Economics Final
What is the most common form of business organizations in the United States? • Limited Partnership • Sole Proprietorship • Partnership • Corporation
Sole Proprietorship
Want
Something we desire, but not necessary to have.
What is the largest labor union in the country? • Steel Workers • AFL-CIO • United Auto Workers • Textile Workers
AFL-CIO
Gross Domestic Product
Describes, in dollars, how much is produced within our borders.
Profit motive
Driving force that encourages people and organizations to improve their material well-being
The minimum wage is an example of a federal law that supports • Economic Growth • Full Employment • Economic Efficiency • Economic Equity
Economic Equity
The most important factor in this is an increase in productivity
Economic Growth
Market Economy
Economic system in which supply, demand, and the price system help people make decisions and allocate resources.
Traditional economy
Economic system in which the allocation of resources and nearly all other economic activity stems from ritual or habit
Traditional Economy
Economic system that uses ritual or long standing procedures to determine economic decisions.
Need
Food, Clothing, Shelter. Necessary things to survive.
Fixed Income
Income that does not go up even if prices go up
What is the single largest source of revenue for the federal government? • corporate income taxes • FICA Taxes • Individual Income taxes • user fees
Individual income taxes
Which of the following is NOT a strength of a market economy? • it gives producers and consumers freedom • it supports all of its people equally • it can adjust to change over time • it has decentralized decision making
It supports all of its people equally
Branch of economics that deals with the economy as a whole including unemployment rates, GDP, etc. • Money and Banking • Microeconomics • Macroeconomics
Macroeconomics
Location or other mechanism that allows buyers and sellers to exchange a certain economic product
Market
Which of the following is NOT a theory used to explain differences in wages? • Theory of Negotiated Wages • Signaling Theory • Market Force Theory • Traditional Theory of Wages
Market Force Theory
Elasticity
Measures how responsive a change in price is to the quantity demanded or supplied.
Sole Proprietor
Type of business organization that is owned by a single person
Capacity to be useful and provide satisfaction
Utility
Accumulation of those products that are tangible, scarce, useful, and transferable from one person to another
Wealth
Which of the following is NOT a fundamental question each society must answer? • How to produce? • What to produce? • For whom to produce? • When to produce?
When to produce
Which is not an example of a service?
a bracelet from Kay Jewelers
An example of resource immobility is • a delay in the delivery of an overnight package • building an office park at a former military base • an employee leaving town for a higher paying job • a dam located at the mouth of a river that's run dry
a dam located at the mouth of a river that's run dry
A decrease in competition within an industry can result in • increased output • more efficient use of resources • a firm wielding economic and political power • lower prices
a firm wielding economic and political power
Computer software used to track inventory at a business is an example of • natural resource • fixed resource • labor • capital good
capital good
Which of the following is an example of a good? • an oil change • Car Wash • Tune-up • Car
car
A government document granting permission to create a corporation is called a what? • dividend • proxy • bond • charter
charter
Factors of production
land, labor,capital, entrepenuers
Which of the following courses of action are put in action by the business itself and not the workers? • boycott • picket • lockout` • strike
lockout
When a major car company lowers its prices, other car makers will probably • maintain existing prices • raise their prices • go out of business • lower their prices
lower their prices
The purpose of a government in a command economy is to • ensure the availability of consumer products • make major economic decisions • promote economic freedom • encourage entrepreneurs
make major economic decisions
Which are important for their ability to move resources, products, and financial capital across national boundaries with relative ease? • conglomerates • corporations • mergers • multinationals
multinationals
Which of the following best describes the relationship between trade-offs and opportunity costs? • trade-offs lower the opportunity costs of an economic decision • opportunity costs are the opposite of trade-offs • opportunity costs are incurred when trade-offs are made • trade-offs occur when there are no opportunity costs
opportunity costs are incurred when trade-offs are made
An advantage of a corporation is that • owners have limited liability for debt • owners have direct and immediate control over daily management of the business • the business is subject to little government regulation. • owners pay fewer taxes than owners of other forms of business.
