prices are too high.

Which statement best describes how the Fed responds to recessions?

It increases the money supply.

How is using money related to bartering? It is a substitute for bartering. It is the opposite of bartering. It is a newer form of bartering. It is an old form of bartering.

It is a substitute for bartering.

Which of these assumptions can an entrepreneur safely make when planning a start-up? Check all that apply.

It is important to have a thorough knowledge of the product. Thorough planning and sound strategy do not guarantee a business's success. Raising funds is necessary but may involve personal risk.

Why does the Fed pay interest to banks?

It is interest on money held in reserve.

The United States is said to have an absolute advantage in producing food compared with Japan. What does that mean?

It produces food more efficiently than Japan.

Which statement best explains paying in cash to cover the costs of education

It requires the use of savings

GRAPH: The graph shows changes in GDP in the United States from 2009 to 2011. How did the contribution of the services sector to GDP change between 2009 and 2011?

It rose significantly.

The graph shows changes in GDP in the United States from 2009 to 2011. How did the contribution of the services sector to GDP change between 2009 and 2011?

It rose significantly.

It takes brothers John and Dan the same amount of time to clean the room they share, but John can mow the lawn faster than Dan. Which action would allow them to take advantage of their respective comparative advantages?

John mowing the lawn and Dan cleaning their room

Which best summarizes the philosophical difference between economists John Maynard Keynes and Adam Smith?

Keynes said government was the key to solving economic issues, while Smith believed government should take a hands-off approach.

In a republic, elected officials create __________ to regulate the economy.

Laws

Which statement best describes the effects of low and high interest rates on the economy? Low interest rates encourage consumers to borrow and spend, while high interest rates encourage saving. High interest rates discourage consumers from investing, while low interest rates encourage investment. High interest rates encourage consumers to borrow and spend, while low interest rates encourage saving. Low interest rates encourage consumers to invest, while high interest rates discourage investment.

Low interest rates encourage consumers to borrow and spend, while high interest rates encourage saving.

It is better for businesses to have _ opportunity costs as it oftens gives them a comparative advantage

Lower

Which statement best describes the main cause of the 2008 housing market crash in the United States

Many people cannot be calm payments during a week economy

Which best explains the purpose of market research?

Market research helps producers earn more profits.

This table shows the production possibility schedule for several toothpaste company Which company has the comparative advantage in producing large tubes of toothpaste?

Mmmint

Mixed Economies Disadvantages

More services = higher cost of living. Availability of services may be limited or quality may deteriorate. Industry may be less efficient.

Which best describes the standards required of foreign producers?

NOT Foreign producers have more stringent standards than domestic producers.

With which statement would President Bill Clinton most likely have agreed?

NOT Free trade has drawbacks for participants.

Which explains why government regulation is necessary in a mixed-market economy?

NOT Government regulation protects constitutional rights, profits, and fairness

Which explains why government regulation is necessary in a mixed-market economy?

NOT Government regulation protects property rights, safety, and business owners.

What did President Ronald Reagan believe about economic growth?

NOT Trade barriers would help make trade more fair between countries. Increased production and fair trade would help the economy.

Economic growth takes place when a country

NOT: measures its gross domestic product (GDP).

The is designed to help increase US productivity, GDP, and employment.

National Export Initiative

This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in the short run and long run?

Output reacts differently.

What is the best definition of ownership? Ownership is the right to possess land or goods. Ownership is the right to possess land alone. Ownership is the right to purchase land or goods. Ownership is the right to purchase goods alone.

Ownership is the right to possess land or goods.

Why does an increase in literacy rates often accompany an increase in per capita income? People who have higher-paying jobs often have the time available to develop literacy skills. Developing countries have higher-than-average literacy rates, which typically leads to higher income. People who can read and who receive an education are eligible for higher-paying jobs. Developed countries often attempt to raise low literacy rates to improve income.

People who can read and who receive an education are eligible for higher-paying jobs

Why does an increase in literacy rates often accompany an increase in per capita income? People who have higher-paying jobs often have the time available to develop literacy skills. Developing countries have higher-than-average literacy rates, which typically leads to higher income. People who can read and who receive an education are eligible for higher-paying jobs. Developed countries often attempt to raise low literacy rates to improve income.

People who can read and who receive an education are eligible for higher-paying jobs.

Which statements correctly explain price floors and price ceilings? Check all that apply. Ineffective price floors tend to be too high. Ineffective price ceilings tend to be too low. Price floors help producers by raising prices. Price ceilings help consumers by lowering prices. Effective price floors are set above equilibrium. Effective price ceilings are set below equilibrium.

Price floors help producers by raising prices, price ceilings help consumers by lowering prices, effective price floors are set above equilibrium, effective price ceilings are set below equilibrium.

Mixed Economies Advantages

Provides assistance for some people who otherwise may be left out (too young, too old, too sick, etc). Democracies = people vote and affect government decisions.

Describe Labor:

Quantity and Quality of human resources. includes physical presence of workers as well as their skills and ability.

In microeconomics, price helps determine both quantity supplied and quantity demanded. Which other factors also help determine each?

Quantity supplied is determined by production costs and quantity demanded is determined by desire for the product.

What are the realities of a panned economy?

Realistically, these systems tend to suffer from large inefficiencies and are overall not as successful as other types of economic systems.

What is regulation in an economic system?

Regulation is the placing of limits or restrictions on business activity by the government.

Which statement explains how regulations on prices affect business practices?

Regulations keep prices fair and prevent businesses from establishing monopolies.

What is the difference between profit and revenue? Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs. Revenue is the total amount producers earn after subtracting the production costs. Profit is the total amount producers receive after selling a good. Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers earn after subtracting the production costs. Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers receive after selling a good.

Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs.

Difference between profit n revenue

Revenue is total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs

Which region specializes in diamonds?

Sub-Saharan Africa

The graph shows the number of employed workers in the United States in nonfarm jobs from 2008 to 2013. Which generalization best describes the information provided by this graph?

The United States faced an economic crisis that started in 2008.

The graph shows US trade with China from 1985 to 2012. The Graph shows Exports to China as a blue line in billions from 0 to just over 100. The Graph shows Imports from China as an orange line in billions from 0 to about 430. What conclusion can be drawn about trade between the United States and China?

The United States has a trade deficit with China.

The graph shows unemployment rates in the United States in recent years. Which statement is the most accurate explanation of the information on the graph?

The United States suffered an economic downturn starting in 2009.

In 1776, an economics book titled _________ was published to promote the concept of free enterprise.

The Wealth of Nations

In a paragraph, make a claim about the advantages of entrepreneurship and free enterprise. Be sure to support your claim with reasons and evidence. Also, address at least one counterclaim in your answer.

The ability of entrepreneurs to exist and thrive is the largest advantage of free enterprise. While some might say that entrepreneurship can create unemployment, entrepreneurs and free enterprise actually provide benefits. These positive outcomes include creating income, reducing unemployment, and providing funding for the government through taxes.

What is the foundation of economic theory?

The evaluation of human interactions as it relates to preferences, decision making, and constraints is a significant foundation of economic theory.

Which best describes what occurs in the product market

The exchange of goods and services for money

Which statement best describes a command economy? Government intervention in economic choices is strictly forbidden. The government determines economic choices and makes most decisions. The decisions made by producers and consumers drive all economic choices. Producers and consumers make some economic choices while the government makes others.

The government determines economic choices and makes most decisions.

