GAVS economic final
Match the term with its description. 1. happens when the value of imports exceeds exports 2. happens when the value of exports exceeds imports
1. trade deficit 2. trade surplus
Match the terms with their description. 1. return 2. risk
1. the profit that is made from an investment 2. the danger of losing money invested
nursing
Based on the data in the graph, which occupation do you predict is most likely yo be experiencing a shortage of qualified applicants?
Mixed market Command Market Traditional
Government programs offer some protection to workers in need. Workers frequently lack motivation and the quality of work suffers as they have no say in their economy. Workers who are not as productive or skilled are at a disadvantage. This system discourages progress and modernization.
How does the chairman of the Federal Reserve Board get his job?
He is appointed by the President and approved by Congress.
S Corporation
Special structure, owners are taxed like sole proprietors or partners, but have liability like a corporation.
Which economic concept does the scene in the photo best present?
Specialization
According to this table, at what stage in the production process do diminishing returns first occur?
Stage 2
Which of the following scenarios might be illustrated by this graph?
Super Cycle when out of business and fewer bicycles are supplied at every price.
Serena Williams came first at Wimbledon and received the prize money.
Which of the following items is an example of allocating resources by holding a contest?
Steel wire made from iron ore
Which of the following items is in the land or resources category for making paper clips?
Garbage
Which of the following items is not scarce?
Voluntary exchange
Willingly trading goods and services for money or other items.
According to this graph, which statement is correct.
Women in all ethnic groups are getting paid less than men in the same ethnic group.
If two countries have a trade dispute, the case will most likely be heard by the
World Trade Organization
Which of the following is the formula for calculating the inflation rate?
Year 2 - Year 1 / Year 1 x 100 = Percent Change
Betty works for Softmac. It has more than a million employees, global locations, a CEO, and a Board of Directors. Betty most likely works for a
a corporation
Fixed Cost
a cost that does not vary depending on production or sales levels; ex. rent
A consumer good such as a car or refrigerator that typically lasts more than three years is called
a durable good
Tax
a fee charged by a government on a product, income, or activity
Money used to build the structure of a coffee shop is called
a financial capital
Complements
a good that is consumed with another good; ex. cereal and milk
Subsidy
a government payment or benefit to a producer of specific products
In most cases, international trade leads to
a higher standard of living across the globe.
Which of the following is a civilian good provided for its people by the US government?
a highway
Utility
a measure of the satisfaction and benefit gained from consumption of goods and services
Dictatorships and totalitarian regimes don't have economic systems
Which of the following is not an accurate statement about economic systems?
Where will the the goods and services be produced?
Which of the following is not one of the three basic economic questions?
Getting a reduced rate on your auto insurance because you are a ticket free and accident free driver is
a positive incentive
How do investors earn money on their stocks? Select all that apply.
capital appreciation (growth in value of the stock), collecting dividends
Human made products that are used for the production of other goods are
capital goods
specialization
individuals do specific tasks in the production of goods and services, i.e., heart specialist
Market Economy (Free Enterprise System, Capitalism)
producers and consumers make economic decisions and the factors of production are privately owned
The National Education Association works for the benefit of its members. It is a
professional organization.
Which of the following is usually a proportional tax?
property tax on homes and real estate
Food stamps, unemployment benefits, and Medicaid are examples of
proportional taxes.
The line indicated by the red arrow illustrates a
price ceiling
Minimum wage laws mandate a type of
price floor
The red arrow in this illustration is pointing to a line that represents a
price floor
Establishing a base year as 100 helps economists
calculate the rate of inflation between years.
If the US dollar appreciates compared to other currencies, US consumers can
can afford to buy more imports.
Law of Variable Proportions
in the short run, output will change as one input is varied while others are held constant
When industry utilizes new technology it generally leads to
increased productivity.
Decreasing taxes and increasing spending would have the effect of
increasing aggregate demand (AD).
Out of the investments listed below, which one carries the greatest risk?
individual stocks
Which of the following individuals is counted as part of the civilian labor force?
Gloria who is a full time teacher
M1
Money in circulation that is liquid, easily accessed and used (cash, checking, travelers checks).
The nations shown in this map are members of
NAFTA
Which of the following statements is true based on this advertisement?
No deposits less than $500 will be accepted at the bank.
Which of the following organizations would fall into the category of a cartel because it sets prices and production level for the industry?
OPEC (Organization of Petroleum Exporting Countries)
Limited Partnership
One or more of the partners contributes capital and shares in the profits, but does not share in the responsibility of day-to-day operations.
Drawing by which resources go to the luckiest individual
One way to distribute scarce resources such as a space at a desired school would be to hold a lottery. A lottery is
consumer goods
Output of value that you can see, touch, and easily show to others are called
Which of the following examples would cause the unemployment rate to be under reported?
Pamela wants a full time job to support her family, but because her unemployment benefits ran out she is working part time.
Stock
Part ownership in a company (shares).
Dividends
Payments made to shareholders or bond owners from the profits of a company.
Which of the following are characteristics of the free enterprise system? Check all that apply.
People are motivated to seek profit, People choose their professions and jobs. Businesses choose the products to make, Buyers and sellers voluntarily exchange goods in the market place, Private property is protected.
How are goods and services bought and sold on the barter system?
People trade goods and services they have for those they want.
Why is a sales tax considered to be a regressive tax?
Poorer taxpayers spend a larger proportion of their income on taxable goods and services than do wealthy people so the tax impacts their disposable income more.
Goods and Services
Produced for sale in the product market.
Product Market
Producers sell and consumers buy goods and services.
Clothing, electronics, and other items sold in retail stores
Productivity can be measured by the number of inputs to make a product. Inputs are
Which phase of the business cycle is marked by rising unemployment rates and a slow down of production?
Recession
With which statement would a Keynesian economist agree?
Recessions and periods of inflation are part of capitalism and government should let the economy self regulate.
Which of the following statements is correct about risk and return?
Riskier investments if successful may give a higher rate of return.
Which of these cities does not have a Federal Reserve Office?
San Diego
Which of the following items is an example of allocating resources by holding a contest?
Serena Williams came in first at Wimbledon and received the prize money.
a temporary condition
Shortages differ from scarcity in that shortages are
Jared is saving money at the Bundt Bank and receiving simple interest. He deposited $1000. At 3% interest how much money will he have in 7 years. Principal = $1000 Rate = 3% Term =7 years
$1210
If Mr. Jones wanted to invest 3,000,000 yen in the Japanese stock market, how many dollars would he need if the exchange rate was $1 for 150 yen?
