EPF Module 2

If the opportunity cost for two countries differs for producing different products, this is a basis for trading between countries. This situation describes __________. Absolute advantage Comparative advantage International trade Domestic trade

Correct Response Comparative advantage

What are profits that are distributed to stockholders? Earnings per share Revenue Dividends Required by law

Dividends

An individual who buys goods and services to satisfy unlimited wants and needs would fall into which category in the circular flow model? Household sector Business sector Government sector Market sector

Household sector

Which of the following would MOST LIKELY cause the federal deficit to decrease? Increase income taxes Decrease income taxes Increase federal spending Build more schools

Increase income taxes

A new electronics store sells game systems for $250. The store across the street used to sell their game systems for $299, but they had to reduce their prices to $249 in order to get customers. The reduction of prices represents which economic term? Command economy Government control Invisible hand Communism

Invisible hand

If the government runs activities such as healthcare, libraries, and the postal service, but citizens and businesses control all other activities in the marketplace, this is an example of ________. Traditional economy Command economy Mixed economy Market Economy

Mixed economy

What is the most likely reason the federal budget has been in deficit for so long? a)Politicians try to maximize their political support by spending more than they tax. b)It is impossible to balance a budget of this size. c)Since the budget has been in deficit so often, government officials have given up trying to balance the budget. d)There is no law requiring a balanced budget, so politicians don't have to worry about a balanced budget.

a)Politicians try to maximize their political support by spending more than they tax.

What must happen to create a trade deficit? a)The U.S. is importing more than it is exporting. b)The U.S. is exporting more than it is importing. c)The U.S. dollar will appreciate. d)The government spends more than it receives.

a)The U.S. is importing more than it is exporting.

What determines the exchange rate? a)The interaction of demand and supply for currencies c)The U.S. government d)The governments of foreign countries d)The exchange rate is fixed.

a)The interaction of demand and supply for currencies

What is the effect of a tariff on imports to the U.S? a)The quantity of imports decreases b)The quantity of imports increases c)The supply of goods in the U.S. market increases d)The price of goods in the U.S. market decreases

a)The quantity of imports decreases

In the circular flow model, households are responsible for ___ while businesses are responsible for ___. a)Production, consumption b)Consumption, production c)Factor markets, product markets d)The flow of products, the flow payments

b)Consumption, production

What is inflation? a)Monetary value of final goods and services produced within a country for a specific time period. b)A measurement used by economics to measures average prices of a market basket of consumer goods and services. c)The rate at which the price level of goods and services rises. d)Movement, whether upward or downward, of economic activity

c)The rate at which the price level of goods and services rises.

What is an advantage of buying a franchise? a)Franchisees must be approved by the parent company. b)Decor and production processes are dictated by the parent company. c)The risk of failure is lower than if one opened a brand new business. d)Owners share profits with the franchiser.

c)The risk of failure is lower than if one opened a brand new business.

If a country grows grapes to produce wine and wheat to produce bread, the costs of which of the following are counted in GDP? Bread and wine Bread Wine Wheat and grapes

Bread and wine

Which of the following reflects the rise and fall of economic activity relative to the long-term growth trend of the economy? Natural monopolies Business cycles Monetary policy Fiscal policy

Business cycles

The output per worker for the United States and China is as follows: USA China iPod 4 5 Cell Phones 6 7 Which one has an absolute advantage in producing iPods and Cell phones respectively? China, China China, USA USA, USA USA, China

China, China

Which is a good example of a trademark? Apple's iPAD James Patterson's newest novel A painting by Monet Target's red bull's-eye symbol

Target's red bull's-eye symbol

If a firm's long-run average cost decreases as production increases, which of the following is being demonstrated? Marginal cost Marginal revenue Economic profit Economies of scale

Economies of scale

Which of the following policies would the government enact to decrease spending? Fiscal Inflation Monetary Monopoly

Fiscal

Increasing government spending to try to reduce unemployment is an example of _________. Laissez-faire Budgeting Monetary policy Fiscal policy

Fiscal policy

Which is an example of a natural monopoly? Public utility company Car manufacturer Wheat farm Airline service

Public utility company

Sedna, her mother, and father fish and hunt animals using some of the same tools that Sedna's grandfather used to hunt. The food they catch is divided among all of the people in the village. Tomorrow, they will hunt for food again to share. This represents which type of economy? Market economy Traditional economy Mixed economy Command economy

Traditional economy

How does the following scenario impact the unemployment rate? ~More companies make information on job listings easily available on the Internet and minimum wage is decreased. a)Unemployment rate goes up and down b)Unemployment rate is increased c)Unemployment rate stays the same d)Unemployment rate is decreased

Unemployment rate is decreased

How can a country maximize the benefits of trade? a)By dealing only with countries that use the same currency b)By importing all of its goods Incorrect Response c)By exporting all of it goods d)By specializing in goods it produces best

d)By specializing in goods it produces best