What restriction would the government impose in a closed economy? The government would prohibit trade with other nations. The government would set the prices for imported goods. The government would preserve traditional customs only. The government would prevent private ownership of property.

The government would prohibit trade with other nations.

What is Marginal Cost?

The increase in cost that accompanies a unit increase in output; the partial derivative of the cost function with respect to output. Additional cost associated with producing one more unit of output.

Which explains the connection between the law of demand and excess demand?

The law states that decreases in price leads to greater quantity demanded and limited supply, which occurs during excess demand.

If a borrower provides collateral and fails to repay the loan

The lender can sell the collateral to cover losses

Which statement best describes the main cause of the 2008 housing market crash in the United States?

The main cause of the crash was that many people could not make home payments during a weak economy.

In the circular flow model, factors of production flow to firms. Which of the following are primary factors of production? Check all that apply.

The primary factors of production are labor, capital, and land.

What is the purpose of a supply chain?

The purpose of a supply chain is to act as an integrating function that links major business functions and processes into a cohesive business model.

What happens when the price of a good increases on a supply curve?

The quantity of goods that are produced increases.

Which best describes how a recession develops as demand and production decrease? The recession accelerates. The recession spirals out of control The recession feeds on itself. The recession starts and stops.

The recession feeds on itself

What is Macroeconomics?

The study of the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets.

If supply for a product is low but demand is high, what most likely needs to happen to achieve equilibrium?

The supply needs to be raised

If supply for product is low but demand is high what most likely needs to happen to achieve equilibrium?

The supply needs to be raised

If supply for a product is low but demand is high, what most likely needs to happen to achieve equilibrium?

The supply needs to be raised.

What are the cons of a mixed market economy for most citizens? CHECK ALL THAT APPLY. There may be a sizable gap between rich and poor people. It can be very difficult for citizens to start private businesses. Citizens must pay for most basic necessities by themselves. There is no guarantee of steady employment for many citizens. Citizens may pay higher taxes than in other economic systems. Citizens often purchase their own health care and higher education.

There may be a sizable gap between rich and poor people, citizens must pay for most basic necessities by themselves, there is no guarantee of steady employment for many citizens, citizens often purchase their own health care and higher education

What are the cons of a mized market economy for most citizens?

There may be a sizable gap between the rich and poor people. Citizens must pay for most basic necessities by themselves. There is no guarantee of steady employment for most citizens. Citizens often purchase their own health care and higher education.

Which best describes why taxes and savings are considered leakage factors?

They take money out of the economic system?

How do lower prices tend to affect demand?

They tend to increase the interest in a product.

How do economists use data?

They use it to follow and predict unemployment rates and to explain trends in production and shipping.

The graph shows how individuals affect economic growth. Which best describes how individuals help the economy grow?

They work in their own self-interest.

Tradition Most people tip for service in restaurants, but not for service at clothing stores or gas stations. Explain how this illustrates economic behavior by tradition rather than by market or command.

Tipping for service in a restaurant is a long-established tradition, just as tipping at clothing stores and gas stations is rarely done.

The graph shows data for the years 2010 through 2012. Which might be a better title for this graph?

Total Exports for the United States and China

The graph shows date for the years 2010 through 2012. Which might be a better title for this graph?

Total Exports for the United States and China

To calculate profit, producers subtract their total production cost from their

Total revenue

Tamara has a hard time remembering pin numbers for her credit cards, but she wants to keep the information secure. Which is the best solution for her dilemma?

Writing them down one one list and keeping them in a safe place at home.

A government might enact expansionary spending when it is trying to a. increase aggregate demand for goods. b. decrease aggregate demand for goods. c. slow an economic expansion. d. lower a budget deficit.

a

Because many successful business owners fail on their first attempts, the reader should assume that they learned from their mistakes. their business plans were incomplete. their products or services were unneeded. they were unwilling to take financial responsibility.

a

Franchises are attractive to business owners because a. they have a proven business model. b. they are typically inexpensive to buy. c. they get to keep all profits. d. they come with very little risk.

a

If expansionary taxation policies encourage growth, are they always appropriate to implement? a. No, government services could be reduced and cause serious problems for individuals and businesses. b. Yes, the private sector can easily and affordably replace all services and facilities cut by the government. c. No, the government is capable of providing many but not all services individuals and businesses need. d. Yes, the government will still ensure that individuals and businesses continue to receive all necessary services.

a

Read the graph. What can the reader reasonably conclude from information in the graph? Fewer new businesses were started in 2010 than in other years. The opening of new businesses peaked between 2007 and 2008. More new businesses were started in 2006 than in 2005. The number of new businesses remained constant between 2006 and 2009.

a

This is a graph showing price and total output in the short and long run. According to this graph, how does supply behave in the long run?

a

What gives the US government the power to collect taxes? a. the Constitution b. laws passed by Congress c. an executive order d. common law

a

What is a main reason why entrepreneurs experience daily stress? a. They have considerable responsibility. b. They need to spend time training employees. c. They need to have sufficient income to pay loans. d. They have to contribute both to the market and society.

a

What part does interest play in deficit spending? a. Governments must pay interest on money they borrow when they take on debt. b. Citizens must pay interest when their governments borrow money. c. Governments may charge foreign countries interest when they borrow money. d. Interest is not a factor when a government's budget is in deficit.

a

Which best describes the difference between sole proprietorships and partnerships? a. Sole proprietors keep all profits and have unlimited liability, while partners split profits and share liabilities. b. Sole proprietors share responsibilities, while partners are responsible for only a portion of the business. c. Sole proprietors split profits and share liabilities, while partners keep all profits and have unlimited liability. d. Sole proprietors pay taxes only on business profits, while partners do not have to pay taxes on profits.

a

Which best summarizes the philosophical difference between economists John Maynard Keynes and Adam Smith? a. Keynes said government was the key to solving economic issues, while Smith believed government should take a hands-off approach. b. Smith said government was the key to solving economic issues, while Keynes believed government should take a hands-off approach. c. Smith believed in an "invisible hand" with which government pushes the economy, while Keynes did not agree with this idea. d. Keynes believed in an "invisible hand" with which consumers push the economy, while Smith did not agree with this idea.

a

Which workers are most likely to be in demand in the future? a. those with high-tech skills b. those with construction skills c. those in government jobs d. those in manufacturing jobs

a

Which workers are most likely to be in demand in the future? those with high-tech skills those with construction skills those in government jobs those in manufacturing jobs

a

Why does the Fed pay interest to banks? a. It is interest on money held in reserve. b. It is interest on credit available to the Fed. c. It is interest on loans taken by the Fed. d. It is interest on government investments.

a

What might cause a change in the value of fiat money? a change in the value of commodities a change in government regulations a change in materials used to make money a change in individuals' spending habits

a change in government regulations

Which is the best definition of inflation?

a gradual increase in the price of goods and services

classical economics

a group of early economic theories that focus on the establishment of economic freedoms

society

a group of individuals, usually within a community, who share traditions, interests, and establishments

A producer with an absolute advantage has the ability to produce a good or service at

a lower cost than any competitor can

A producer with a comparative advantage has the ability to produce a good or service at

a lower cost than any competitor can.

A producer with an absolute advantage has the ability to produce a good or service at

a lower cost than any competitor can.

A producer with a comparative advantage has the ability to produce a good or service at

a lower opportunity cost than any competitor can.