$20000
What is the equilibrium price for milk as shown on this graph?
$3
Based on this graph, which price and quantity is correct in this market?
$8, 8
Match the trade barriers with their examples. 1. standards 2. quotas 3. subsidies 4. tariffs 5. sanctions
1. After the outbreak of "mad cow" disease countries had strict inspections rules for imported beef. 2. United States place a limit on the number of minivans that could be brought into the country. 3. France gave tax benefits to its aircraft manufactures. 4. China taxes software purchases from the United States. 5. The US has a ban on trade with and travel to Cuba.
Match the terms relating to "money and banking" with their definitions. 1. fiat money 2. commodity money 3. fractional reserve 4. medium of exchange
1. Currency that is not backed by silver or gold(specie) and is recognized as money because people have faith in the government that created it 2. items such as tea, furs, and tobacco that have been used as money in the past. 3. the percentage of deposits that banks have to keep on hand and cannot lend out 4. anything that is accepted and recognized as money
Match the term with its description. 1. credit reporting agency 2. installment loan 3. credit 4. credit report 5. mortgage
1. Equifax, Trans Union, or Experian 2. credit broken into equal monthly payments, usually for a large purchase like and auto or furniture 3. buy now and pay later with interest 4. document provided detailing a person's borrowing and repayment history 5. installment loan for a house, commercial building, or other real estate
Match the economic systems with their advantages. 1. Traditional 2. Market 3. Command 4. Mixed Market
1. Everyone knows their role and has a position in the economy. 2. Change happens gradually according to people's choices and decisions. 3. Changes can happen quickly because the government can decree them. 4. Change happens gradually and government regulations protect consumers and producers from extremes.
Match the tools of the Federal Reserve Board with their description. 1. Fed raises or lowers the portion of deposits banks must keep and not lend out. 2. Fed buys and sells government bonds for the purpose of controlling the money supply and interest rates. 3. Fed increases money supply by buying securities on the open market. 4. Fed lowers or raises the discount rate for its largest member banks.
1. Fractional Reserve Rate 2. Open Market Operations 3. Quantitative Easing 4. Discount Rate
Match the term with the correct example. 1. Inelastic demand 2. Elastic demand
1. Insulin 2. Jewelry
Match the terms with their definitions. 1. What is given up when one more unit is produced. Ex additional utility charges due to keeping the store open later. 2. Sum of the fixed and variable costs, the cost of production. Ex. the total monthly operating expenses for a store or factory. 3. A cost that changes when production increases or decreases. Ex shipping costs 4. A cost that does not vary based on production or sales. Ex. Rent 5. The money left over after all of the expenses are paid.
1. Marginal cost 2. Total cost 3. Variable cost 4. Fixed cost 5. Profit
Match the social goal with the appropriate example 1. Economic security 2. Full employment 3. Economic efficiency 4. Economic growth 5. Economic freedom
1. Medicaid pays for healthcare for children living in poverty. 2. The Jobs Act will encourage businesses to hire more workers. 3. The forestry industry is required to replant trees when cutting down trees for timber. 4. The government approved research grants for innovative technology. 5. Individuals have choices in career, business, and education.
Match the economic systems with the countries that have that type of system. 1. Market 2. Traditional 3. Command 4. Mixed Market
1. New Zealand 2. Inuit 3. North Korea 4. United States
Match the demand shifter with the correct example. 1. When you go to the store pick up a box of cereal and remember to get some milk and bananas too. 2. Have you noticed the many advertisements for goods that seniors want. There are so many commercials for canes, walkers, depends, and arthritis medication. There must be a lot of aging baby boomers out there. 3. The Weather Channel foretasted snow for Atlanta and North Georgia. I decided to stop at the store for supplies. The supermarket was totally out of bread, milk, and flash lights. 4. With the economy recovering and Wall St having a great year, the price of housing in Lower Manhattan has skyrocketed. 5. The model looks great in those skinny jeans. I think I will store the bell bottoms and get some new jeans. 6. We were going to have steak for our cook out but the price has gone sky high. We will have chicken again.
1. Number of Consumers 2. Consumer Tastes 3. Expectations 4. Complement 5. Consumer Income 6. Substitute
Match the term with its definition. 1. Loose money policy 2. Tight money policy
1. Policy used to stimulate economic growth by increasing the money supply 2. Policy used to slow down inflation by limiting the money supply
Match the Circular Flow Model terms with their definitions. 1. Producers sell and consumers buy goods and services 2. A person or group that produces goods and services 3. A person or group of individuals that occupy a housing unit 4. Produced for sale in the product market and voluntarily exchanged 5. Households provide land, labor, and capital to producers for a return on their labor or investment
1. Product Market 2. Business 3. Household 4. Goods and Services 5. Factor Market
Match the term with its definition. 1. Absolute Advantage 2. Opportunity Cost 3. Comparative Advantage 4. Specialization
1. Refers to a country's ability to produce a certain good more efficiently than another country 2. Refers to what you sacrifice in making an economic choice. In this instance, it refers to the value of the goods you sacrifice in deciding to produce one good instead of another. 3. Refers to a country's ability to produce a particular good with a lower opportunity cost than another country 4. Refers to a country's decision to produce a certain good or list of goods because of the advantages it possesses in their production
Match the terms in the left column with their description in the right hand column. 1. Household 2. Businesses
1. Sells Factors of Production 2. Buys Factors of Production
Match the term with the correct definition. 1. A second supply curve has been introduced into the market due to a change in the market place other than price. 2. the amount producers will offer for sale at any given price 3. a graph showing the quantities supplied at every price 4. a direct relationship; suppliers offer more for sale at higher prices 5. a table listing the quantities supplied at various prices
1. Supply change or shift 2. Quantity Supplied 3. Supply Curve 4. Law of Supply 5. Supply schedule
Match the example with the correct term. 1. The call center instituted an automated answering and redirect phone system and can now serve more customers. 2. New deposits of natural gas have been discovered in Pennsylvania. 3. The company decided to shift production from golf balls to tennis balls due to increasing popularity of tennis as a recreational sport. 4. The government is backing low interest loans for businesses developing solar energy. 5. Following Hurricane Katrina, Georgians experienced fuel shortages. 6. Lately it seems that frozen yogurt shops are popping up in every neighborhood shopping center.
