Econ Final

If Brenda chooses to pay $10 for a movie ticket, rather than work for 3 hours at $8/ hour. What is her opportunity cost?

$34

The purpose of the WTO is:

. Hear trade complaints about other country's trading policies.

Match the items.The task is to match the lettered items with the correct numbered items. Appearing below is a list of lettered items. Following that is a list of numbered items. Each numbered item is followed by a drop-down. Select the letter in the drop down that best matches the numbered item with the lettered alternatives. a. Tariff b. Embargo c. Import quota d. Voluntary trade restriction 1. Tax on an imported good 2. Fixed amount of a good that can be imported 3. Binding agreement between two nations 4. Law cutting of imports or exports to or from a specific country

1. A 2. C 3. D 4. B

Match the items.The task is to match the lettered items with the correct numbered items. Appearing below is a list of lettered items. Following that is a list of numbered items. Each numbered item is followed by a drop-down. Select the letter in the drop down that best matches the numbered item with the lettered alternatives. a. Capital b. Utility c. Scarcity d. Land 1. Results from unlimited wants in a society of limited resources 2. Natural resources not created by humans 3. Tools, equipment and facilities needed to produce goods 4. The ability to satisfy needs and wants

1. C 2. D 3. A 4. B

Match the items.The task is to match the lettered items with the correct numbered items. Appearing below is a list of lettered items. Following that is a list of numbered items. Each numbered item is followed by a drop-down. Select the letter in the drop down that best matches the numbered item with the lettered alternatives. a. Recession b. Expansion c. Peak d. Trough 1. Match the phase to its description. Period of time at which the economy will begin a recession. 2. Point at which GDP will have reached its lowest and will begin to increase. 3. Time at which GDP is falling. 4. Sustained period at which GDP is increasing.

1. C 2. D 3. A 4. B

Match the items.The task is to match the lettered items with the correct numbered items. Appearing below is a list of lettered items. Following that is a list of numbered items. Each numbered item is followed by a drop-down. Select the letter in the drop down that best matches the numbered item with the lettered alternatives. a. Owns basic means of productions & decisions b. Peaceful changes to improve economic conditions - basic human rights, some control, free elections c. Distribute wealth & economic opportunity Control all major production decisions Public ownership of most land, factories, and production d. Great Britain, Tanzania e. Free Enterprise with the support of the gov't f. gov't owns basic means of production & determines products/wages & provides social services g. Buyers & Sellers by their actions h. No individuality, big gov't - dictatorships, HIGH taxes i. Compete to produce Compete to buy Compete for Jobs j. Preserve Free Market- Regulate foreign trade- Provide Social Services Gov't is the largest buyer & seller of goods 1. Who makes economic decisions in a "free market enterprise economy?" 2. What role does competition play in a "free enterprise economy?" 3. What role does the American Government play in our capitalist system? 4. Explain "Mixed Markey Economy" and the role the government plays in our economy. 5. Socialism 6. What is Democratic Solialism 7. What role does government play in Democratic Socialism 8. What are 3 main goals of socialism 9. Examples of a Democratic Socialism include 10. What are drawbacks to Democratic Socialism

1. G 2. I 3. J 4. E 5. F 6. B 7. A 8. C 9. D 10. H

Put the items in the correct order.Below is a sequence of events. Place them in the order they should occur, number 1 being the first item. Select the step number from the drop down next to each item. Items to order: 1. Industrialization caused problems 2. poverty class /poor conditions 3. planned society to share the benefits of industrial production

1=1 2=2 3=3

If a production possibilities curve shifted inward, this would mean that

A country lost some resources

When individuals outside of a company bear part of the company's production cost, this is called

A negative externality.

What is the difference between a shortage and scarcity?

A shortage is only a temporary condition while scarcity is permanent.

A certificate of deposit is an example of:

A time deposit

The difference in a country's imports and exports is known as its:

Balance of trade

Country A can produce 25 million lbs of oranges, or 5 million lbs of apples. Country B can produce 10 million lbs of oranges, or 2 million lbs of apples.

Both countries have comparative advantage for producing oranges.

Economics is the study of

Choices

A strong dollar is better for:

Consumers

Country A can produce 50 million widgets, or 25 million bobbles. Country B can produce 120 million widgets, or 40 million bobbles. Which country has the comparative advantage for producing bobbles?