owners have limited liability for debt
The situation in which some necessities have little value while some non-necessities have a much higher value is known as • paradox of value • trade-offs • economic interdependence • opportunity cost
paradox of value
What are workers doing when they are parading in front of a business with signs that display their issues and displeasure? • Boycotting • Locking out • Grievance • Picketing
picketing
As __________ increases the problem of ___________ is only going to get worse. • population, scarcity • utility, wants • needs, risk • scarcity, capital
population,scarcity
Which of the following is NOT a reason why prices effectively perform the allocation function? • competitive markets find their own prices without interference • prices favor neither the producer nor the consumer • prices remain surprisingly stable despite unexpected events • prices are easily understood
prices remain surprisingly stable despite unexpected events (correct answer)
What was the first minimum wage? • $.15 • $.75 • $.25 • $.50
$.25
When employees are getting in each other's way, the firm is operating in what stage of production? • 1 • 2 • 3 • 4
3
Regional differences in wage rates are influenced by all of the following factors EXCEPT • cost of living • location • labor mobility • All of the above
All of the above
Which of the following is not an example of an oligopoly? • Coke and Pepsi • Major Automobile makers • Cell phone carriers • All of the above are oligopolies
All of the above are olgipolies
Which of the following are examples of traditional economies? • North Korea and Cuba • South Africa and Norway • Australian Aborigines and Certain tribes in Africa • United States and Japan
Australian Aborigines and certain tribes in Africa
Who decides whether a corporation will reinvest its money or not? • Board of Directors • Chief Executive Officer • President • Corporate Financial Officer
Board of Directors
Factor of production that includes tools, equipment, machinery, and factories used in the production of goods and services
Capital
People who are 16 years old or older who have a job or are actively looking for a job. • Professional Military Force • Independent Labor Force • Military Labor Force • Civilian Labor Force
Civilian Labor Force
What type of economy recently collapsed in the communist bloc countries of Eastern Europe and the former Soviet Union? • Command Economy • Free Enterprise Economy • Traditional Economy • Market Economy
Command Economy
After World War II the popularity of unions declined because many people thought they were run by what group? • Socialists • Republicans • Democrats • Communists
Communists
Purchasing a product with the hopes of impressing people with a name brand.
Conspicuous Consumption
What type of cooperative often buys bulk amounts of goods such as food or clothing on behalf of its members? • Consumer Cooperative • Producer Cooperative • Service Cooperative
Consumer Cooperative
People who purchase goods and services to satisfy their wants and needs.
Consumers
What terms is described as a voluntary association designed to carry on some sort of economic activity that will benefit members? • Corporation • Multinational • Cooperative • Conglomerate
Cooperative
An apprenticeship, college courses, volunteer work, etc. are all examples of you investing in yourself. These things are known as what? • Job Growth • Employee Contributions • Human capital • Human projects
Human capital
Value
If a product is useful it will have this.
Basic requirement for survival
Need
A product that will more than likely last less than 3 years
Non-durable good
Monopoly
One producer dominates the market
The cost of the next best alternative when a choice is made
Opportunity Cost
Economic system
Organized way in which a society provides for the wants and needs of its people
Which of the following is not a reason why businesses merge: Pay lower than average wages • create more income • create new jobs • bring in new technology
Pay lower than average wages
The concept of voluntary exchange means • No money was exchanged • People and businesses freely and willingly engage in market transactions • Only workers will benefit from the exchange • Neither buyer nor seller has made a profit
People and businesses freely and willingly engage in market transactions
Measure of the amount of output produced by a given number of inputs in a specific period of time.
Productvity
What term is given to people who cross picket lines and take striking workers jobs? • Labs • Crabs • Drabs • Scabs
Scabs
Condition that results from society not having enough resources to produce all the things people would like to have.
Scarcity
An example of a market economy is • North Korea • Former Soviet Union • The Inuit of Northern Canada • The United States
The United States
Intergovernmental Revenue
This government revenue is collected from another level of government.