1. Technology innovation 2. Resources 3. Other Goods 4. Taxes and subsidies 5. Natural disasters 6. Number of supplies
Match the term with its description. 1. Command Economy 2. Mixed Market Economy 3. Traditional Economy 4. Market Economy
1. The government controls the means of production, property, and makes all decisions about production and consumption. 2. Many economic decisions are made by individuals. But the government also plays a role in the allocation and distribution of resources. 3. Roles are handed down from generation to generation and the basic questions are answered as they have been since the distant past. 4. Producers and consumers make all economic decisions and the factors of production are privately owned
Match the terms with their descriptions. 1. Diminishing Marginal Utility 2. Total Utility 3. Income Effect 4. Substitution Effect 5. Marginal Utility
1. The more we get of an item, the less useful the next unit of that item is. 2. The total satisfaction from consuming some commodity 3. There is a change in quantity demanded as price changes. This means that as something gets cheaper, we have extra more money left over which means we might buy more of that item. 4. There is a change in quantity demanded because of the change in relative price. This means that as something become more expensive, you are more likely to buy a different good that satisfies the need or want. 5. The extra usefulness or satisfaction that a person gets from getting one more unit of an item.
Match the economic systems with their disadvantages. 1. Traditional 2. Command 3. Mixed Market 4. Market
1. This system discourages progress and modernization. 2. Workers frequently lack motivation and the quality of work suffers as they have no say in their economy. 3. Government programs offer some protection to workers in need. 4. Workers who are not as productive or skilled are at a disadvantage.
Match the credit related terms with their descriptions. 1. annual fee 2. credit limit 3. APR 4. grace period 5. late penalty
1. a fee charged each year for acquiring the credit card 2. the maximum amount of money that can be charged on a particular credit card 3. the cost of credit usually compounded daily 4. an interest free period between the date of purchase and the due date of the monthly bill 5. a fee for paying the credit card balance or minimum payment past the due date
Match the market structure with its description. 1. Oligopoly 2. Perfect Competition 3. Monopoly 4. Monopolistic Competition
1. a few very large companies dominate the market making similar but not identical products 2. a market that has many producers of identical products who compete on price 3. a market where there is only one producer of a good or service 4. many producers make similar but not identical products
Match the investment with its description. 1. mutual funds 2. stocks 3. certificates of deposits 4. bonds
1. a group of stocks and or bonds selected and managed by a professional manager sometimes preferred by professionals and workers too busy to manage their investments 2. shares or part ownership in a corporation or a company 3. a timed deposit that pays higher interest than a savings account but invokes penalties for early withdrawal 4. securities that lend money to government or corporations and pay interest
Before issuing a credit card or making a loan, a lender will establish the credit worthiness of a borrower according to the 3 C's. Match the C's with their descriptions. 1. Lenders may get employer verification or ask for income tax returns to determine if the borrower has sufficient income to pay the bill or loan. They will want to know how long the borrower has been at the present employment or in the business. 2. Lenders will examine credit reports and look at bill paying history to assess whether the person is reliable and dependable. They look for a high credit score. 3. Lenders want to know if borrowers have valuable assets such as real estate or investments that can be used to pay off the loan if the borrower loses his/her job or source of income. Correct match:
1. capacity 2. character 3. collateral
Match the type of unemployment with its example. 1. Jackie lost her job during the recession when the appliance store where she worked went out of business. 2. Tina lost her job as a stenographer when personal computers arrived on the scene. Her boss word processed his own memos. 3. Justin quit his job as a store manager following a disagreement with the regional manager. He planned to take a vacation and then apply to similar companies. 4. Brian works as a ski instructor in Vermont. He has to save money for the summer months.
1. cyclical 2. structural 3. frictional 4. seasonal
Match the letter indicated in the graph with the term that matches its place in the business cycle? 1. <strong>D</strong> 2. <strong>A</strong> 3. <strong>B</strong> 4. <strong>C</strong>
1. expansion 2. trough 3. peak 4. contraction
Match the type of stock with its description. 1. growth 2. common 3. income 4. preferred
1. have earnings growing at a faster rate than the market average. They rarely pay dividends and investors buy them in the hope of capital appreciation. A start-up technology company is likely to be a growth stock. 2. stock entitles owners to vote at shareholder meetings and receive dividends. 3. stockholders usually don't have voting rights but they receive dividend payments before common stockholders do, and have priority over common stockholders if the company goes bankrupt and its assets are liquidated. 4. pay dividends consistently. Investors buy them for the income they generate. An established utility company is likely to be an income stock.
Match the factors of production with their examples 1. trees 2. logger (person who cuts down trees) 3. truck 4. The owner of the company
1. land 2. labor 3. capital 4. entrepreneur
Match the business form with its definition. 1. Corporation 2. Sole Proprietorship 3. Partnership 4. Limited Partnership
1. owned by shareholders and governed by a board of directors 2. business owned and managed by one individual 3. business owned and managed by two or more individuals who share profits and responsibilities 4. one or more of the partners contributes capital and shares in the profits, but does not share in the day to day operations
Match the types of insurance with their descriptions. 1. Health Insurance 2. Automobile Insurance 3. Renters Insurance 4. Life Insurance 5. Disability Insurance 6. Homeowners Insurance
1. pays for medical care 2. pays for damages if the insured causes an accident or if the vehicle is damaged at no fault of the individual and no one else can be held liable 3. covers the belongings of an individual and liability in an apartment or house where he/she is a tenant 4. provides money to one's family at the time of death 5. provides income for a period of time if a person is unable to work due to illness or injury 6. insures a house or condominium in the case of accidental damage and destruction, may cover homeowner liabilities
Match the tax category with its description. 1. everyone pays the a set percent regardless of income 2. the amount of tax one pays increase with income 3. takes a bigger "bite" out of the income of low income families
1. proportional 2. progressive 3. regressive
Match the functions of money with the appropriate term. 1. Money holds purchasing power until the buyer needs it. 2. Money is accepted by all parties as payment for goods and services. 3. Money can be used to express worth in terms that people can understand.