Country A

Country A can produce 50 million widgets, or 25 million bobbles. Country B can produce 120 million widgets, or 40 million bobbles. Which country has the absolute advantage for producing bobbles?

Country B

If the price of timber significantly increases, the supply of homes will

Decrease

If a country is operating at a point on the production possibilities curve, this would represent

Efficiency

Part of the decrease in union membership recently has to do with

Employer opposition

The main purpose of tax incentives for businesses is to:

Encourage new investment, and increase aggregate demand.

According to the law of supply, price and quantity supplied have an inverse relationship.

False

Arguments for free trade include the idea that it will improve national defense.

False

Being conservative in financial planning means to underestimate expenses, income, etc.

False

Britain experiences depreciation of their pound. This makes their products more expensive for Americans to buy.

False

Cancelling a credit card will not affect your credit rating.

False

Clothing is an example of a fixed expense.

False

Combinations that fall on the inside of a production possibilities curve represent efficiency.

False

Competition tends to decrease supply.

False

During the presidencies of JFK and Johnson, tax increases helped to create economic expansion.

False

Elasticity of supply explains the degree to which non-price determinants affect the quantity supplied.

False

Expansionary fiscal policy favors tax increases.

False

If the dollar were expected to depreciate in comparison with the British pound, U.S citizens would probably be more inclined to plan a vacation to Britain than previously.

False

In a "Free Market" buyers and sellers are NOT free to make unlimited economic decisions

False

One main cause of the Great Depression may have been the increase in stock values due to investors selling at the peak of the economy.

False

Producers buy products.

False

Rationing is fair, but expensive.

False

Savings bonds are risky because they are not guaranteed by the government.

False

Self-interest hinders economic efficiency.

False

The U.S has a trade surplus.

False

The amount of money remaining after producers have paid their costs is called revenue.

False

The amount of product available at a given price is supply.

False

The growth of exports has decreased over the past 50 years.

False

The plan to increase or decrease supply of money in the economy by the fed is called fiscal policy.

False

The purpose of a credit score is to notify borrowers of the best lenders.

False

When real GDP is in decline for a prolonged period of time, this is called recession.

False

Production costs that do not change as the level of output changes are called

Fixed Costs

The three basic economic questions include: What to produce, How to produce and

For Whom to Produce

Which of the following can be classified as a good?

Hotel Room Flowers

What are the 3 major economic decisions that ALL Economic Systems must make?

In a "Free Market" buyers and sellers are NOT free to make unlimited economic decisions How goods and services should be produced Who should get the goods and services that are produced

If the price of widgets increases from $200 to $300, the quantity supplied will

Increase

A construction company adds one worker each week, on a construction project. They add no other inputs. What will happen to marginal productivity?

Increase initially, but then decrease eventually.

If a country wanted to decrease the value of its dollar it would:

Increase the supply of money.

The payment an individual receives in return for lending their money to a financial institution is called:

Interest

If the U.S dollar appreciates compared to the British pound, it will become:

Less expensive to buy British products.

One disadvantage of a sole proprietorship is lack of

Longevity

Agriculture is an example of which market?

Perfect Competition

The production possibilities curve represents

Possible combinations of two goods or two services that can be produced.

When loaning money the amount that is borrowed is referred to as the:

Principal

When all members of a group consume a good or service this is called a

Public good

A surplus exists when

Quantity supplied is greater than quantity demanded.

The price of t-shirts increases. This will cause

Quantity supplied to move along the curve to the right.

When economists adjust GDP for inflation, or price increase, this is called:

Real GDP

Interest based upon the original amount of the loan is called:

Simple Interest

If determinants of supply cause a decrease in supply, this will cause

The curve to shift left.

What explains the bowed out shape of the production possibilities curve?

The law of increasing opportunity costs

Factors that help determine your credit score include all of the following EXCEPT:

The number of dependents you have.

When economists determine what part of the business cycle the economy is operating at they inspect leading indicators such as:

The price of raw materials

Typically, interest rates are lower at which part of the business cycle?

The trough

This sets the limit on the number of a specific good that can be imported into a country.

Trade restriction

"Laissez-Faire" IN RELATION TO CAPITALISM is: Adam Smith- Wealth of Nations- Gov't stay out of economy- limit to a few actions needed to ensure free competition

True

A system of exchange that does not involve money is called barter

True

An increase in income taxes is an example of contractionary fiscal policy.