A monopoly based on the absence of other sellers in a certain location is called • an oligopoly • a natural monopoly • a geographic monopoly • a technological monopoly
a geographic monopoly
Which of the following is a consumer good?
a pair of shoes from Mason Shoe
An increase in the price of milk causes a decrease in the demand for cereal. • substitutes • complements • unrelated • demand elasticity
complements
A corporation that has at least 4 businesses, each making unrelated products, none of which is responsible for a majority of its sales is called a what? • mega-corporation • conglomerate • corporation • multinational
conglomerate
Advertising, fashion trends, and new product introductions serve to • create consumer needs • increase income effectiveness • create consumer demand • minimize income effect
create consumer demand
To reach a point outside the production possibilities frontier a country would have to do what? • shift resources from one item to another • decrease resources • create more resources or become more productive • limit the population
create more resources or become more productive
Which of the following would NOT contribute to economic growth? • capital stock rising • becoming more efficient • increase in population • decrease in productivity
decrease in productivity
For most products and services, increased price results in • demand for fewer products • demand for more products • reduced demand for substitutes • increased demand for complements
demand for fewer products
Monopolistic competition is separated from perfect competition by • collusion • profit maximization • differences in products being sold • price fixing
differences in products being sold
What is the main advantage for companies that become conglomerates through acquisitions of other companies and mergers? • diversification • unlimited life for the company • conglomeration • multinationals
diversification
A market economy • permits extensive government intervention • offers a high degree of certainty for its workers • limits the choices of goods and services available • does not provide for basic needs for everyone including the very old and very young
does not provide for basic needs for everyone including the very old and very young
What is the main strength of the corporate form of business organization? • ease of raising money • freedom from all business taxes • ease of start up • ease of management
ease of raising money
All of the following are characteristics of allocation by rationing EXCEPT • lack of fairness • efficiency • high administrative cost • diminished incentive for workers
efficiency
All of the following are characteristics of capitalism EXCEPT • private property rights • economic freedom • profit motive • extra government control
extra government control
A ___________ is provided by the government and allows a company to do business in a certain area without competition, but they must accept a certain amount of govt. regulation. • franchise • monopoly • patent • corporate charter
franchise
For something to have value, it must • cost a lot of money • be on sale • have utility • never go out of style
have utility
This is the sum of the skills, abilities, health, and motivation of people. • factor market • productivity • GDP • human capital
human capital
This is the sum of the skills, abilities, health, and motivation of people. • human capital • GDP • factor market • productivity
human capital
An example of mandatory spending is financing for • welfare programs • elementary and secondary education • National defense • interest payments on the federal debt
interest payments on the federal debt
The invisible barrier that hinders women and minorities from advancement up the corporate ladder • has been ignored by Congress • is known as the glass ceiling • is the comparable worth issue • has been reinforced by use of set contracts
is known as the glass ceiling
Force that encourages people and organizations to improve their material well-being is the definition for what term? • capitalism • free market • voluntary exchange • profit motive
profit motive
The individual income tax is a(n)
progressive tax
The local chamber of commerce works to • aid member companies in negotiating with labor unions • protect its members from consumer complaints • promote the welfare of its members and the community • earn dividends for members
promote the welfare of it's members and the community
Perfect competition is characterized by all of the following EXCEPT • identical products • well-informed buyers and sellers • a large number of buyers and sellers • sellers acting together to set prices
sellers acting together to set prices
If a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary • surplus will occur and the price will increase • shortage will occur and price will fall • surplus will occur and the price will fall • shortage will occur and the price will increase
shortage will occur and the price will increase
A monopoly that is based on the ownership or control of a manufacturing method, process, or scientific advance is a • natural monopoly • geographic monopoly • technological monopoly • government monopoly
technological monopoly
Unlike a general partnership, in a limited partnership
the inactive partner has limited liability for the business's debts
he two broad categories of government spending are • public and private • defense and welfare • the purchase of goods and services, and transfer payments • payments and transfers
the purchase of goods and services, and transfer payments
Which is an example of economic growth? • the price of vegetables increases sharply in the spring • a man decides to quit working and begin a new career • an employer is fined for refusing to hire women to fill openings • when a new ball bearing plant opens and 1,500 jobs are created
when a new ball bearing plant opens and 1,500 jobs are created
All of the following are reasons women receive less pay than men EXCEPT • women do not work as hard as men • women tend to enter lower paying fields • women encounter discrimination • women have different skills
women do not work as hard as men
Market System
Economic system where buyers and sellers create prices.