What kind of economy uses a free-enterprise system? a closed economy a command economy a market economy a traditional economy

a market economy

what kind of economy uses a free enterprise system?

a market economy

Which of these is a positive incentive for domestic producers?

a tariff on cars a subsidy on domestic oranges

progressive tax

a tax in which wage earners with higher incomes are taxed at a higher percentage rate than earners with lower incomes

Which of these best describes an opportunity cost?

a trade-off

Read the paragraph below, and then decide which type of economy is being described. In this economy, community members typically use simple tools to plant and harvest crops. Food supplies are supplemented by hunting animals and gathering plant materials. Members trade with each other to obtain needed goods, as few people hold currency. Little economic growth occurs. What type of economy is being described? a traditional economy a free market economy a mixed-market economy a command economy

a traditional economy

Which statement best describes the effects of low and high interest rates on the economy?

a. Low interest rates encourage consumers to borrow and spend, while high interest rates encourage saving.

Which are the roles of a bank? Check all that apply.

a. Storing and holding money c. Lending money d. Investing in the economy

The graph shows data for the years 2010 through 2012. http://media.education2020.com/evresources/3314/3314-03/3314-03-02/3314-03-02-assessment/3314-03-02-17-image1.png Which might be a better title for this graph?

a. Total Exports for the United States and China

Which best describes what injector factors bring to an economic system?

a. factors of production

A responsibility the Federal Reserve has is to

a. loan money to banks during a crisis.

The Federal Reserve manages the nation's currency and money supply by

a. manipulating interest rates and acting as a lender to banks.

Exchange rates can indicate economic health by

a. showing exactly how much of each nation's currency is liquid.

The main role of banks in the nation's economy is to

a. store, lend, and invest money.

In a free enterprise system, what are the goals of government? Check all that apply.

a. to ensure safety for its citizens b. to ensure that citizens' needs are met d. to solve the problem of poverty f. to ensure that the market is fair

What can a producer gain by specializing?

absolute advantage

The Free Trade Agreement Tariff Tool allows US businesses to

access tariff rates when planning to export.

An influential economic thinker, known as "the father of modern economics," was

adam smith

Which are sources of revenue for media companies?

advertising and subscriptions

What term is used in macroeconomics to describe the total supply and the total demand?

aggregate

The EPA tries to balance protecting business interests with protecting

air

The government of country A has determined there is a coal shortage based on mining reports. As a result of these data, the government decreases coal exports to other nations. Access to information helped country A allocate resources. limit consumption. purchase goods. increase sales.

allocate resources.

According to the law of supply, price and quantity move

along a track in the same direction.

Anytown households that earn more than $75,000 tend to buy sports equipment, while households that earn less than $75,000 tend to buy TVs. Which new business would be most likely to succeed?

an electronics store

how is an excise tax different from a sales tax?

an excise tax applies to specific products

What is scarcity?

an inadequate amount of something; a shortage

The graph shows a demand curve.

an increase in demand as prices decrease

The graph shows a demand curve. What change does the graph show?

an increase in demand as prices decrease

What change does the graph show?

an increase in demand as prices decrease

An entrepreneur who needs money to create and distribute a new invention would most likely visit

an investment banker

Which is not used by the IRS to collect taxes?

audits held in your home or office

A consumer might respond to a negative incentive because it could be a chance to

avoid additional charges

A consumer might respond to a negative incentive because it could be a chance to

avoid additional charges.

Consumers having more money to purchase computers will most likely result in

b

Country Q has experienced a rapid increase in its unemployment rate and a sharp decline in its GDP. What might policymakers do in the face of these economic indicators? a. encourage a decrease in purchasing until employment figures increase b. try to trade with other nations to increase production and create new jobs c. increase taxes so the government has more money to spend d. implement controls on wages, forcing employers to pay higher wages

b

Entrepreneurs who want to open a franchise a. buys the rights from the parent company and creates his or her own rules. b. buy the rights from the parent company and invest in a location approved by the parent company. c. invest in a location and create a business model for the franchise. d. invest in a location and develop a trademark for the franchise.

b

Entrepreneurs who want to open a franchise buys the rights from the parent company and creates his or her own rules. buy the rights from the parent company and invest in a location approved by the parent company. invest in a location and create a business model for the franchise. invest in a location and develop a trademark for the franchise.

b

Governments collects taxes to ensure that a. there is sufficient money to fund all government programs. b. citizens contribute to meeting society's needs. c. politicians get paid in a timely manner. d. a government program exists for every need that arises.

b

How is an excise tax different from a sales tax? a. An excise tax is not deductible. b. An excise tax applies to specific products. c. An excise tax applies only to imported goods. d. An excise tax is an indirect tax.

b

If union contracts raise wages above competitive levels, what might be one negative outcome? a. Industries will raise salaries for top-level workers but not entry-level workers. b. Companies will move overseas to escape unions and hire cheaper labor. c. Inexperienced workers will lose their jobs to more experienced workers. d. Employees will be content with their status and thus less likely to join unions.

b

The most common business organizations in the United States are a. partnerships. b. sole proprietorships. c. corporations. d. franchises.

b

The most common business organizations in the United States are partnerships. sole proprietorships. corporations. franchises.

b

Under an expansionary taxation policy, the government tries to stimulate economic growth by a. increasing taxes. b. reducing taxes. c. increasing spending. d. reducing spending.

b

What is the main goal in creating the federal budget? a. managing businesses and increasing spending on all programs b. deciding how to manage the government's tax revenue and expenditures c. finding a way to allow the economy to run on its own d. finding a way to slow down rapid economic growth

b

What led to Henry Ford's success as an entrepreneur? His personal wealth. His innovative production methods. His commitment to improving labor laws. His desire to pay high wages.

b

What must an entrepreneur do after creating a business plan? a. open the business b. finance the business c. file the right paperwork d. identify an opportunity

b

What must an entrepreneur do after creating a business plan? open the business finance the business file the right paperwork identify an opportunity

b

Which best describes the idea behind the "invisible hand"? a. Producers decide what to make for consumers, which guides the economy. b. Producers and consumers work together, which guides the economy. c. Government sets policy for producers and consumers, which guides the economy. d. Consumers decide what they need and want to buy, which guides the economy.

b

Which best explains why a sole proprietor would want a partner? a. to reduce the number of responsibilities b. to make it easier to raise funds for expansion c. to move into a more favorable tax bracket. d. to take advantage of little government oversight.

b

Which of these effects of expansionary spending would a government most want to avoid? a. higher employment b. higher inflation c. growth in production d. growth in consumer spending

b

Why did Friedrich Hayek call expansionary spending dangerous? a. He felt it could lower the money supply and cause deflation. b. He felt it could lead to inflation and poor decisions by consumers. c. He felt it could lead to deflation and poor decisions by consumers. d. He felt it could lower available credit and cause a drop in prices.

b

This diagram shows how banking in the financial sector fits into the circular flow model. Based on the diagram, which example describes how a bank injects money into the economy?

b. A bank approves a mortgage for a customer.

Which scenario is an example of cost-push inflation?

b. An increase in workers' wages raises the production cost of cars, and car prices rise as a result.

These circle graphs show information about Bolivia's workforce and GDP. What do the graphs indicate about Bolivia's labor force?

b. Many people in Bolivia work in agriculture.

What explains the difference between retail and commercial banking?

b. Retail banks loan money to small businesses, while commercial banks loan money to large corporations.

