Unit 4: Demand Supply Market Forces, Unit 3: Doing Business in a Market Economy, Unit 2: Economic Systems and Role of Government, Unit 1: Act Like an Economist

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

$3

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

1. Insulin 2. Jewelry

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

Completing a project

According to this graph what happened to the equilibrium price when the demand curve shifted?

Equilibrium price increased.

_______________are an example of commodity money.

Furs

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

a financial capital

The Fulton County Teachers Credit Union is an example of a

cooperative

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

fiat money

Kelly has an absolute advantage over Karen in

in mowing the lawn

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

monopolistic competition

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

monopoly

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

monopoly

If the factory is producing at point E

more tennis balls and motorcycles could be produced.

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

petroleum

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

public goods and services.

The demand curve

slopes down to the right

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

$8, 8

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2 pies

What is the equilibrium quantity in this table?

3

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

3 pies

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

3 pies.

The opportunity cost of moving from point C to D is

3.5 motorcycles

At point B ______ motorcycles and ______ tennis balls can be produced?

6, 6000

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

9

Which of the following scenarios could this graph illustrate?

A new airline began to service Atlanta providing more international flights.

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

An automobile assembly plant using robotics.

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

Capitalism

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

D is pointing outwards to D1

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

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

Which of the following is NOT an accurate statement about economic systems?

Dictatorships and totalitarian regimes do not have economic systems.

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

Durability, Limited in supply, Portability, Divisibility

What does point F represent?

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

Jackson opened a furniture store as a sole proprietor. During the recession, business declined and he was not able to pay his suppliers and creditors. Due to unlimited liability

His creditors may ONLY seize the assets of his store such as furniture and equipment.

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

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

How is the equilibrium price determined?

It is based on trial and error in the market place.

How is the "total receipts test" used in economics?

It is used to determine elasticity of demand.

Which of the following is an example of barter?

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

Based on the concept of comparative advantage

Jamie should make paper airplanes and John should make cookies.

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

Japan

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

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

In order to be most efficient and enjoy comparative advantage

Kelly should mow the lawn and Karen should rake leaves.

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

Labor Union

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

OPEC (Organization of Petroleum Exporting Countries)

Which of the following are characteristics of the free enterprise system? Check all that apply.

People are motivated to seek profit, People choose their professions and jobs. Businesses choose the products to make, Buyers and sellers voluntarily exchange goods in the market place, Private property is protected.

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

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

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

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

Which economic concept does the scene in the photo best present?

Specialization

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

Stage 2

Which of the following scenarios might be illustrated by this graph?

Super Cycle when out of business and fewer bicycles are supplied at every price.

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

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

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

The quantity of SUV's demanded increased because the price was lowered.

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

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

In the condition of market equilibrium,

There is no shortage or surplus of goods and services.

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

Where will the goods and services be produced?

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

a corporation

A consumer good such as a car or refrigerator that typically lasts more than three years is called

a durable good

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

a highway

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

a positive incentive

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

a shift or decrease in quantity supplied.

Price floors usually legislate prices that are

above equilibrium price.

Marginal cost refers to

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

To deal with scarcity, society must __________ scarce resources.

allocate

The graph shows ______________from Q1 to Q2.

an increase in demand

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

an increase in quantity supplied.

An externality is

an unplanned cost or benefit of economic activity.

Shortages differ from scarcity in that shortages are

are a temporary condition.

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

be high

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

capital goods

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

changes in quantity supplied.

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

checking accounts, travelers checks, cash

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

comparative advantage

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

consumer goods

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

cooperative

Which business form is subject to the most government regulation?

corporation

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

credit card

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

demand for buns is likely to increase.

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

drawing by which resources go to the luckiest individual

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

economic equity

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

entrepreneurship

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

equilibrium

Which of the following items is NOT scarce?

garbage

Increasing worker productivity involves

getting more output with fewer inputs.

Economic wants can be best defined as

goods and services that people would like to obtain

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

government regulation

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

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

One advantage of a corporation is that it

has limited liability

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

how competitive it is.

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

in the factor market

When industry utilizes new technology it generally leads to

increased productivity.

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

increasing

The circular flow model demonstrates the ___________of our economy.

interdependence

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

it decreases

A word that means the same as human capital is

labor

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

market

Which economic system encourages entrepreneurship?

market

In this graph the arrow is pointing to

market equilibrium

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

market forces.

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

merged

In economics terms, incentives are defined as

motivations that influence people's choices and decisions.

Land, water forests, and minerals are examples of

natural resources

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

negative externalities.

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

nursing

The airline industry is considered to be a(n)____________.

oligopoly

The scenario is calculated on

outputs

This scenario is calculated on

outputs

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

owns stock in the company making her part owner.

To invest in human capital, an entrepreneur might

pay for employees to earn credits toward advanced degrees

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

perfect competition.

The line indicated by the red arrow illustrates a

price ceiling

Minimum wage laws mandate a type of

price floor

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

price floor

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

professional organization.

Which of the following is an example of a price ceiling?

rent controlled apartments in Manhattan

Unlimited wants + limited resources =

scarcity

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

scarcity

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

shares responsibility and the work load.

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

shoes

Price ceilings can lead to __________in the market place.

shortage

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

shortage

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

steel wire made from iron ore

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

store of value

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

studying for a test

The market or equilibrium price is the point where

supply offered by producers equals demand from consumers.

What condition happens in the market place at the price shown in this graph?

surplus

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

the amount of goods or services produced with inputs

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

the central government

The law of demand is based on an inverse relationship which means that

the higher the price of the good or service, the less the consumer will be willing to buy.

Consumer sovereignty refers to the

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

In Economics terms, scarcity can be best defined as

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

In economics terms, opportunity cost is defined as

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

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

the number of widgets produced in an hour.

The system of allocating scarce resources by charging high prices favors

the wealthy

Goods are public rather than private if

they are non-excludable and non-rivalrous.

The purpose of government regulatory agencies like the Pure Food and Drug Administration (FDA) and the Securities and Exchange Commission (SEC) is

to protect business against competition from foreign producers with lower standards.

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

traditional

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

trees

Calculating comparative advantage helps individuals, businesses, and companies decide

what to specialize in

Adam Smith, the "father of economics"

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