Command economy
Economy in which a central authority makes most of the what, how, and for whom decisions
Something that cannot be touched
Intangible
Marginal Utility
It is the difference in satisfaction between units that a consumer purchases.
Microeconomics
It is the study of how individual consumer choices impact markets
Factor of production that could include climate, minerals, sunshine, trees, etc.
Land
Factors of Production
Land, Labor, Capital, and Entrepreneurs
For something to have value, it must • never go out of style • be on sale • have utility • cost a lot of money
have utility
Because a large price increase has little or no effect on demand the product is
inelastic
Which of the following is not one of the market structures we have discussed in class? • monopolistic competition • monopoly • oligopoly • inelastic competition
inelastic competition
The largest source of revenue for states is • property taxes • sales tax • income taxes • intergovernmental revenues
intergovernmental revenues
In a general partnership • partners must pay specific business taxes • partners are only liable for the business's debt up the amount of their investment • the business continues even if one partner dies • partners usually draw up legal papers called articles of partnership and share in the business equally
partners usually draw up legal papers called articles of partnership and share in the business equally
Which characteristic does not fit in the definition of an economic product - goods and services that are . . . • relatively scarce • permanent • transferable to others • useful
permanent
As __________ increases the problem of ___________ is only going to get worse. • utility, wants • population, scarcity • scarcity, capital • needs, risk
population, scarcity
In a market economy, a high price is a signal for • producers to supply less and consumers to buy less • government to intervene to protect consumers • producers to supply less and consumers to buy more • producers to supply more and consumers to buy less
producers to supply more and consumers to buy less
A lawyer would fall into what labor category?
professional labor
The "incidence of a tax"
refers to those who bear the burden of final taxation
A high tax designed to raise revenue and reduce consumption of a socially undesirable product • commodity tax • sin tax • no good tax • sales tax
sin tax
Workers who have the skills to operate complex machines or work in occupations that require a lot of training are said to be this type of laborer. Examples would included plumbers and electricians.
skilled labor
The supply of a product normally decreases if • the cost of inputs goes down • the price of the product increases • more producers enter the market • taxes on the product increase
taxes on the product increase
When producers offer fewer products for sale at each and every price, • the supply curve has shifted to the right • the price per unit decreases • they expect subsidies • the supply curve has shifted to the left
the supply curve has shifted to the left
All of the following are characteristics of a command economy EXCEPT • it can change directions drastically in a brief period of time • it provides workers with few incentives to work hard • there is a lot of uncertainty in terms of whether a person will have a job or where they will work • it is not designed to meet the wants of consumers
there is a lot of uncertainty in terms of whether a person will have a job or where they will work
Services are not counted as wealth because • prices for them are different all over • they are too easily produced • they are hard to measure • they are intangible
they are intangible
Unions are important in today's economy because
they played a major role in promoting legislation affecting wages today • they played a major role in promoting legislation affecting working conditions today • they have a membership of nearly 14.2 million people • all of the above (correct answer)
All of your alternative choices whenever making an economic decision are considered
trade offs
Social Security is an example of a • private sector expenditure • transfer payment • pork spending • subsidy
transfer payment
The Great Depression
turned popular opinion in favor of unions
Dishwashers, fast food workers, and lawn mowers would fall into what category of labor? • professional • skilled • unskilled • semiskilled
unskilled
A merger of corporations involved in different steps of manufacturing or marketing merge is known as a • conglomeration • vertical merger • multinational merger • horizontal merger
vertical merger
Having steak and potato for supper instead of bread and water is an example of expressing a what? (In terms of economics) • craving • utility • need • want
want
An example of perfect competition in the United States would be • soda industry • wheat farming • airline industry • All of these would be examples.
