Final Exam Econ

A country with a pure capitalist economy is

None of these (Sweden, Chinda, US, Canada)

Which of the following is a goal of the leaders of most economic systems?

Prices that vary only slightly

Which of the following would not be studied by a microeconomist?

The total production in a country

Which of the following statements is true

The value of a good may change over time

Making a good economic decision requires two scarce resources. What are they?

Time and Information

Free enterprise allows:

buyers and sellers to exchange goods in a free market, with price indicating value

The circular flow of economic activity can be summed up as:

households earn money by selling their factors of production to firms in the factor market and use that money to buy goods and services from firms in the product market.

If Joe values a cookie at 1.50 and Sue values it at 2, this is an indication that:

the cookie is relatively more scarce to Sue than it is to Joe

The biggest disadvatnage in a command economy is:

the lack of incentive for individuals

China and Russia are:

transitional economies

Which of the following is not an example of a good? A. A doctor's appointment B. A CD C. A lamp D. A pair of socks E. A photograph

A. A doctor's appointment

Assume you get $20 a week as allowance and you make $8 an hour at your job. If income, I, is the dependent variable, and hours worked, H, is the independent variable, which of the following represents a reasonable equation for the line relating income to hours worked? A. I= 20+8 x H B. I=20 - 8 x H C. H= 28xI D. H= 8 + 20 x I E. None of the above

A. I= 20+8 x H

True or False: Adam Smith believed an "invisible hand" guides resources to where they produce the greatest benefit for all. A. True B. False

A. True

Goods and services are not: A. available in greater amounts that would be wanted even if they were free B. desired C. scarce D. produced using resources E. valuable to someone

A. available in greater amounts that would be wanted even if they were free

Scarcity: A. exists when there are limited resources available to satisfy unlimited wants B. is the same for all goods and services at all times C. exists when items are rare D. exists for all things E. exists only for people who do not have a lot of money

A. exists when there are limited resources available to satisfy unlimited wants

True or False: People are born with a specific and unchangeable amount of human capital. A. True B. False

B. False

True or False: Rent is the payment a labor owner receives. A. True B. False

B. False

True or False: The dependent variable "depends" on the independent variable, which means the value of the independent variable responds to the values of the dependent variable. A. True B. False

B. False

True or False: The laissez-faire policy that Adam Smith advocated in Wealth of Nations calls for the government's involvement in trade and markets. A. True B. False

B. False

True or False: The three basic economic questions are: What goods and services will be produced? How will the goods and services be produced? What price will be set for the goods and services? A. True B. False

B. False

True or False: The type of economic system people live in determines how economic decisions are made. These decisions tend to be made by government order, tradition, or group choice. A. True B. False

B. False

Which of the following is not a characteristic of the market-based economy of the U.S.? A. The means of production are privately owned. B. It's a pure market economy. C. It includes some characteristics of traditional and command economies. D. Buyers and sellers interact through price signals. E. There's some government regulation.

B. It's a pure market economy.

In a line graph, the origin: A. the point where the line intersects the vertical axis. B. both the point where the horizontal and vertical axes meet and the point where both the dependent and independent variable equal 0. C. the point where both the dependent and independent variable equal 0 D. the point where the horizontal and vertical axes. E. the point where the line intersects the horizontal axis.

B. both the point where the horizontal and vertical axes meet and the point where both the dependent and independent variable equal 0.

Economies based on tradition do not: A. determine decisions based on customs. B. let market forces determine production decisions. C. worry about the three fundamental economic questions. D. determine decisions based on religious practices. E. determine decisions based on ancestors' decisions.

B. let market forces determine production decisions.

Which of the following is an advantage of pure capitalism

Buyers and sellers interact to exchange goods

Which of the following is not a factor used in the production of goods and services? A. Entrepreneurship B. Capital C. Income D. Land E. Labor

C. Income

Which of the following is not apart of the "Circular Flow of Economic Activity?" A. Markets for factors of production B. Markets for resources C. Markets for free goods D. Product markets E. Markets for labor

C. Markets for free goods

Say that the line labeled A is moved and becomes the unlabeled line. Which choice below accurate describes the change? A. The intercept increased B. The intercept decreased C. The slope increased D. The slope decreased E. None of the above

C. The slope increased

A microeconomist is most likely to study: A. monetary policy B. the economic behavior of a nation C. how a household spends its money D. the unemployment rate E. gross production

C. how a household spends its money

Pure capitalism is characterized by: A. public ownership of resources and the use of prices to coordinate economic activity in unregulated markets. B. public ownership of resources and the use of a central planner to coordinate economic activity in regulated markets. C. private ownership of resources and the use of prices to coordinate economic activity in unregulated markets. D. private ownership of resources and the use of a central planner to coordinate economic activity in unregulated markets. E. private ownership of resources and the use of prices to coordinate economic activity in regulated markets.