1. store of value 2. median of exchange 3. unit of account
Match the term with its description. 1. income 2. salary 3. earnings 4. paycheck 5. wages
1. wages, salaries, profits, interests payments, rents and other forms of earnings received... in a given period of time 2. set payment for services, not an hourly rate, but usually stated in annual terms 3. income, wages, and profits 4. given to an employee weekly, bi weekly, or monthly. The stub shows deductions and withholding. It may be deposited electronically. 5. the amount or hourly rate workers get paid by employers
What is the fractional reserve rate shown in this diagram?
10%
During which year did the Federal Government have a surplus?
1985
Examine the graph. During which year would being a consumer in Argentina have been extremely difficult?
1990
According to this graph, at $8 consumers will be willing to purchase _________.
2 pies
According to this graph the largest growth in the GDP occurred in ___________.
2012
What is the equilibrium quantity in this table?
3
According to this demand schedule at $6 consumers will be willing to buy __________.
3 pies
According to this supply table at $4 per pie, bakers are willing to supply ___________.
3 pies.
The opportunity cost of moving from point C to D is
3.5 motorcycles
According to the information in this graph, the economy first began to recover from the recession during the
3rd quarter of 2009.
A downturn in the business cycle is considered a recession after it has lasted
6 months
At point B ______ motorcycles and ______ tennis balls can be produced?
6, 6000
What is the optimum number of workers for this business to hire?
9
Which letter is indicating the lowest point that our economy reached during the great depression?
A
Store of Value
A characteristic of money tat allows it to be saved for use later.
Oligopoly
A few very large companies dominate the market making similar but not identical products.
Money
A medium of exchange used to buy goods and services.
Which of the following scenarios could this graph illustrate?
A new airline began to service Atlanta providing more international flights.
Household
A person or group of individuals that occupy a housing unit like an apartment, condominium, or single-family house.
profits
A producer's main goal is to maximize
Stage 2
According to this table, at what stage in the production process do diminishing returns first occur?
Which of the following statements is true according to the information in this graph?
After specializing, Charlie and Patty can produce more cups and plates.
In answering the basic questions, entrepreneurs may choose labor intensive or capital intensive methods for production. Which of the following is a capital intensive endeavor.
An automobile assembly plant using robotics.
A negative incentive
An employees pay is docked due to repeated tardiness to work. The employer is using
Medium of Exchange
Anything that is accepted and recognized as money.
6,600
At point B___ motorcycles and ______ tennis balls can be produced?
Which policy should the Federal Reserve Board implement during a recession?
B
Which of the following is the correct formula for balance of payments?
Balance of Payments = Capital Account + Current Account
Jamie should make paper airplanes and John should make cookies
Based on the concept of comparative advantage
Capitalism
Which economic system experiences the most influence from the profit motive?
Which of the following scenarios is an example of the crowding out or competition impact of government spending?
Business at private tennis and golf clubs go down when the government builds a state of the art facility in the area.
Sole Proprietorship
Business owned and managed by one individual.
The circular flow tracks the exchange of factors of production, goods and services, and money. Whose spending and production decisions can impact what happens in the flow and the overall economy? Select all that apply.
Businesses, Households, Government, Consumers, Workers
what to specialize in
Calculating comparative advantage helps individuals, businesses, and companies decide
Which economic system experiences the most influence from the profit motive?
Capitalism
Market Traditional Mixed Market Command
Change happens gradually according to people's choices and decisions. Everyone knows their role and has a position in the economy. Change happens gradually and government regulation protect consumers and producers from extremes. Changes can happen quickly because the government can decree them.
The student returned the book she checked out to the school library before completing her project to avoid a paying a fine. What was her opportunity cost?
Completing a project
Which of the following is NOT a function of the Federal Reserve Board?
Conduct monetary policy
Which of the following actions falls into the category of fiscal policy.
Congress ends the tax breaks for those in the top 1% of earnings.
The demand for baby strollers has increased due to a rising birth rate among the "baby boomer bubble". Which graph best illustrates this situation.
D is pointing outwards to D1
Which of the following examples shows how money is a unit of value?
Diane knew she wanted a new limited addition Toyota Rav 4 and she comparison shopped at the four Toyota dealers in her city.
Which of the following is NOT an accurate statement about economic systems?
Dictatorships and totalitarian regimes do not have economic systems.
Which of the following taxes is based on the benefits received principle?
Drivers pay a toll on Highway 400 until the road is paid for.
Which of the following statements best describes the impact of government expansionary policies?
Due to the fact that economic indicators need to decline for a period of time for a recession to be recognized, there is usually a lag time before government reacts to the indicators.
Which of the following characteristics are considered necessary for something to serve as money? You can select more than one choice.
Durability, Limited in supply, Portability, Divisibility
goods and services that people would like to obtain
Economic wants can best be defined as
How businesses, individuals, and governments allocate scarce resources
Economics is best defined as the study of
According to this graph what happened to the equilibrium price when the demand curve shifted?
Equilibrium price increased.
Barter
Exchange of goods and service without using money. People trade goods and services they have for those they want.
Which institution has the job of regulating the money supply in the US?
Federal Reserve Board
Non-profit
Functions like a business but is not for profit (ex. Red Cross).
_______________are an example of commodity money.
Furs
What does point F represent?
Future production might reach this point if additional resources such as more workers or more technology were brought in.
The three primary indicators or measures of economic performance are
GDP, unemployment rate, and inflation rate.
Which of the following nations is a member of the European Union?
Germany
a positive incentive
Getting a reduced rate on your auto insurance because you are a ticket and accident free driver is
Which of the following factors would decrease aggregate supply? Select all items that apply.
Higher prices for inputs such as the price of oil, Higher business taxes
Select all options that apply. Which of the following statements about the labor force are correct?
Highly skilled and educated workers benefit a nation and increase economic growth, Salary levels are influence by the market forces of supply and demand, With economic growth comes increased demand for skilled and educated workers, Increasing our human capital can lead to higher earnings.
Jackson opened a furniture store as a sole proprietor. During the recession, business declined and he was not able to pay his suppliers and creditors. Due to unlimited liability
His creditors may ONLY seize the assets of his store such as furniture and equipment.
Factor Market
Households provide land, labor, and capital to producers for a return on their labor or investment.
Which step in the Paced Decision Making Process belongs in D on this graphic?
