econ final
B
"ceteris paribus" means demand will change when price changes ... A - no matter what other factors may influence the market B - if other market factors remain constant C - only if the supply also does not change D - only in the short-term
C
a change in demand for 1 good will have what effect on its complement ? A - no effect B - different effects at different times C - the same effect D - the opposite effect
A
a firm that is losing money should nevertheless choose to continue operating if its ... A - total revenue is greater than its variable costs B - marginal costs are greater than its total costs C - operating costs are greater than its revenues D - total costs are greater than its total revenues
B
a government hiring freeze would directly impact what aspect of the circular flow model of a mixed economy ? A - businesses B - factor market C - product market D - transfer payments
labor
a sales clerk represents what factor of production ?
B
according to the flow model of a market economy , firms buy factors of production from households , then ... A - sell free markets to households B - use these factors to produce goods & services C - use these factors to eliminate competition D - sell factors of production to households
D
an economy that maximizes its scarce resources & can deliver the right goods in the right quantity to the right people at the right price has achieved which economic goal ? A - equity B - freedom C - security D - efficiency
B
an entrepreneur can best be characterized as someone who ... A - tries to persuade officials to pass favorable laws B - takes risks in order to acquire profits C - signals businesses what & how much to produce D - seeks to engage in a voluntary exchange
A
an opportunity cost is A - the best alternative that is given up when a decision is made B - the cost of making decisions related to producing goods C - the worst alternative that is given up when a decision is made D - a choice that is made when no alternative is very good
C
because of scarcity , every deacons involves a A - marginal benefit B - cost/benefit analysis C - trade-off D - marginal cost
C
drawing a production possibilities c
C
drawing a production possibilities curve helps a country's economists determine A - which resources should be used to produce goods B - how the production of 1 good affects the production of another C - which goods the country can produce
D
for which do you think supply would be more elastic in the short term ? A - producing feature movies B - building skyscrapers C - providing health care D - baking cupcakes
C
government involvement in a modern economy is generally defended because ... A - the market place always meets the needs & wants of society's members B - the market place has many incentives to create public works such as parks C - governments are more able than firms are to meet some needs & wants of society D - free market principles do not encourage economic growth
A
governments have often become involved in market-based economics in order to ... A - address various limits of the free market system B - preserve the traditional economy C - address shortcomings of central planning D - reduce disruptive innovation
B
higher prices lead to increased revenues for a company ... A - always B - sometimes C - never D - only when demand is elastic
A
how do patents act as an incentive to technological innovation A - by protecting a patent holder's right to profit from his or her creativity B - by protecting the government's rights to patent creative works C - by protecting a business's right to profit from someone else's creativity D - by protecting un-patented creative works
B
how do self-interest & competition affect free markets ? A - they work together to keep prices high B - they work together to regulate supply , demand , & prices C - they represent the opposing interests of consumers & producers D - they help level the playing field between efficient & inefficient producers
C
how does improved technology allow the economy to operate more efficiently ? A - it enables people to work fewer hours B - it ensures that all of the nation's resources will be used C - it helps to make better use of the nation's limited resources D - it ensures that all of the nation's workers are employed
B
how does innovation promote economic growth ? A - by reinforcing traditional values in a society B - by introducing new goods & services that create new markets C - by ensuring people's freedom to make their own choices D - by rewarding the development of efficient technology
C
how is a society's economic system defined ? A - by the decisions it makes about who consumers goods & services B - by the trade-offs , it accepts in order to produce goods & services C - by how it answers the 3 basic economic questions D - by the resources it uses to produce goods & services
C
how is gross domestic product used to monitor the business cycle ? A - GDP indicates whether a business is expanding or contracting B - GDP indicates whether a city's economy is expanding or contracting C - GDP indicates whether the nation's economy is expanding or contracting D - GDP indicates whether the world's economy is expanding or contracting
C
how were the soviet union & communist china similar ? A - both suffered from severe economic problems as a result of central planning B - both eventually became free market economies C - both were more successful in developing a thriving agriculture than in developing thriving industry D - both states turned away from communism & were able to avoid collapse
A
in a free market system , the concept of consumer sovereignty means that ... A - consumers have the power to decide through their actions what goods & services get produced B - producers are in an ongoing struggle with consumers over control of the marketplace C - government must intervene to ensure fair competition between consumers & producers D - consumers are not bound to accept the positive incentives offered by producers
C
in determining the optimal level of output , a firm should aim for the ... A - point where decreasing returns become negative returns B - output level where fixed costs exceed variable costs C - point of maximum profitability for the company D - output level where marginal returns are still increasing