C. private ownership of resources and the use of prices to coordinate economic activity in unregulated markets.

On a line graph, when the dependent variable increases following an increase in the independent variable, there is a direct relationship between the variables, and: A. the line will decrease as it goes to the right B. the line will increase as it goes to the right C. the line will increase as it goes to the right and the slope of the line is positive D. the slope of the line is positive E. the line will decrease as it goes to the right and the slope of the line is positive

C. the line will increase as it goes to the right and the slope of the line is positive

The slope of a line is: A. always a negative number B. measured as the run over the rise C. the vertical change over the horizontal change D. the horizontal change over the vertical change and always a negative number E. the horizontal change over the vertical axis

C. the vertical change over the horizontal change

A factory belongs to which category of the factors of production?

Capital

Which of the following is not an economic goal of leaders of most nations? A. Growth B. Full employment C. Efficiency D. Excess goods and services E. price stability

D. Excess goods and services

Economists typically use which type of graph to study and demand? A. Bar chart B. Economists rarely use graphs and charts. C. Pie chart D. Line graph E. Time series graph

D. Line graph

Capital: A. is not part of the production process. B. is only knowledge and skills C. is only machinery, buildings, and equipment D. can refer to physical or human capital E. is money

D. can refer to physical or human capital

An example of an economy based on a market economy is: A. China B. Cuba C. North Korea D. the U.S. E. the Hindu caste system of India

D. the U.S.

An economist's definition of economics is: A. Field of business B. a way of making decisions based on a gut feel C. microeconomics and macroeconomics D. the study of human behavior constrained by scarcity E. A social science concerned chiefly with description and analysis of the production. distribution and consumption of goods and services.

D. the study of human behavior constrained by scarcity

Which of the following is not a concern of normative economics? A.Moral issues B.Prescribing actions people should take C.Recommending policies or actions D.Descriptions of how people interact E.Political issues

D.Descriptions of how people interact

Which of the following is not a concern of positive economics? A.The effects of raising the minimum wage B.Whether or not raising the sales tax will decrease total sales C.The effects of lowering the capital gains tax D.Whether or not raising the minimum wage is the morally right thing to do E.The effects of regulation on an industry

D.Whether or not raising the minimum wage is the morally right thing to do

Which is not an example of someone acting in his or her own rational self-interest? A.Someone being very miserly with their money B.Someone donating money to charity C.Someone volunteering in a rescue mission D.Someone aggressively playing the stock market done E.All of the above are examples of someone acting in his or her own rational self-interest.

E. All of the above are examples of someone acting in his or her own rational self-interest.

In a line graph, the vertical intercept is: A. the point where the line intersects the horizontal axis B. the point where the vertical axis variable equals 0 C. the point where the horizontal and vertical axes meet. D. the point where the line intersects the horizontal axis and the point where the vertical axis variable equals 0 E. the point on the line where the horizontal variable axis equals 0.

E. the point on the line where the horizontal variable axis equals 0.

A recession is defined as: A. the total output of the economy not rising for two or more months. B. the total output of the economy declining for five or more months. C. the total output of the economy rising for two or more months. D. the total output of the economy not rising for four or more months. E. the total output of the economy declining for six or more months.

E. the total output of the economy declining for six or more months.

Which of the following is not a cost associated with going to a movie? A.The movie ticket B.The time spent in that movie C.The enjoyment you'd get from playing a musical instrument instead of going to a movie D.The time it takes to get to and from the theater E.All of the above are costs associated with going to a movie.

E.All of the above are costs associated with going to a movie.

Which of the following is sometimes considered the fourth factor of production?

Entrepreneurship

True or False: An online auction house is not a market since the buyers and sellers are geographically dispersed.

False

True or False: Central planners decide how much of a good will be produced in all economies.

False

True or False: Entrepreneurs are willing to accept risks for an opportunity to earn a salary by producing a new, innovative product or approach to business

False

True or False: One characteristic of a pure command economy is the policy of laissez-faire

False

A command economy is synonymous with:

a centrally planned economy

A mixed economy is:

an economy that incorporates aspects of different types of economic systems

One thing goods and services have in common is:

they both satisfy wants