Read the scenario. The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. According to the scenario, what is the greatest economic challenge that Country D is facing?

b. stagflation

Country Q has experienced a rapid increase in its unemployment rate and a sharp decline in its GDP. What might policymakers do in the face of these economic indicators?

b. try to trade with other nations to increase production and create new jobs

Why does the US import oil?

because it does not produce enough oil

If the value of the US dollar declines in relation to other currencies, goods imported into the United States will not be allowed to enter the country. become less expensive. remain the same in price. become more expensive.

become more expensive

Through the successful study of personal finance, an individual will be better prepared for potential problems. able to learn how to spend available assets. faced with long-term challenges. more likely to avoid high opportunity costs.

better prepared for potential problems

When the Fed adjusts its interest rate, it directly influences consumer

borrowing

how are progressive taxes and regressive are similar

both are determined based on income

Which drives the way a company does business?

business model

Entrepreneurs who want to open a franchise

buy the rights from the parent company and invest in a location approved by the parent company.

The law of demand applies most directly to which group?

buyers

the law of demand applies most directly to which group

buyers

Which best describes discretionary spending?

buying goods according to what one want or needs

Which describes the economic role of a consumer?

buys goods and services

What is one way for an entrepreneur to decrease risk?

by creating a strong business strategy

Which best describes how the government enables government monopolies to exist?

by creating and running a monopoly

How do central banks govern the banking industry? Check all that apply.

by deciding how much banks must keep in reserve by overseeing the nation's payment system by responding quickly to banking crises that occur by auditing banks based on current regulations

How do embargoes most negatively affect a domestic market?

by depriving domestic producers of needed goods, restricting their ability to trade

How do trade agreements of international organizations affect trade?

by encouraging countries to balance imports and exports

Read this scenario and answer the question that follows it. Sample scenario: A factory produces blue and green widgets, both at equal production costs. In one day, the factory can make 20 widgets of either color. The factory has been making 10 blue and 10 green widgets per day because they both sell for $5.00. Recently, the price of blue widgets has increased from $5.00 each to $8.00 each. How does the law of supply say the factory will respond to the increase in the price of blue widgets?

by increasing the number of blue widgets supplied

How did NAFTA affect the economies of participating countries? by creating unrestricted trade benefits by raising employment rates and standards of living by creating a balance of exports and imports by increasing the overall volume of production

by increasing the overall volume of production

How did NAFTA affect the economies of participating countries? by creating unrestricted trade benefits by raising employment rates and standards of living by creating a balance of exports and imports by increasing the overall volume of production

by increasing the overall volume of production

According to the article by Brooks, successful entrepreneurs are most interested in a. job security. b. financial gain. c. personal fulfillment. d. a flexible working environment.

c

According to the article by Brooks, successful entrepreneurs are most interested in job security. financial gain. personal fulfillment. a flexible working environment.

c

An entrepreneur conducted many experiments in a project without success. What characteristic must this person have to succeed? a dedication to hard work a willingness to admit failure an ability to learn from mistakes an assumption of responsibility

c

An entrepreneur would most likely be a a. low risk taker. b. trained manager. c. person who works well alone. d. person who has a brief work week.

c

High government expenditures can lead to a bigger a. revenue. b. stimulus. c. deficit. d. surplus.

c

How will an increase in the percentage of older Americans affect the healthcare field? There will be far fewer qualified workers to fill positions in the healthcare field. Salaries will drop in the healthcare field so that businesses can control costs. The healthcare field will create new jobs because more people will need care. Fewer people will need health care, so there will be a drop in healthcare jobs.

c

If a sales tax is the same for all goods sold within a given area, why are sales taxes considered regressive? a. High-income earners avoid paying sales tax through deductions. b. Sales taxes tend to be higher in areas with large low-income populations. c. Sales tax disproportionately affects low-income earners. d. Low-income earners make purchase decisions based exclusively on sales tax.

c

In the year 2013, which of these fields has the largest percentage of workers? a. entertainment and tourism b. construction industry c. education and health care d. manufacturing industry

c

In the year 2013, which of these fields has the largest percentage of workers? entertainment and tourism construction industry education and health care manufacturing industry

c

Milton Friedman argued that consumers are more likely to alter their behavior based on a. changes in the unemployment rate. b. short-term changes in the economy. c. long-term changes in the economy. d. changes in the inflation rate.

c

One argument in favor of labor unions is that they help create many new jobs. support both owners and workers. give workers job security. eliminate unqualified workers.

c

Read the excerpt from a letter about the early trade union movement. The trade union movement came into being as a movement of hunger. It was made necessary by conditions. It was in the beginning formed in response to a hunger for enough to eat . . . As it became possible to secure more food, other hungers demandedsatisfaction . . . The demands were for more and better food, for better clothes and for better homes. It required a struggle to satisfy these needs . . . [A]t every step of the way it was necessary to overcome the stubborn opposition of employers who were resolved not to recede and not to relinquish any of the powers and privileges which they possessed. —Samuel Gompers, 1920 What does the author believe about factory owners? They struggle just as workers do. They earned their privileges. They are greedy and selfish. They are stubborn but hardworking.

c

Rules ensuring that businesses offer safe products to consumers are part of a nation's a. trade policy. b. monetary policy. c. regulatory policy. d. fiscal policy.

c

What does the author believe about factory owners? a. They struggle just as workers do. b. They earned their privileges. c. They are greedy and selfish. d. They are stubborn but hardworking.

c

What is a major factor in the decline of some occupations, such as those in the textiles and clothing industries? a. shifting consumer tastes b. overseas labor costs c. changing technologies d. aging populations

c

What is one way for an entrepreneur to decrease risk? a. by mimicking popular products b. by maintaining personal flexibility c. by creating a strong business strategy d. by developing reliable sources for materials

c

What is one way for an entrepreneur to decrease risk? by mimicking popular products by maintaining personal flexibility by creating a strong business strategy by developing reliable sources for materials

c

Which economists most likely would have agreed with the US government's intervention during an economic crisis in 2008? a. John Maynard Keynes and Friedrich von Hayek b. Milton Friedman and Adam Smith c. John Maynard Keynes and Milton Friedman d. Adam Smith and Friedrich von Hayek

c

Which of the following was the highest spending priority for the federal government in 2010? a. labor and transportation b. veterans' affairs c. education/health and human services d. international assistance

c

Which of these is a banking activity of the Fed? a. printing money b. regulating securities markets c. storing money for banks d. funding government programs

c

Which of these policies would a government take when it comes to employment? a. paying employees whether they work or not b. seeing that at least half the workforce has a job c. ensuring that as many workers are employed as possible d. making sure that only skilled workers get jobs

c

Who benefits most from workplace safety regulations? a. employers, who are less likely to lose income and productivity due to serious employee injuries b. qualified workers with disabilities, against whom employers may no longer discriminate c. all workers, who are less likely to miss work because of injury or face high medical bills d. rival companies, which gain an advantage by using more cost-effective safety measures

c

The map shows GDP per capita in the United States for a given year. What conclusion can someone draw from the map?

c. States with the lowest per capita GDP tend to be in the South.

The graph shows the number of employed workers in the United States in nonfarm jobs from 2008 to 2013. https://media.edgenuity.com/evresources/3314/3314-04/3314-04-01/3314-04-01-assessment/3314-04-01-03.png What course of action might a government take to respond to the downturn revealed in this graph?

c. decrease taxes to increase consumer spending

Which of these policies would a government take when it comes to employment?

c. ensuring that as many workers are employed as possible

In developed economies, less-educated workers have more jobs to choose from. are often more highly skilled than other workers. may be outsourced to other nations. can have difficulty finding work.

can have difficulty finding work.