D
in economics , the concept of demand is defined as the desire to own something ... A - that has not yet been manufactured or produced B - & a willingness to pay more than other consumers for it C - that a manufacturer is capable of producing D - combined with the ability to pay for it
C
in general , a decrease in consumer income will have what effect on demand for normal goods A - it will have no effect B - it will cause demand to rise C - it will cause demand to fall D - it will cause demand to fluctuate sharply
B
in general , is it a bad move for a company to produce more of a good or service if , by doing so ... A - marginal cost exceeds marginal revenue B - variable costs exceed fixed costs C - demand exceeds supply D - fixed costs exceed marginal revenue
B
in which direction does the supply curve shift when input costs increase ? A - right B - left C - up D - down
C
in which of the following situations would a business be wise to shut its factory ? A - when revenue exceeds variable costs B - when marginal costs exceed fixed costs C - when fixed costs exceed revenue D - when total costs exceed marginal costs
B
in which of these situations would a manufacturers decide to produce more units ? A - the marginal benefit is equal to the marginal cost B - the marginal cost is less than the marginal benefit C - the marginal benefit is less than the marginal cost D - the marginal cost is greater than the marginal benefit
C
it the economy were in the contracting phase of the business cycle , how might that affect your ability to find work ? A - it might be easier to find work because businesses would be more likely to hire new employees B - it might be easier to find work because businesses would have fewer workers to choose from C - it might be more difficult to find work because businesses would be less likely to hire new employees D - it would have no effect on finding work
C
key advantages of free market economic systems include ... A - rising prices , specialization , negative incentives , & multiple markets B - online markets , produce sovereignty , self-interested consumers , & low prices C - economic efficiency , economic freedom , economic growth , & a variety of goods D - positive incentives , negative incentives , specialized consumers
D
police protection & national defense are examples of what government role in the circular flow model ? A - hindering the physical flow of factors between households & firms in the product market B - making purchases of land , labor , & capital in the product market C - contributing to the monetary flow between households & firms in the factor market D - producing goods & services from factors purchased in the factor market
C
private property ownership & some government regulation of the economy are basic characteristics of which economic system ? A - command economy B - free enterprise system C - mixed economy D - traditional economy
D
public goods are examples of market failures because producing these goods in the free market ... A - helps entrepreneurs learn how to distribute public resources B - shows that the free enterprise system cannot distribute resources C - encourages private businesses to distribute resources efficiently D - does not allow for the efficient distribution of resources
C
suppose congress passed a bill funding research into alternative sources of energy ... what best describes this government action ? A - seeking gains in knowledge about the national economy B - monitoring & regulating banks & other financial institutions C - promoting innovation & invention to help maintain technological advantage D - seeking to prevent sudden , drastic shifts in prices
B
suppose demand for a product is highly elastic . what will likely happen to a company's total revenue if it raises the price of that product ? A - total revenue will rise B - total revenue will fall C - total revenue will remain the same D - total revenue will fluctuate
D
the distribution of income received in the form of rent , wages , or interest is the main factor that determines A - how goods & services are produced B - where goods & services are consumed C - who produces goods & services D - who consumes goods & services
A
the due process clauses of the constitution ... A - protect americans' private property rights B - ensure all americans the opportunity to compete C - eliminate barriers to women in the work place D - give congress the right to set direct taxes on incomes
D
the goal of government welfare programs is to ... A - eliminate the dependence of people on the welfare system B - eliminate the income gap between the richest americans & the poorest C - maintain a poverty threshold that matches the median income D - raise the standard of living certain less-fortunate members of society
A
the law of supply declares ... A - supply falls as price falls B - supply increases as price falls C - supply stays the same no matter how prices change D - supply falls as prices increase
D
the phrase "guns or butter" expresses the idea that A - individuals , businesses , & governments , all face trade-offs B - factor resources are limited C - government decisions involve opportunity costs D - government decisions involve trade-offs between military & domestic needs
C
the point on a production possibilities frontier all represent A - underutilization of resources B - the cost of using resources C - the efficient use of resources D - different types of resources
C
the profit motive drives business owners to ... A - protect the private property rights of those who consumer their goods B - see that the principle of open opportunity applies to all americans C - make sure their firm is operating at its highest level of efficiency D - develop incentives for their employees to work fewer hours each week
B
to increase marginal return , a company might consider A - stopping production B - purchasing more machinery C - increasing output D - reducing output
A
what are economists referring to when they say "choosing is refusing" ? A - opportunity cost B - guns or butter C - marginal cost D - thinking at the margin
land labor & capital
what are the 3 factors of production ?