Identify the alternative you selected as your decision.
privatize industries and sell them to individuals or corporations
If a country was moving from a command to mixed market economy, it would most likely
Be high
If a product such as oil is scarce or in short supply, consumers would expect the price to
more tennis balls and motorcycles could be produced
If the factory is producing at point E
Which of the following items determine whether a good a service has elastic demand? Select as many as apply.
If the good is a necessity or luxury, Percentage of household budget taken by the good, If the purchase of the good or service can be delayed without harm, Availability of substitutes for a good or service
by the central government
In a command economy, natural resources are controlled and owned
An automobile assembly plant using robotics
In answering the basic questions, entrepreneurs may choose labor intensive or capital intensive methods for production. Which of the following is a capital intensive endeavor?
The item that is given up when making a choice; the next best alternative.
In economic terms, opportunity cost is defined as
Kelly should mow the lawn and Karen should rake leaves
In orders to be most efficient and enjoy comparative advantage
Japan
In which country would you expect to find people enjoying a high standard of living?
Profit motive
Incentive to make a profit, the reason to start business.
Which of the following government actions could be used to slow down growth which is too rapid and leading to inflation?
Install a new federal sales tax of 5% on all goods and services except for food and prescription drugs
_____________ is a fee for letting you use money.
Interest
What happened to macroeconomic equilibrium when AD shifted from the black line to the blue line while AS remained unchanged?
It increased.
What is a frequent criticism of a sales tax?
It is a regressive tax.
How is the equilibrium price determined?
It is based on trial and error in the market place.
How is the "total receipts test" used in economics?
It is used to determine elasticity of demand.
Which of the following scenarios would cause the unemployment rate to be overstated (reported as higher than it is)?
Ivan is working as a house painter and not reporting his income to the IRS.
Which of the following is an example of barter?
Jack agrees to mow Jill's lawn in exchange for two tickets to the Brave's game next weekend.
Based on the concept of comparative advantage
Jamie should make paper airplanes and John should make cookies.
In which country would you expect to find people enjoying a high standard of living?
Japan
Which of the following scenarios best demonstrates diminishing marginal utility in economic terms?
Julie already had 4 pairs of athletic shoes, but she bought a 5th pair on sale in different style.
mowing the lawn
Kelly has an absolute advantage over Karen in
In order to be most efficient and enjoy comparative advantage
Kelly should mow the lawn and Karen should rake leaves.
The people carrying the sign in the photo probably belong to a
Labor Union
natural resources
Land, water, forests, and minerals are examples of
Corporation
Legal entity for doing business owned by shareholders and governed by a board of directors.
Select all choices that apply. What are the goals of fiscal and all macroeconomic policies?
Low unemployment rate, stable prices, high and sustained economic growth
M2
M1 plus savings accounts, money market funds, and timed deposits.
Monopolistic Competition
Many producers make similar but not identical products.
additional cost of producing just one more unit of a good or service
Marginal cost refers to
Which of the following individuals might find some benefit during a period of high inflation?
Michael, who is paying back loans he took out before the inflation hit
Profit
Money a business has left over after paying all of its expenses.
Which agency regulates stocks and bonds and works to protect investors from fraud?
The Securities and Exchange Commission
This chart shows how many hours the production of the items takes (input). Which statement is correct?
The United States has the absolute advantage in jeans and CD's.
Which is NOT a reason that many merchants target American teenage consumers with advertising?
The average American teenager controls less than $500 annually in disposable income.
The town council meets and decides to build the new town hall.
The community of Belle Springs acquires a property near its center. Some of the citizens want a new town hall. Others lobby for green space and parks. Which of the following is an example of a trade off?
Which of the following items is likely to be included in the GDP calculations?
The final cost of a new Jeep
Which of the following occurrences would lead to an increase in aggregate demand? Select all items that apply.
The government increases spending and reduces taxes, United States imports increase while exports decrease, Consumer confidence increases.
Which of the following examples is NOT likely to be counted in the GDP?
The money Robin saved doing the work of remodeling his kitchen himself.
3.5 motorcycles
The opportunity cost of moving from point C to point D is
Consumer goods
The people in this picture are purchasing
We have to distinguish between a change in quantity demanded and a change or shift in demand. Select all of the options that indicate a shift or change in demand.
The price of a complementary good goes up., The standard of living and income levels rise in the country.
If these lines represented demand for SUV's what happened between D, the original line, and D1 the new curve?
The quantity of SUV's demanded increased because the price was lowered.
Velocity of Money
The rate at which money is exchanged in the circular flow, how frequently it changes hands in a period of time.
Outputs
The scenario is calculated on
traditional
The scene in the picture is most likely taking place in a ___________ economy.
market
The scene in this photograph is most likely taking place in a ______economy
Completing the project
The student returned the book she checked out to the school library before completing her project to avoid a paying a fine. What was her opportunity cost?
the wealthy
The system of allocating scarce resources by charging high prices favors
The community of Belle Springs acquires a property near is center. Some of the citizens want a new town hall. Others lobby for green space and parks. Which of the following is an example of a trade off?
The town council meets and decides to build the new town hall.
Business Forms
The way firms are organized, ex. Sole proprietorship.
In the condition of market equilibrium,
There is no shortage or surplus of goods and services.
allocate
To deal with scarcity, society must _____________ scarce resources.
Why are the members of the Fed Board of Governors appointed for staggered 14 year terms?
To insulate them from day to day political party pressures.
Pay for employees to earn credit toward advanced degrees
To invest in human capital, an entrepreneur might
Which of the following groups would most likely favor protectionist tariffs?
US labor unions
Scarcity
What condition do these these lines from a Rolling Stones popular song refer to? Can't get what you want
Studying for a test
What opportunity cost might the person in the circle have experiences in order to be in this place?
Which of the following statements are favorable to free trade?
When countries specialize the world has more goods and standard of living goes up.
capital goods
When entrepreneur takes some of his profits and replaces old machinery, he is investing in
Comparative advantage
When someone can do something at a lower opportunity cost than someone else we say that person has a
Which of the following is NOT one of the three basic economic questions?
Where will the goods and services be produced?
Specialization
Which economic concept does the scene in the photo best represent?
market
Which economic system encourages entrepreneurship?