Which is the most liquid form of money?

cash and currency in circulation

Which is the most liquid form of money? cash and currency in circulation investment accounts savings accounts demand accounts

cash and currency in circulation

Which is an example of a demand account? savings account investment account credit account checking account

checking account

Products whose demand levels are connected to other products are called

complementary goods

In order to know what people want to buy and how much they're willing to pay, producers pay attention to which of the following?

consumers' purchases

The market for which item generally involves pure competition?

corn

The goal of a command economy is to sustain self-sufficiency. preserve traditional customs. create equality within a society. promote free economic choices.

create equality within a society.

Innovation allows producers to

create goods that draw consumer attention

Innovation allows producers to

create goods that draw consumer attention.

Innovation allows producers to create goods that draw consumer attention. follow restrictions that the government imposes. avoid competing with similar businesses. offer warranties for all of their products.

create goods that draw consumer attention.

One of the main questions of economics involves deciding upon the method for distributing goods and services. creating goods and services. pricing goods and services. enhancing goods and services.

creating goods and services.

Which best describes a central bank's primary role?

creating monetary policy

Technology can help governments handle economic emergencies, such as the reliance on automation. crop and resource shortages. the fall of the unemployment rate. instant sales and communication.

crop and resource shortages.

In the lesson, you learned about Dave and his bakery. It was mentioned that "in one hour of work, Dave can make either 60 donuts or 30 bagels." Which might help Dave assess whether he should focus on bagels or donuts? It costs less to make bagels. Customers prefer donuts. Dave charges more for bagels. Donuts cost more to produce.

customers prefer donuts

As a result of decreased production, David lost his job designing cars. Which terms can be used to describe David? Check all that apply.

cyclically unemployed, unemployed

A government's monetary policy is its plan to control a. taxation and spending. b. prices. c. workers' wages. d. the money supply.

d

A new business should be based on an entrepreneur's individual interests because the entrepreneur must have sufficient confidence to succeed. be willing to take personal responsibility. have enough determination to work alone. dedicate as many hours as needed to the work.

d

Expansionary spending takes place when a government makes the decision to a. put a freeze on the number of its employees. b. raise taxes to balance its budget. c. raise taxes to run a budget surplus. d. raise spending to stimulate the economy.

d

How do corporations raise money and resources to expand? a. They request a bank loan. b. They save business profits. c. They cash in dividends. d. They agree to sell stocks.

d

John Maynard Keynes believed that governments should increase spending in order to a. increase prices. b. increase supply. c. decrease demand. d. increase demand.

d

Property taxes are usually determined based on a. the property owner's income. b. the amount of money invested in the property. c. the earnings generated by the property. d. the value of the property.

d

The job outlook for physical therapists is weak to very poor. depends on the economy. will remain stable. will improve over time.

d

What event had an enormous effect on US workplace safety? a new minimum wage the first labor union a worker strike a deadly factory fire

d

What is one benefit for US workers who have a college degree rather than a high school diploma? a. More than 80 percent of jobs require a college degree. b. Those with a college degree report higher job satisfaction. c. Most workers with a college degree are immune to layoffs. d. Those with a college degree earn nearly twice as much as those without college.

d

What is the definition of collective bargaining? a. ongoing salary negotiations between an employee and a factory owner b. an agreement among a group of factory owners to raise worker wages c. a written set of guidelines about legal and illegal workplace conditions d. labor union and employer negotiations about wages and other issues

d

What is the definition of collective bargaining? ongoing salary negotiations between an employee and a factory owner an agreement among a group of factory owners to raise worker wages a written set of guidelines about legal and illegal workplace conditions labor union and employer negotiations about wages and other issues

d

What is the most likely reason why many of the New York Factory Investigating Commission's suggestions were not implemented immediately? The public did not support new safety regulations until several factory disasters occurred. Many of the suggested changes would have negatively affected the quality of products made in factories. Most workers outside New York would not have benefited from widespread factory reform. Factory owners resisted the suggestions because they would be costly to implement.

d

What is the most likely reason why many of the New York Factory Investigating Commission's suggestions were not implemented immediately? a. The public did not support new safety regulations until several factory disasters occurred. b. Many of the suggested changes would have negatively affected the quality of products made in factories. c. Most workers outside New York would not have benefited from widespread factory reform. d. Factory owners resisted the suggestions because they would be costly to implement.

d

When revenues are higher than expenditures in a budget, that budget a. shows a deficit. b. is in balance. c. must be discarded. d. shows a surplus.

d

Which best describes how governments respond to changes in the business cycle?

d

Which best describes what a central bank uses monetary policy to do? a. ensure that the government has a balanced budget b. influence financial institutions globally c. ensure that the government is sufficiently funded d. steer the economy away from recession and toward growth

d

Which best explains how contractionary policies can hamper economic growth? a. They slow demand. b. They help increase consumer debt. c. They reduce consumer confidence. d. They reduce disposable income.

d

Why is the Fed often referred to as a "lender of last resort," or the last lender to turn to in a crisis? a. It lends consumers money when other banks will not. b. It keeps all failing banks afloat to avoid economic disruption. c. It helps finance and stabilize central banks internationally. d. It offers banks financial protection to keep consumers from panicking.

d

Why must the government consider companies' needs as well as those of workers? a. Workers often take advantage of safety and wage laws and regulations. b. Company owners can easily vote government officials out of office. c. Employers deserve the same benefits and protections as employees do. d. Regulations can be costly and may drive companies out of business.

d

Who mostly directly benefits when banks make a profit?

d. shareholders, companies, and the economy

The Federal Reserve transfers profits from its twelve regional banks to

d. the Department of the Treasury.

Read the scenario. The citizens of Country D have noticed that the average prices of most goods within their nation have begun to rise. At the same time, employers are not raising wages at the same rate. The combination of these challenges has resulted in a decrease in overall demand, causing a decline in GDP. Based on the scenario, who is most affected by the situation taking place within Country D?

d. the government, workers, and businesses of Country D

A government's monetary policy is its plan to control

d. the money supply.

Because these societies face scarcity,

decisions concerning WHAT, HOW, and FOR WHOM to produce must be made.

The graph shows the number of employed workers in the United States in nonfarm jobs from 2008 to 2013. What course of action might a government take to respond to the downturn revealed in this graph?

decrease taxes to increase consumer spending

To generate higher profit margins, producers must work to

decrease their production costs

On a graph, a(n) _________ shows the demand portion of equilibrium.

demand curve

a ____ is a graph that shows how prices affect consumer demand

demand curve

Which best describes specialization?

developing expertise in certain types of production

In the United States, dollar bills, nickels, and dimes are representative money. commodity money. various currencies. different denominations.

different denominations

The simplest form of a trade agreement is a ____________ agreement created between two countries.

direct

Which of these best describes income tax?

direct tax

Government regulation is intended to

discourage producers from taking harmful actions.

Spending that can change from year to year is known as __ spending.

discretionary

A car dealer who does not have enough customers for a supply of new cars faces

disequilibrium

Read the graph about mortgage interest rates and housing starts between 1978 and 1983. A conclusion that can be drawn from both graphs by looking at 1983 is that interest rates

dropped, which led to more home starts.

A conclusion that can be drawn from both graphs by looking at the 1983 is that the interest rates ...

dropped, which led to more house starts.