A
what costs might a factory that closes its doors & stops producing goods still face ? A - fixed costs B - variable costs C - marginal revenues D - increasing marginal returns
C
what did karl marx believe about capitalism ? A - it was the inevitable product of socialism B - it distributed wealth fairly in society C - it led to exploitation of workers D - it was the source of all value
D
what distinguishes an authoritarian government from a democratic one ? A - it respects individual rights B - it pursues capitalist economic policies C - it discourages a strong central government D - it requires strict obedience from its citizens
C
what does a firm's supply schedule show ? A - elasticity of demand B - how price changes affect demand for a particular consumer C - how price changes affect supply for a market D - the impact of the substitute effect
C
what does it mean to say that supply is unitary elastic ? A - supply does not change with changes in price B - supply is very sensitive to changes in price C - the percentage change in price & in supply are the same D - a change in supply is observed only if price increases
D
what happens to demand when we drop the ceteris paribus rule ? A - the demand curve becomes straight B - demand always decreases C - demand always increases D - the entire demand curve can shift
B
what is 1 reason centrally planned economies tend to not be efficient ? A - decision-makers do not have enough power B - workers lack the incentive to work harder C - factories produce too many types of goods D - decision making is too decentralized to be effective
D
what is 1 reason that local law enforcement is considered a public good ? A - nobody in the community has to pay for it B - private firms make a profit from producing it C - individual citizens pay directly for it D - everyone in the community benefits from it
B
what is a disadvantage of central planing ? A - no emphasis on economic equity B - lack of economic efficiency C - too much individual freedom D - over-reliance on profit incentive
A
what is an argument that some analysts use to criticize government regulation ? A - it results in inefficiency B - it provides for security C - it endangers safety D - it promotes competition
B
what is critical in determining whether something is produced as a public good ? A - whether the market has the resources to provide it B - whether the benefits to society are greater than the total cost C - whether the government needs to use tax money to provide it D - whether the benefits are limited to the poor
D
what is the main economic benefit of public disclosure laws ? A - they guarantee that businesses can make legally binding contracts B - they protect employees from potential dangers in the work place C - they cut into the profits of highly regulated industries D - they ensure that consumers can make informed buying decisions
shortage
what is the term used to describe a temporary low supply of a good or service ?
D
what might be the economic benefit of the government providing a public good rather than the private sector ? A - decreased prices for the good B - decreased cost for the good C - increased taxes needed to provide the good D - greater efficiency in providing the good
B
what role does competition among producers play in a free market ? A - it forces consumers to pay high prices for what they want B - it causes firms to produce what consumers want while moderating prices C - it encourages firms to produce goods that consumers would never demand on their own D - it allows firms to produce what consumers want while increasing prices
B
what would you consider your demand for a product if you buy the same amount of it or just a small amount less after a large price increase ? A - unitary B - inelastic C - hyper elastic D - elastic
D
when consumers choose not to purchase a good , what is 1 likely response by the producer of that good ? A - raise the price of the good B - keep the price of the good at the current level C - return the price of the good to an earlier level D - lower the price of the good
D
which answer best describes a normal good ? A - a good whose demand is unaffected by changes in price B - a good whose price is unaffected by changes in demand C - a good that consumers demand less of as their income increases D - a good that consumers demand more of as their income increases
A
which basic economic goal is most easily achieved in a traditional economy ? A - equity B - innovation C - growth D - efficiency
D
which factor causes firms to increase production when the price of a good or service goes up ? A - increase in demand B - reduction in costs C - need to unload inventory D - desire for profits
A
which is an example of why the US government makes transfer payments ? A - to support retired people B - to limit economic freedom C - to create a command economy D - to suppress the factor market
B
which of the following best illustrates the involvement of the US government in the market place today ? A - the government takes over an industry in order to control production B - the government requires manufacturers to issue warnings that come with new microwave ovens C - the government hires new workers to help deliver government services to the public D - the government encourages formation of consumer & business interest groups