True

Appreciation of currency, means that you can buy more with the same amount of money, than you could prior to appreciation

True

Credit agencies weigh your payment history more heavily than other factors in determining your credit rating.

True

Credit can help promote stability in an economy.

True

Depreciation of capital goods is considered a fixed cost.

True

Equilibrium occurs when supply and demand are equal.

True

Governments tend to intervene to keep their nations' currency value from rising too high.

True

If a production possibilities curve shifts to the right, this means that an improvement in technology has occurred, or more resources have been made available.

True

In a free-enterprise market, producers and consumers communicate through price.

True

In order to limit inflation government raises taxes.

True

In order to limit inflation, government decreases their spending.

True

Money's function as a unit of account makes it possible to measure the worth of items or services.

True

One argument against trade is that it will hurt domestic industries.

True

One function of money is to serve as a store of value.

True

One purpose of regulating business activity is to decrease negative externalities.

True

Rationing can lead to black markets

True

Rent is considered a fixed expense.

True

The amount of goods and services produced from a given amount of inputs is called productivity.

True

The purpose of a tariff is to make a foreign good more expensive than a domestic good.

True

The relation of one currency in terms of another currency is called the foreign exchange rate.

True

The standard of living is improved as a country moves from inside the production possibilities curve to operating on the production possibilities curve.

True

The standard of living only improves when goods and services are increased.

True

Trees could be considered a resource.

True

Wear and tear on equipment is considered a fixed cost

True

The satisfaction or usefulness derived from a good is called

Utility

Money is:

a. Any good that is accepted for the purpose of exchange. b. A good accepted for the repayment of debts. d. A common measurement by which values are expressed.

Which of the following have inelastic supply?

a. Automobiles b. Diamonds d. Full-grown crops

Which of the following are examples of fiscal policy tools?

a. Changes in business taxes. b. Changes in income taxes.

Which of the following might cause the government's role in the economy to grow?

a. Economic hardship b. Economic prosperity d. National emergencies

Part of creating a budget includes:

a. Identifying realistic expectations b. Analyzing past behavior c. Assessing current situations

Which of the following could be examples, that would encourage increased production?

a. Jill, a corn farmer, receives a subsidy from the government. d. Tax cuts are put in place for small businesses.

Possible causes of the Great Depression include:

a. Lack of diversification. d. Overreliance on installment buying and credit.

Which of the following are factors of production?

a. Natural resources b. Human resources c. Entrepreneurship d. Capital resources

What are the 5 main characteristics of Capitalism

a. Private Ownership & Control of property & economic resources b. Free enterprise c. Competition d. Freedom of Choice g. Possibility of Profits

Which of the following are determinants of Supply?

a. Resource prices b. Technology d. Prices of related goods

Which of the following could be considered income?

a. Scholarship money b. Interest c. Wages

Federal spending categories include:

a. Social Security. b. National Defense.

Operating on the production possibilities curve implies

a. The economy is operating at full employment b. All factors of production are being used efficiently c. The country is most likely utilizing specialization

Some limitations of fiscal policy include:

a. The fact that government policies take too much time to put in place. b. The simple truth that those making fiscal policy decisions are politicians, who are typically afraid of making unpopular decisions d. Not knowing the exact response of the people to fiscal policy decisions.

A credit rating assesses:

a. The likelihood of repayment. b. The credit history of an individual. c. Amounts you currently owe.

Which of the following changes with output?

a. Total Costs b. Variable Costs

Which of the following would be considered as a part of GDP?

c. Computer sold at a U.S store d. A new home

Longevity is an advantage of which type of business structure?

corporation

This business structure is separated legally from its owners.

corporation

What type of monopoly provides public goods?

government monopoly

Name brand clothing, such as American Eagle, is an example of which market structure?

monopolistic competition

Producers spend millions of dollars on advertising under which market structure?

monopolistic competition

Another reason why union membership has declined is

negative public opinion

Partnerships have an advantage over sole proprietorships in

obtaining financial capital

A market structure in which a few large sellers control the market.

oliogopoly

Buyers choose products based solely on price, under which market structure?

perfect competition

Price is set by ____________ in a perfectly competitive market.

supply and demand

One disadvantage of a partnership is

unlimited liability

Most people would say this is the most important factor in choosing a job.

wage