All societies have an

economy, or economic system-an organized way of providing for the wants and needs of their people.

The term ... , often used in conjunction with absolute advantage, is defined as making the best use of resources.

efficiency

The term __________ , often used in conjunction with absolute advantage, is defined as making the best use of resources.

efficiency

The term __________, often used in conjunction with absolute advantage, is defined as making the best use of resources.

efficiency

The term ____________, often used in conjunction with absolute advantage, is defined as making the best use of resources.

efficiency

The term... , often used in conjunction with absolute advantage, is defined as making the best use of resources.

efficiency

Which quality best describes a producer with an absolute advantage? efficient fast accurate prolific

efficient

Trade agreements can cause jobs to go to countries that provide those jobs

efficiently

The measure of how demand changes after price adjustments is called

elastic demand.

Products whose demand rises when another products price increases are called

elastic goods (maybe?)

The degree to which quantity demanded changes after a price change is called elasticity of demand. a substitute good. a complementary good. consumer demand.

elasticity of demand

The degree to which quantity demanded changes after a price change is called

elasticity of demand.

The US government tries to adopt policies that _____ entrepreneurship. Successful entrepreneurship _____ tax revenue for the government. There is a direct relationship between a high start-up rate and decreased _____

encourage increases unemployment

What is the main role of the US Import Administration?

enforcing conditions of trade agreements

Which action provides the most help for making a rational choice?

engaging in finical planning

When an economy suffers from low production, a country cannot

enjoy a steady rate of economic growth.

Which of these policies would a government take when it comes to employment?

ensuring that as many workers are employed as possible

The profit motive encourages

entrepreneurship and is largely responsible for the growth of a free enterprise economy.

The point where supply and demand meet and prices are set is called

equilibrium

When an entrepreneur is successful _____ ________. Successful entrepreneurs _____ ____ ____ ____ ____ ____.

everybody benefits, attract other firms to the industry.

Traditional Economies Advantages

everyone knows which role to play and there is little uncertainty about WHAT, HOW, and FOR WHOM to produce.

A(n) ________ policy is employed when the government chooses to run a larger deficit.

expansionary

an ____ policy is employed when the government chooses to run a larger deificit

expansionary

Profit equals the total amount of money made minus

expenses

Which best explains why companies pay for advertising space?

expose an audience to messages about their products

One negative consequence of using automation to improve manufacturing production is that factories often need fewer workers. production will often slow down. costs often rise for producers. prices often increase for consumers.

factories often need fewer workers.

Companies report people to credit agencies if they fail to pay their bills on time. borrow too much money. fail to use different types of credit. use large amounts of credit at once.

fail to pay their bills on time

A common example of a local tax is a parking ticket?

false

you recently paid $50 to renew your driver's license. The $50 payment is considered a tax?

false

Competition happens when two or more businesses

fight for the same benefit or gain

What must an entrepreneur do after creating a business plan?

finance the business

Which are useful for conducting market research?

focus groups

The table compares two countries and two products. What might be the best decision for Country A?

focus on the petroleum industry only

The proper style for an argumentative essay is

formal

The proper style for an argumentative essay is ______.

formal

Rabia does not currently have a job, but declined a job offer because she feels her skills merit better pay and a better position. Which terms can be used to describe Rabia? Check all that apply.

frictionally unemployed unemployed

Which of the following will be accomplished by efficient allocations of the factors of production? ensuring economic profitability understanding whether a product will fail fulfilling many needs and wants of society replenishment of limited resources

fulfilling many needs and wants of society

Which group creates regulations in mixed-market economies?

governments

Economic interdependence means that economic policies must balance the needs of

governments, individuals, and businesses.

An increase in gross domestic product (GDP) is a sign that a country's economy is

growing

An increase in gross domestic product (GDP) is a sign that a country's economy is declining. stagnant. growing. depressed.

growing

Countries establish internal economic zones in order to

have fewer economic restrictions.

Which describes a factor that limits economic growth?

having low internal demand

Which best describes the purpose of market research?

helping producers make more money

When inflation is , the Fed aims to slow the economy.

high

Stagflation occurs when high inflation combines with

high unemployment and a low level of production.

What type of labor force might a pottery factory want to focus on when hiring?

highly skilled

in a free enterprise system producers decide

how much to charge

In a free-enterprise system, producers decide

how much to charge.

Articles of partnership establish

how profits and losses are divided.

It takes brothers John and Dan the same amount of time each to clean the room they share, but John can mow the lawn faster than Dan. Which action would give them a comparative advantage?

if John mowed the lawn and Dan cleaned their room

What do the district banks of the Federal Reserve do?

implement Federal Reserve policies and provide services to member banks and federal government agencies; implement laws passed by Congress; monitor the economic health of their regions

Which type of goods becomes more expensive as a result of tariffs?

imported

In regard to trade, the United States

imports and exports goods and services.

The result of voluntary exchange,

in which buyers and sellers are free to decide whether or not to complete a transaction, results in both buyers and sellers believing that the good or service obtained is of more value than the money or product given up.

A(n) __________ is a reward or punishment that encourages people to behave in certain ways.

incentive

A(n) _____________ is a reward or punishment that encourages people to behave in certain ways.

incentive

Tariffs and subsidies are both types of

incentives.

Describe Land:

includes all natural resources. eg: oil, water, energy, etc.

A government might enact expansionary spending when it is trying to

increase aggregate demand for goods

What is the purpose of advertising?

increase consumer demand

John Maynard Keynes believed that governments should increase spending in order to

increase demand

john Maynard Keynes believed that governments should increase spending in order to

increase demand

Expansionary monetary policy is used when a government

increases its money supply to boost the economy

Expansionary monetary policy is used when a government

increases its money supply to boost the economy.

Goods that are considered to be needs tend to be elastic when the price changes. inelastic when the price changes. elastic when the supply changes. inelastic when the supply changes.

inelastic when the price changes.

Which challenges faced by an economy are examined in macroeconomics? Check all that apply.

inflation, unemployment, decreased output

Monetarism plays a role in economic growth by

influencing the supply of money

A fee banks charge in exchange for borrowing money is called

interest

A fee banks charge in exchange for borrowing money is called _______

interest

An organization whose members have a common cause for which they seek to influence public policy is called an

interest group

An organization whose members have a common cause for which they seek to influence public policy is called an _________

interest group

The chart compares the price of graphic T-shirts to the quantity demanded. This chart shows the link between

interest in a product and the price a consumer pays.

economic interactions involving which of the following would most likely be studied in macroeconomics?

international monetary fund policy

Many classical economists such as Adam Smith believed that government should intervene often in the economy. intervene little in the economy. always intervene in the economy. never intervene in the economy.

intervene little in the economy

The ___________ of an argumentative essay must include a statement that describes what the essay will discuss.

introduction

Capitalism

is a market economy in which private citizens own the factors of production, In a free enterprise system, there is limited government interference and businesses are free to compete.

A market economy

is normally based on a system of capitalism, where private citizens, many of whom are entrepreneurs, own the factors of production.

The survival of any society depends on

its ability to provide food, clothing, and shelter for its people.

In economics, if a good is inelastic, consumers have lost an interest in purchasing it. producers have lost an interest in manufacturing it. its supply or demand is too sensitive to price changes. its supply or demand is not sensitive to price changes.

its supply or demand is not sensitive to price changes.