Change in Demand or shift
a second demand curve has been introduced into the market because consumers are willing to buy more or less at every price due to a change in the market place other than price
Change in Supply or Shift
a second supply curve has been introduced into the market because producers are willing to supply more or less at every price due to a change in the market place other than price
Assuming that the blue line is the original supply curve, then the green line illustrates
a shift or decrease in quantity supplied.
Point C on the graph indicates ___________than point A on the graph.
a similar value
Price floors usually legislate prices that are
above equilibrium price.
trade offs
action of giving up one item or category for another; example, "guns vs butter"
Regulation
adding rules or laws established by the government such as taxes, tariffs, subsidies, Federal Reserve guidelines, environmental protections, safety guidelines, and consumer protection.
Marginal cost refers to
additional cost of producing just one more unit of a good or service.
Marginal Product
additional output due to an extra variable of input
To deal with scarcity, society must __________ scarce resources.
allocate
Supply
amount of a product that would be offered for sale at all possible prices that could prevail in the market, a direct relationship
Quantity Demand
amount of goods desired and able to be purchased by consumers and business.
Quantity Supplied
amount producers bring into the market at any given price
Market
an arrangement between producers and consumers to conduct voluntary exchange of goods and services
product (producer, production)
an economic good that can be used to satisfy needs and wants
A bear market refers to
an extended period of time during which investors are reluctant and stock prices are falling.
The graph shows ______________from Q1 to Q2.
an increase in demand
Assuming that the blue line is the original supply curve, then the red line indicates
an increase in quantity supplied.
Externality
an unplanned cost or benefit of economic activity and production, positive externality is a benefit, negative externality is a cost. for example, a new car manufacturing plant brings increased revenue for area restaurants and increased traffic leading to the need to spend for new highways.
An externality is
an unplanned cost or benefit of economic activity.
Shortages differ from scarcity in that shortages are
are a temporary condition.
The personal information on a credit report will NOT show
arrest record
According to the graph in January, 2009, the unemployment rate was
at 8%
Diminishing Returns
at a point the gain from each addition input declines
If a product such as oil is scarce or in short supply, consumers would expect the price to
be high
When the government goes into deficit spending to stimulate the economy, it has to borrow more money. This borrowing may have a negative impact by
causing interest rates to rise due to increased demand.
Elasticity
change in price causes large change in demand
Because there is only one line on this graph and it slopes downward to the left it illustrates
changes in quantity supplied.
Cynthia will be living off campus at her college next year. She will have a part time job and her parents plan to give her an allowance each month. What type of account should Cynthia establish for paying her rent and other monthly bills?
checking account
Which of the following items belong in the category of M1? You can select more than one.
checking accounts, travelers checks, cash
decision making
choosing between two or more economic options
Because France specializes in the production of wine, and United Kingdom specializes in the production of beef, trade between the two countries is beneficial. This law of economics was first identified by David Ricardo as
comparative advantage
When someone can do something at a lower opportunity cost than someone else we say that person has a(n)
comparative advantage
Jacqueline is planning to begin her retirement savings plan next month. What kind of interest will give her the greatest yield over time?
compound interest
scarcity
condition that exists because human wants and needs are greater than available resources
Which of the following are the LEAST appropriate items for which to use long term credit?
consumable goods such pizzas, restaurant meals, travel
Output of value that you can see, touch and easily show to others are called
consumer goods
The index used to measure prices changes in a typical market basket is the
consumer price index
voluntary exchange
consumers and producers decide which goods and services to exchange and set the prices
A business owned jointly by its members for the benefit of its members is called a
cooperative
The Fulton County Teachers Credit Union is an example of a
cooperative
Which business form is subject to the most government regulation?
corporation
Variable Cost
cost that changes when the production of a business changes; ex. labor cost
Which of the following items is NOT considered to be money in any form?
credit card
Since 1982, the US has generally experienced
creeping inflation.
If the federal government wants to encourage business and individuals to spend more money it should
decrease taxes.
What does inflation do to the buying power of the dollar?
decreases it
Contractionary fiscal policy will have the effect of
decreasing aggregate demand (AD).
f the price of hamburger goes down during the summer cook out season, then _________________________.
demand for buns is likely to increase.
Rising income levels leading to increasing spending by consumers may cause
demand pull inflation
Production Function
describes the relationship between changes in output to different amounts of a single input while other inputs are held constant
One way to distribute scarce resources such as a space at a desired school would be to hold a lottery. A lottery is
drawing by which resources go to the luckiest individual
Profit Motive
drives production decisions in a free enterprise system
Which social goal does the data on this graph concern most?
economic equity
Traditional Economy
economic system where roles are handed down from generation to generation and the basic questions are answered as they have been since the distant past.
labor
efforts and abilities of humans used to produce goods and services, mental and physical
The owner of the company trees logger (person who cuts down trees) truck
entrepreneur land labor capital
Because military goods are relatively more expensive than civilian goods, trade offs towards civilian goods involve __________opportunity costs.
increasing
Mr. Cohen has decided to start a new company to produce widgets. He hired a contractor to build his factory and is interviewing perspective employees. Mr. Cohen primarily represents which factor of production?
entrepreneurship
Let's say Fantastic Sport introduces a new line, Rapid Running Shoes. It sends them to retailers at a very low price. What would you expect to happen?
equilibrium
During which phase of the business cycle would you expect businesses and individuals to increase their investments?
expansion
With which phase of the business cycle would you expect to see some rise in the rate of inflation?
expansion
The US government contracts with Airy Airplanes to buy 100 new cargo planes for transporting troops and supplies. This action most relates to
expenditure
Inputs
factors of production used to make specific goods and services
INputs
factors of production, resources that go into making products
Equity
fairness in the access to goods and services.
Currently, money being used in the United States is ________________.
fiat money
Select all the responses which apply. Companies, governments and municipalities issue bonds to get money for various things, which may include:
financing debt., Funding capital investments in schools, highways, hospitals, and other projects, providing operating cash flow.
During the 1970's, the United States experienced
galloping inflation
Which of the following items is NOT scarce?
garbage
Increasing worker productivity involves
getting more output with fewer inputs.
Economic wants can be best defined as
goods and services that people would like to obtain
wants
goods and services that people would like to obtain
This formula is used to calculate GDP? C+I+G+X = GDP The G stands for
government
Minimum wage laws, food labeling requirements, and work place safety legislation are examples of
government regulation
Supply Curve
graph showing the various quantities supplied at each and every price that might prevail in the market
The financial and mortgage crises of 2008 in the United States led to
greater regulation of banking and and investment firms in the US.