D
which of the following describes the benefits of specialization in a free market ? A - leads to higher prices B - leads to decreased competition among producers C - leads to lower overall output D - leads to efficient use of capital , land , & labor
C
which of the following explains why firms differ in elasticity of supply in the short term ? A - quality of decision-making B - inability to understand the law of supply C - ease of changing quantity supplied quickly D - changes in market demand
increased productivity
which of the following is a benefit that a business is likely to attain from purchasing new equipment ? A - increased productivity B - better entrepreneurial knowledge C - fewer natural resources required D - lower costs
D
which of the following is an example of the profit motive as an incentive ? A - a producer starts a benefits program for workers B - a shopper chooses a product because of its low price C - a consumer engages in a voluntary exchange D - a business owner expands a factory to make more goods
C
which of the following is typical of a centrally planned economy ? A - competition among producers B - consumer sovereignty C - government control D - private property
B
which of the following represents a difference between socialism & communism ? A - socialism requires central control of all productive resources ; communism does not B - socialism may allow some free market practices ; communism does not C - socialism emphasizes the equal distribution of wealth ; communism does not D - socialism depends on authoritarian government ; communism does not
D
which of the following typically happens as prices for a good or service rises ? A - suppliers leave the market B - consumers seek more of the good or service to consume C - demand becomes increasingly elastic D - more suppliers enter the market
A
which of the following would be an example of a fixed cost on a farm ? A - mortgage on the land B - costs of seed C - fuel to operate machinery D - charge for fertilizer for the growing season
D
which of these is an example of restrictions that government places on the use of business property ? A - corporate income taxes B - regulation of competition C - providing for security D - zoning laws
C
which policy change was partly responsible for economic growth in china starting in the 1970s ? A - promoting new agricultural products B - forcing factory workers to work on farms C - giving farmers the chance to own land D - imposing more controls on chinese farmers
D
which statement describes an opportunity cost ? A - the value in dollars of a trade-off B - the best choice in a decision C - all of the alternatives not chosen in a decision D - the best alternative decision
D
which variables does a supply schedule show ? A - quantity demanded & quantity supplied B - quantity demanded & price C - quantity supplied by individual firms & the market D - quantity supplied & price
C
who makes most basic decisions in a centrally planned economy ? A - market forces B - consumers C - the government D - investors
they promote economic growth
why are entrepreneurs important to the economy ? A - they desire profit B - they promote economic growth C - they have talent D - they are willing to take risks
C
why do government experts track the business cycle ? A - to give the government a competitive advantage over businesses B - to help maintain competitive balance between businesses C - to try to predict what will happen to the US economy D - to provide a record of what has gone wrong in the past
B
why do individuals , businesses , & governments make trade-offs ? A - large groups of people cannot make decisions B - resources are limited C - to make more money D - to promote their values
A
why do markets exist ? A - to allow people to exchange goods & services B - to increate profits for business owners C - to concentrate the productive efforts of individuals D - to allow people to earn money
A
why does a free market economy result in the availability of a wide variety of goods & services ? A - producers have incentives to meet consumers' desires for variety B - the government tells producers what to make C - consumers hae incentives to meet producers' desires D - markets reward producers who can produce a large variety of products
D
why does demand generally become more elastic over time ? A - people don't change their shopping behavior over time B - few substitutes become available C - people buy more products over time D - people have time to find substitutes & change behaviors
B
why is there scarcity in an affluent country like the US ? A - entrepreneurs are scarce & companies need leaders B - resources are limited but wants are unlimited C - some people re poor while others are wealthy D - wants are limited but needs are unlimited
B
why would a federal government decision to increase spending be a matter of macroeconomic policy ? A - macroeconomics concerns the overall performance of the government B - macroeconomics concerns the overall performance of the economy C - macroeconomics concerns the performance of households D - macroeconomics concerns the performance of small businesses