The General Theory of Employment, Interest and Money was written by

john maynard k

Which economist most likely would have agreed with the US government's intervention during an economic crisis in 2008?

john maynard k

The most efficient way to ensure that producers are responsible for products is through

labeling

The most efficient way to ensure that producers are responsible for products is through

labeling.

Entrepreneurs use ____ ____ ____ to make a profit.

land, capital, and labor

In a republic, elected officials create ____ to regulate the economy.

laws

All things being equal, when producers sell goods for a lower price, they make more money. the same amount of money. less money. as much money as the law allows.

less money

All things being equal, when producers sell goods for a lower price, they make

less money.

Which describes the economic idea of utility?

level of satisfaction consumers feel over purchases

In the United States, the government creates laws and regulations that ... business activities to prevent wrongdoing.

limit

When discussing comparative and absolute advantage, which best describes specialization?

limiting the types of goods and services produced

Economists studying the money supply categorize the status of the money based on

liquidity

Economists studying the money supply categorize the status of the money based on

liquidity.

A responsibility the Federal Reserve has is to

loan money to banks during a crisis

Because cost of living varies, it is important to consider __________ when conducting a job search.

location

How are roles defined in a traditional economy?

long-standing customs.

Milton Friedman argued that consumers are more likely to alter their behavior based on

long-term changes in the economy

Ricardo works part time at a local computer store. One day, his manager approaches him about moving from cashier to floor supervisor. Ricardo is excited because the promotion comes with a raise; however, the extra work hours would take away from time with his friends. In the end, he decides to take the promotion. What is Ricardo's opportunity cost? losing extra time to spend with his friends being able to use the extra money for summer football camp losing the ability to spend any time with his friends receiving another promotion in six months

losing extra time to spend with his friends

Which best describes a reason that consumer demand can change?

loss of inocme

Competition among sellers helps

lower prices.

What area of economics focuses on the interactions between individual consumers and producers?

microeconomics

What area of economics focuses on the interactions between individual consumers and producers? aggregates macroeconomics microeconomics markets

microeconomics

what area of economics focuses on the interactions between individual consumers and producers?

microeconomics

Which consumer purchase is the result of peer pressure?

mirrored sunglasses because all your friends have them

The most common economic system in the world is a closed economy. command economy. mixed market economy. traditional economy.

mixed market economy.

Technologies that allow for instant worldwide communication include

mobile phones and Internet access.

In macroeconomics, the economy can best be understood through the use of

models

In macroeconomics, the economy can best be understood through the use of money. models. pricing. debates.

models

In macroeconomics, the economy can best be understood through the use of

models.

__________________ is the type of competition that occurs in a competitive market without identical producers.

monopolistic

Which most likely accounts for the changes shown on the demand curve?

more consumers want a product

A country with an absolute advantage can produce a good or service

more efficiently than another country

Global trade provides consumers with

more options and lower prices

Private property rights

motivate people to succeed. Any rewards they earn are kept.

An economic incentive is best described as something that

motivates producers or consumers to take action.

Describe the role of the entrepreneur.

organizes and manages land, capital, labor and starts up businesses.

Credit unions differ from retail banks because they are

owned by their members.

Two doctors who join forces in business form a _____.

partnership

Two doctors who join forces in business form a ___________

partnership

With economic freedom,

people and businesses make their own economic choices.

When goals are at odds,

people must compare costs to benefits before resolving the conflict.

Which best describes the main purpose of a budget?

plan income and expenses

A goal of financial regulatory agencies is to

prevent monopolies

A factor that most influences changes in consumer demand is

price

A factor that most influences changes in consumer demand is quantity. price. quality. competition.

price

The amount that a good is sold for is its elasticity. price. profit. supply.

price

Which consumer influence is represented by the action of buying an item to save money?

price

Economist Friedrich Hayek argued that _____ can serve as signals in an economy.

prices

Both a demand curve and a demand schedule show how prices affect consumer demand. consumer demand affects income. prices affect complementary goods. consumer demand affects substitute goods.

prices affect consumer demand

The graph shows Keynes's theory of aggregate demand. What is likely to happen if a new aggregate demand curve moves to the right?

prices and output would rise, and the equilibrium point will change

One of the purposes of studying economics is to understand the

principles that influence the production of services.

Gross domestic product tracks economic growth by measuring all goods and services

produced by an economy.

In the game of economics, which player has the role of providing goods and services?

producers

Market Economies

producers and consumers determine WHAT, HOW, and FOR WHOM to produce.

Which best describes the idea behind the "invisible hand"?

producers and consumers work together, which guides the economy

Cost-push inflation occurs when consumers show an interest in purchasing more goods. producers need more money to make and distribute goods. the government prints more money and pushes prices up. consumers have more money to spend on goods and services.

producers need more money to make and distribute goods

Economic growth takes place when a country

produces more goods and services (?)

Economic growth takes place when a country

produces more goods and services.

in order to calculate marginal cost, producers must compare the difference in the cost of producing one unit to the cost of

producing the next unit

In which way do producers try to differentiate themselves in monopolistic competition

product features

In which way do producers try to differentiate themselves in monopolistic competition? price advertising product features image

product features

The Food and Drug Administration sets standards for

product labeling

Which is a way that the media influences consumer behavior?

product placement

The three questions of economics best help in making decisions about

production

Which is not something that consumers need to pay attention to in order to make rational choices?

productivity levels

Rescooperate Ice Cream Shop recently analyzed their books. They found that in the past year, they made $100,000 selling ice cream and spent $75,000 on supplies and factory space. The remaining $25,000 represents profit. loss. revenue. expense.

profit.

Producers often work to maximize their _______________ and make them as large as possible.

profits

Which income tax structure is used in the United States?

progressive

a sales tax is a type of

progressive tax

The goal of a market economy is to sustain self-sufficiency. preserve traditional customs. create equality within a society. promote free economic choices.

promote free economic choices.

The ____ ___ ___ ___ is an important role of any government. In the United States, achieving economic equity and security has resulted in a ________________

promoting of national goals, mixed economy, or modified private enterprise economy.

A purpose of government regulation in a mixed-market economy is to protect

property rights.

Tax levied on your home is a (n)?

property tax

The chart shows how two people with different incomes are taxed. According to the chart, the citizens are being taxed .

proportional

which of these best describes income tax?

proportional

The chart shows how two people with different incomes are taxed. According to the chart, the citizens are being taxed

proportionally

according to the cart, the citizens are being taxed

proportionally

Regulatory policy requires a balance between protecting safety and

protecting constitutional rights.

Which best states the purpose of the news media?

providing objective information that allows people to make good decisions

Which type of business is owned by anyone who wants to buy stock?

public corporations

Consumers in the American economy express their wants in the form of ______ ____ ___ _____. The dollars they spend are the ___ ___ ___ ___ ___ ___ ___.

purchases in the marketplace, votes used to select the most popular products

Cooperatives save members money by

purchasing supplies and services as a group.

Which type of market structure is most closely associated with eBay?

pure competition

A company makes $200,000 in a year and has $150,000 in production costs, leaving them with $50,000. The $200,000 represents

revenue

What is the last step in creating an argumentative essay? outlining prewriting researching revising

revising

Banks pay interest to customers through a

savings account

Describe the characteristics of a traditional economy.

sets economic roles, life is stable, predictable, continuous, and discourages ideas.