The market value of all final goods and services produced within a country's national borders during a one year period is called the
gross domestic product.
Granting consumers credit
has allowed business and the GDP to grow.
One advantage of a corporation is that it
has limited liability
Americans who are for free trade would
have supported the United states signing the NAFTA agreement.
When a country places tariffs on foreign goods, it hopes to
help domestic producers compete better.
Farmers in Mexico protest that cheaper corn from the US is driving them out of business. They are most likely to ask for
higher tariffs on corn imported from the US.
An important clue to the type of market structure a business falls in is
how competitive it is.
Output
how much of a good and service that was produced with inputs.
Which of the following are financial decisions faced by wage earners and consumers? Select all that apply.
how to select financial institutions, how to select insurance, how to use credit, how to manage money
Kelly has an absolute advantage over Karen in
in mowing the lawn
In the circular flow model where do households earn their income?
in the factor market
A steady rise in prices of various goods and services is called
inflation
Which of the following is not one of the major economic goals for countries?
inflation
Stagflation is a condition that is difficult to combat because the country experiences _________________________ at the same time.
inflation and recession
The circular flow model demonstrates the ___________of our economy.
interdependence
What is the Federal Reserve Boards' primary source of income?
interest from government bonds
Human Capital
investment in the work force and people such as health insurance, training, tuition for higher education, family leave, on site day care and other items that enhance worker quality of life and productivity.
When making your college plans, you and your parents may complete a form called FAFSA. This form
is required for students seeking any federal financial aid or loans.
Examine the credit card bill. This account
is under the credit limit.
What happens to the velocity of money, the rate at which it changes hands, during a recession?
it decreases
resources
items available to produce goods and services to satisfy human wants and needs
Public Goods and Services
items such as schools, defense, police and fire protection, parks, roads, and street lighting provided by the government.
needs
items that people must have to live; food, water, shelter, basic clothing
Technology
knowledge and use of advanced tools and processes
A word that means the same as human capital is
labor
factors of production (productive resources)
land, labor, capital, and entrepreneurship
Examine the credit card bill. Under fees charged, the $69.45 might be for
late payment.
Companies issue stock to get money for various things, which may include:
launching new products, enlarging facilities or building new ones, paying off debt, expanding into new markets or regions.
Diminishing Marginal Utility
law of economics stating that as a person increases consumption of a product, while keeping consumption of other products constant, there is a decline in the benefit that person receives from consuming each additional unit of that product
When the Fed raises the fractional reserve rate
less funds become available for lending by banks.
Which type of policy is not likely to have a deductible?
life insurance
Supply Schedule
listing of the various quantities of a particular product supplied at all possible price sin the market (table or chart)
Demand schedule
listing of the various quantities of a particular products demanded at all possible prices in the market (a table or chart)
In this graph the arrow is pointing to
macroeconomic equilibrium
Economically speaking, increased trade has
made countries more interdependent.
The example of the T Shirt in the global economy shows that
manufacturing of final products including harvesting or mining raw materials takes place within the borders of one country.
What are the three costs associated with health care insurance?
premium, deductible, co pay
The scene in this photograph is most likely taking place in a _________ economy.
market
Which economic system encourages entrepreneurship?
market
In this graph the arrow is pointing to
market equilibrium
If a market structure has perfect competition, prices are determined by
market forces.
Student loans
may allow a student to afford an education and increase life long earning power.
Supply Elasticity
measure in which quantity supplied repsonds to a change in price
If a social networking company called "Linkedbook" buys "My Face" they have
merged
financial capital
money from savings and investments that finance businesses
Because athletic shoes compete with product differentiation, _______________market structure applies to this industry.
monopolistic competition
Producers have the most price and quality setting power in a(n)_______________.
monopoly
Under which market structure do businesses have a chance for the largest profit to price ratio?
monopoly
If you track all of your daily spending you will most likely
more easily stay within your budget.
If the factory is producing at point E
more tennis balls and motorcycles could be produced.
Mixed Market Economy
most systems are mixed and have some degree of government regulation and ownership. economies are on a continuum.
In economics terms, incentives are defined as
motivations that influence people's choices and decisions.
Land, water forests, and minerals are examples of
natural resources
The economy of Macroland experienced a 4% growth in GDP, a 2% decline in unemployment rate, and a 2% inflation rate. This economy is probably
needs government intervention to slow down its expansion.
A new automobile factory locates in the town of Riverbend. The factory leads to overcrowded schools, overburdened highways, crowded stores. These are
negative externalities.
Based on the data in the graph, which occupation do you predict is most likely to be experiencing a shortage of qualified applicants?
nursing
The airline industry is considered to be a(n)____________.
oligopoly
absolute advantage
one person or country can produce more than another in a specific time period; measured in terms of inputs and outputs
comparative advantage
one person or country has a lower opportunity cost in the production of one good or service over another good or service
The scenario is calculated on
outputs
This scenario is calculated on
outputs
Janet bought shares of Linkedbook on its initial public offering. She
owns stock in the company making her part owner.
Diane was having a difficult time deciding on which of the colleges that accepted her to attend. She made a chart and listed the colleges vertically. Horizontally she listed her criteria; cost, proximity to home, having her major, and being near a city. She was about to use the
paced decision making model.
To invest in human capital, an entrepreneur might
pay for employees to earn credits toward advanced degrees
This credit report shows that the individual
pays his auto loan on time.
If you wanted to compare and contrast the standard of living between countries which indicator would give you the best idea?
per capita GDP
The value of goods and services produced per household in a given period of time is known as
per capita gross domestic product.
Because the items in the photo are nearly identical to each other we say that the market structure is
perfect competition.
entrepreneur
person or individual who organizes the resources for production and distribution, entrepreneurs take risks
The main source of revenue for the federal government is
personal income tax.
An important consideration for a country's production is to protect its resources. Which of the following is NOT a renewable source of energy?
petroleum
When the United States wanted to pressure South Africa to end its apartheid practices it
placed an embargo on trade with South Africa.
incentives
positive and negative rewards that encourage economic behavior such as making purchases or working to increase productivity
Items such as schools, defense, parks, street lighting, and roads are
public goods and services.