wheat farming
Horizontal mergers involve • 2 or more firms that produce different products • 2 or more firms in different countries • 2 or more firms that produce the same type of product • 2 or more firms involved in different steps of manufacturing and marketing
2 or more firms that produce the same type of product
During the height of the Great Depression the unemployment rate in the United States reached what? • 25% • 10% • 50% • 75%
25%
Opportunity Cost
A benefit, profit, or value of something that must be given up to acquire or achieve something else.
Oligopoly
A few producers that dominate a market
Corporation
Business organization that can have millions of owners and is closely monitored by the government
Which group of people ultimately determines the products that a free enterprise economy produces? • Consumers • Local government • Property owners • Congress
Consumers
Which of the following is most likely NOT a nonprofit organization? • Corner Grocery Store • Church • Neighborhood Association • Public School
Corner Grocery Store
This is the type of union with skilled workers who perform the same type of work. • Common Union • Craft (Trade) Union • None of the answers • Industrial Union
Craft (Trade) Union
Consumer Sovereignty
Role of consumer as ruler of the market when determining the types of goods and services produced
Competiton
Struggle among sellers to attract customers
The traditional theory of wage determination holds the differences in wage rates can be explained by • Labor Volatility • Supply and Demand • Regional Wage Differences • Collective Bargaining
Supply and Demand
Scarcity
The fundamental economic problem is what? Expenditures Term used for tax dollars spent by a government.
Inflation
The rise in the general level of prices
All of the following are reasons for declining union membership except • many employers have made a determined effort to keep unions out of their businesses • Many new workers are second-income earners who tend to accept lower wages • More women and teens entering the work place • Unions have stopped working for better conditions and wages
Unions have stopped working for better conditions and wages
Theory of Negotiated Wages
The wage theory that states the differences in wage rates are determined by collective bargaining
Production Possibilities Frontier
This graph shows the opportunity costs for countries based on using resources to make guns and butter
Budget Deficit
This happens when the government takes in less revenue than it spends
Budget Surplus
This happnes when the govenrment takes in more revenue than it spends
Economics
This science studies how people use limited resources to satisfy unlimited wants.
Alternative choices made by consumers in the marketplace
Trade offs
Proportional Tax
Type of tax that assigns the same percentage for every taxpayer, no matter how much they earn.
Regressive Tax
Type of tax that charges more tax for earning less money.
Progressive Tax
Type of tax that charges more taxes for earning more money
Who would you most likely find participating in a market economy? • a teenage girl deciding how to spend the extra money she earned working over time • a government official deciding how much wheat to plant this season • a worker deciding to leave his job early because the production quota has been met • a hunter deciding where to hunt to provide his family with a meal that night
a teenage girl deciding how to spend the extra money she earned working over time
Division of labor is a characteristic of • all man made products • entrepreneurship • assembly line production • home craft businesses
assembly line production
An economy at its production possibility frontier is operating • with slow economic growth • without division of labor • as a free enterprise economy • at full potential
at full potential
Manufactured goods needed to produce other goods are services are called
capital goods
Which of the following groups of workers formed one of the first unions? • auto workers • steel workers • cigar makers • plumbers
cigar makers
What group of workers usually have the lowest unemployment rate among the 4 listed?
college graduate
When a customer's need for a product is not urgent, demand tends to be • Inelastic • elastic • complementary • unit elastic
elastic
The largest category of spending for most local governments is • elementary and secondary education • public welfare • hospitals • police protection
elementary and secondary education
Why are entrepreneurs important in a market economy
entrepreneurs start new businesses
Which of the following is an advantage that makes sole proprietorships popular among new business owners? • sole proprietor does not get to decide what to do with profits • owner has more access to cash • more control of the business • shared liability
more control of the businesses
Which of the following is an example of discretionary spending? interest on the national debt • national defense • social security • Medicare
national defense