Which best states the purpose of using a production possibilities frontier?

setting up efficient production

Which is the correct order of entities who benefit when banks make a profit?

shareholders, companies, and the economy

Which is the correct order of entities who benefit when banks make a profit? employees, shareholders, and the economy shareholders, shoppers, and the economy employees, companies, and the economy shareholders, companies, and the economy

shareholders, companies, and the economy

Who mostly directly benefits when banks make a profit?

shareholders, companies, and the economy

Who mostly directly benefits when banks make a profit?

shareholders, companies, and the economy.

What type of economic growth do most developed economies experience? rapid growth unpredictable growth moderate growth slow growth

slow growth

What type of economic growth do most developed economies experience? rapid growth unpredictable growth moderate growth slow growth

slow growth

Why is the Federal Reserve an independent body?

so it will not be influenced by politics

The largest single non-defense item in the federal budget is?

social security

Which form of government insurance provides assistance to people who cannot work due to age or disability?

social security

A command economy tends to exist under a communist government that provides little regulation. democratic government that provides some regulation. representative government that provides no regulation. socialist government that provides a lot of regulation.

socialist government that provides a lot of regulation.

In free-enterprise systems around the world, there are no restrictions on business ownership or business activity. some restrictions on business activity but not on business ownership. some restrictions on business ownership but not on business activity. some restrictions on business ownership and business activity.

some restrictions on business ownership and business activity.

Which of the following would be a producer? someone owning a book store someone shopping in a grocery store someone putting gas in a car someone waiting in line at a bank

someone owning a book store

____________ is the term used to describe the amount of control or influence that consumers have on a market.

sovereignty

When a country chooses to limit the kinds of goods or services it produces, it is practicing

specialization

____ is the act of limiting the types of goods and services produced.

specialization

_________________ is the act of limiting the types of goods and services produced.

specialization

What gives the US government the power to collect taxes?

the Constitution

The Federal Reserve transfers profits from its twelve regional banks to

the Department of the Treasury.

The Federal Reserve transfers profits from its twelve regional banks to investment and commercial banks. central banks in Europe and Asia. the Department of Commerce. the Department of the Treasury.

the Department of the Treasury.

A regulatory agency that makes sure banks follow federal laws is

the FDIC

Which regulatory agencies provide general oversight for the banking industry?

the Fed and the FDIC

What is the full name of the US central bank, known as the Fed?

the Federal Reserve Bank

Which body manages the Fed?

the Federal Reserve Board

specialization

the act of limiting the kinds of goods and services produced

Monetary Policy

the actions taken by the central bank to manage interest rates and the money supply

What is the best definition of marginal revenue?

the additional income gained from selling an additional good

What is the economy?

the aggregation of individual production and consumption decisions. It is the important link between individual choices and collective outcomes.

This graph demonstrates how

the amount produced greatly changes with the price.

Which factor most directly affects a furniture company's supply?

the availability of raw materials and natural resources

central bank

the bank within a nation is responsible for creating monetary policy

Under capitalism

the basic economic decisions are made through the free interaction of individuals looking out for their own best interests.

The aim of the study of macroeconomics is to examine

the behavior of factors affecting the economy.

laissez faire

the belief that governments should not be involved in economic affairs

Which describes opportunity cost?

the benefits of the best alternative option that are given up by a particular decision

Traditional Economies Disadvantages

the discouragement of new ideas and new ways of thinking. This leads to a lower standard of living than in other societies.

Which best describes the economic impact of defaulting on bank loans?

the economy suffers because banks have less money to loan to others.

The aim of the study of macroeconomics is to examine

the economy's behavior.

Which best describes what occurs in the product market?

the exchange of goods and services for money

Market Economies Disadvantages

the inability of the market to meet every person's basic needs. Markets also do an inadequate job of providing some highly valued services such as justice, education, and health care. Citizens of a market economy must also face a high level of personal uncertainty and the prospect of economic failure.

A factor that most directly affects the demand for automobiles is

the individual tastes and preferences of buyers.

According to the article, what is the primary cause of the decline in poverty rates in China?

the introduction of free trade and entrepreneurship

What is the Federal Reserve referred to as?

the lender of the last resort for financial institutions

What is the definition of minimum wage?

the lowest hourly pay that workers can receive

why are imports, which bring goods into a country, considered a leakage factor?

the money paid to producers of imports leaves the country

Why are imports, which bring goods into a country, considered a leakage factor?

the money paid to producers of imports leaves the country.

A government's monetary policy is its plan to control

the money supply.

Economists use gross national product (GNP) to measure

the output of a nation's citizens, regardless of where they are.

The vertical axis of a demand curve shows

the price of a product

consumer demand is defined as

the willingness and ability people have to buy food

Which best describes how expansionary policies can facilitate economic growth?

they increase disposable income

Which best describes the relationship between consumers and producers?

they interact with each other

Because many successful business owners fail on their first attempts, the reader should assume that

they learned from their mistakes.

Which best explains how contractionary policies can hamper economic growth?

they reduce disposable income

Goals are important because

they serve as benchmarks that help us determine if the system meets most or all our needs.

Study the following production possibility curve. The number of data points that illustrate the proper allocation of resources is

three

To be successful, an entrepreneur must be willing to invest money, considerable effort, and _____ .

time

A reason that countries trade with each other is

to get products they cannot produce

What is the purpose of the US International Trade Association? to help countries establish free trade to help businesses create viable exports to limit levels of investment in trade opportunities to limit trade opportunities for competing companies

to help businesses create viable exports

Why were savings and loans (S&Ls) originally established? to help people invest in small businesses to help people save money to help people buy homes to help people invest in the stock market

to help people buy homes

What is the government's aim in setting quotas?

to increase sales of domestic goods

When prices for homes rise, why might construction companies decide to build more homes?

to make a profit

Which best explains why a sole proprietor would want a partner? to reduce the number of responsibilities to make it easier to raise funds for expansion to move into a more favorable tax bracket. to take advantage of little government oversight.

to make it easier to raise funds for expansion

Which of these is most likely the US government's aim in taxing imported goods?

to protect domestic businesses

Why do we pay taxes?

to raise money for the government

Why do countries most often create trade agreements?

to reduce tariffs

Which best describes the purpose of recording past income and spending in a budget? to know the historic cost of goods to serve as the basis for future planning to learn why having savings is important to learn why expenditures are likely to increase

to serve as the basis for future planning

reserve

to set aside or hold for another

Supply and demand coordinate to determine prices by working together. competitively. with other factors. separately.

together

Trade agreements are helpful because they allow countries to

trade for necessary goods.

What can be a result of free trade? Check all that apply.

trade imbalances lower economic growth exploitation of workers

When a government decides to limit the number of goods that can be sold to another nation, that government is creating

trade policy

One method for studying opportunity cost is to think in terms of risk and ability. pros and cons. tradeoffs trial and error.

tradeoffs

Three major kinds of economic systems exist

traditional, command, and market.

Social Security payment by the government is a (n)?

transfer payment

Automated Clearing House

transfers money between the accounts of the payers and payees without the use of checks

Which best describes the purpose of advertising?

transmit product messages to an audience

Fedwire

transmitting large payments between the Fed for business customers

To create the proper tone for an argumentative essay, a writer should include opinionated words. add complicated language. incorporate unusual stories. use a straightforward approach.

use a straightforward approach

outsourcing

using foreign resources instead of domestic resources

If the system falls short,

we may demand laws to change the system until needs are met.

Which of the following could be considered both a renewable resource and a nonrenewable resource? iron ore sea water solar energy wheat crop

wheat crop