Standard of Living
quality of life of residents and workers in a society, measured by per capita GDP and other lifestyle factors such as length of work day, safety, access to health care, and literacy.
When the Federal Reserve Board uses open market operations, it has decided to
raise or lower income taxes.
The point where is AD and AS intersect on the graph (macroeconomic equilibrium) is equal to
real GDP
Marginal Revenue
receipts gained from adding one additional unity
Which of the following is an example of a price ceiling?
rent controlled apartments in Manhattan
Unlimited wants + limited resources =
scarcity
What condition do these lines from a Rolling Stones popular song refer to "You can't always get what you want You can't always get what you want You can't always get what you want But if you try sometimes well you might find You get what you need"
scarcity
One advantage a partnership has over a sole proprietorship is that it
shares responsibility and the work load.
Gloria is about 5 years away from beginning her retirement. She should
she should begin moving her investments into dividend paying stocks and interest paying bonds.
Which of the following would be sold in a product market?
shoes
Price ceilings can lead to __________in the market place.
shortage
What market condition exists in the market place at the price goods are offered as indicated on this graph?
shortage
Substitutes
similar products that people will buy if the price of a product goes up; ex. beef vs. chicken
The demand curve
slopes down to the right
Which of the following items is in the land or resource category for making paper clips?
steel wire made from iron ore
Which function of money is involved when Sam puts his loose change in his piggy bank?
store of value
Which of the following types of college financial aid have to be repaid by the student?
student loans
What opportunity cost might the person in the circle have experienced in order to be in this place?
studying for a test
Total Cost
sum of the fixed and variable costs
Law of Supply
suppliers will normally offer more for sale at high prices and less at lower prices
Flexible or floating exchange rates are determined by
supply and demand
The market or equilibrium price is the point where
supply offered by producers equals demand from consumers.
What condition happens in the market place at the price shown in this graph?
surplus
Deregulation
taking away rules or laws on an industry such as deregulation of transportation.
Macroeconomics is the sub field of economics that deals with
the actions of the economy as a whole including actions of government and its impact on the economy.
Productivity
the amount of goods and services produced in a given period of time.
For businesses to be profitable and for nations to prosper, they must have high productivity. Productivity is
the amount of goods or services produced with inputs
Total Revenue
the amount of money that a company receives from its production and sales in a given period of time (receipts)
Productivity
the amount of output per unit of input measured during a specific period of time; ex. with 4 more workers output was increased by 10 cars a day
When selecting a bank to use for savings accounts, certificates of deposit, and checking accounts, one should check to see if
the bank is insured by FDIC.
Microeconomics
the branch of economics that studies how individuals, household, and firms make decisions to distribute limited resources, in markets where goods or services are being bought and sold.
In a command economy, natural resources are controlled and owned by
the central government
Income Effect
the change in demand for a product caused by the impact of a change in its price affecting the spending power of the consumer
Debbie Smith is the CEO of Smith Trading Company. This company sells most of its goods overseas. Ms. Smith is happy when
the dollar depreciates.
land
the earth and all of the resources coming from the land
Command Economy
the government controls the means of production, property, and makes all decisions about production and consumption.
A few years ago tax payers received a tax rebate check from the Internal Revenue Services? These funds were distributed because
the government hoped to stimulate economic growth.
The law of demand is based on an inverse relationship which means that
the higher the price of the good or service, the less the consumer will be willing to buy.
Law of Demand
the higher the price of the product, the less the consumer will demand, an inverse relationship
Consumer sovereignty
the idea that individuals are the best judge of their needs and what is in their best interests and that they indicate their choices by their spending decisions.
Consumer sovereignty refers to the
the idea that the market responds and provides the goods and services consumers are willing to purchase.
In Economics terms, scarcity can be best defined as
the inability to satisfy unlimited human wants with limited available resources.
Marginal Utility
the increase in utility obtained by consuming or using one more unit of a good or service
Economic System
the institutions, producers, consumers, and other groups that make up the economic structure of a society, country, or other grouping.
opportunity costs
the item or value that is lost when someone makes an economic decision; the next best alternative; the item that is not chosen
In economics terms, opportunity cost is defined as
the item that is given up when making a choice; the next best alternative.
Profit
the making of gain in business activity for the benefit of the owners of the business, money left over after all expenses are paid
Productivity can be measured by inputs and outputs. Output refers to
the number of widgets produced in an hour.
The policy holder is
the person who owns the policy.
When Maria paid for a homeowners insurance policy and the insurance company accepted her payment
the risk of paying for accidental damages transferred from Maria to the insurance company.
marginal utility
the satisfaction and usefulness of adding one unit in production or one more item in consumption
Expenditures
the value of money that has been used up or sent to produce something
allocation
the way society deals with scarcity; prices, government regulation, rationing
The system of allocating scarce resources by charging high prices favors
the wealthy
Goods are public rather than private if
they are non-excludable and non-rivalrous.
consumer
those who obtain and use goods and services produced by others
This graphic shows the
three main tools of fiscal policy that can be implemented by Congress.
What is a main goal of the World Trade Organization? (WTO)
to encourage trade
Why would the United States impose standards on goods imported from China and other countries?
to protect US consumers from harmful products that might enter the country.
The purpose of government regulatory agencies like the Pure Food and Drug Administration (FDA) and the Securities and Exchange Commission (SEC) is
to protect business against competition from foreign producers with lower standards.
During the Carter administration, the Chairman of the Federal Reserve Board, instituted a tight money policy in order to
to slow down the rate of inflation.
capital
tools, equipment, and facilities involved in creating goods and services and getting them to the consumers
Total Product
total output produced by a firm
Aggregate supply is defined as the
total production of final goods and services at a range of price levels during a period of time.
According to this graph, the United States has been running a
trade deficit.
If a country exports more than it imports it has a
trade surplus
The scene in the picture is most likely taking place in a ______________ economy.
traditional
Which of the following items would be sold in a factor market?
trees
Raw Materials
unprocessed natural products used in production
marginal benefits and costs
what consumers and producers evaluate in making economic decisions; benefits should be greater than costs
Marginal Cost
what is given up when one more unit of product is produced
Calculating comparative advantage helps individuals, businesses, and companies decide
what to specialize in
service
work performed to satisfy needs and wants, example, haircut
Adam Smith, the "father of economics"
wrote "The Wealth of Nations" whose main idea was laissez-fair or government hands off the economy.