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ECONOMICS EXAM REVIEW
Choices are made because resources
a.
b.
c.
d.
may run out
have alternate uses
are limited
can only be used once
Choices are made because resources
a.
b.
c.
d.
may run out
have alternate uses
are limited
can only be used once
Because of scarcity
a. people are forced to make
choices
b. opportunity costs exist
c. People face trade-offs
d. All of the above
Because of scarcity
a. people are forced to make
choices
b. opportunity costs exist
c. People face trade-offs
d. All of the above
All the combinations of goods and
services that can be produced in a given
period of time with a fixed amount of
resources are called
a. opportunity costs
b. production possibilities
c. factors of production
d. trade-offs
All the combinations of goods and
services that can be produced in a given
period of time with a fixed amount of
resources are called
a. opportunity costs
b. production possibilities
c. factors of production
d. trade-offs
Which of the following will cause the
production possibilities curve to shift
outward?
a. a reduction in the size of the labor
force
b. an increase in the quantity of labor
c. an inefficiency that is corrected
d. a decrease in the amount of capital
Which of the following will cause the
production possibilities curve to shift
outward?
a. a reduction in the size of the labor
force
b. an increase in the quantity of labor
c. an inefficiency that is corrected
d. a decrease in the amount of capital
When a nation increases its number of
capital goods, it is usually true that
a. it must do without some
consumer goods in the present
b. labor must decline
c. fewer consumer goods will be
available in the future
d. no opportunity costs exist
for doing so
When a nation increases its number of
capital goods, it is usually true that
a. it must do without some consumer
goods in the present
b. labor must decline
c. fewer consumer goods will be
available in the future
d. no opportunity costs exist for doing
so
The opportunity cost of growing corn is
a. no wheat
b. no dairy products
c. no soybeans
d. whatever is valued as the next
most important to growing corn
The opportunity cost of growing corn is
a. no wheat
b. no dairy products
c. no soybeans
d. whatever is valued as the next
most important to growing corn
Because specialized resources are more
suited to specific tasks, the extra cost of
producing additional units will rise. This is
due to
a. production possibilities
b. scarcity
c. law of increasing relative costs
d. opportunity costs
Because specialized resources are more
suited to specific tasks, the extra cost of
producing additional units will rise. This is
due to
a. production possibilities
b. scarcity
c. law of increasing relative costs
d. opportunity costs
TRUE OR FALSE
The major purpose of
economics is to understand
choices.
TRUE OR FALSE
The major purpose of
economics is to understand
choices.
TRUE
TRUE OR FALSE
Because resources are scarce,
the goods they produce are
also scarce.
TRUE OR FALSE
Because resources are scarce,
the goods they produce are
also scarce.
TRUE
Which of the groups below best
represent the factors of production?
a. teachers, lawyers, factory
workers
b. trucks, factory workers, water
c. factory workers, trucks,
hammers
d. iron ore, water, trees
Which of the groups below best
represent the factors of production?
a. teachers, lawyers, factory
workers
b. trucks, factory workers, water
c. factory workers, trucks,
hammers
d. iron ore, water, trees
TRUE OR FALSE
For most choices, there is no
opportunity cost.
TRUE OR FALSE
For most choices, there is no
opportunity cost.
FALSE
Modern technology is resulting in
a. better quality goods
b. inefficient use of resouces
c. less leisure time
d. higher prices
Modern technology is resulting in
a. better quality goods
b. inefficient use of resouces
c. less leisure time
d. higher prices
Specialization results in
a. increased number of goods
b. greater efficiency
c. economic interdependence
d. all of the above
Specialization results in
a. increased number of goods
b. greater efficiency
c. economic interdependence
d. all of the above
If price rises
a. buyers will buy less
b. buyers will buy more
c. buyers will buy the same
amount
d. none of the above
If price rises
a. buyers will buy less
b. buyers will buy more
c. buyers will buy the same
amount
d. none of the above
A pure market economy would not
have
a. government control
b. competition
c. private property
d. freedom of choice
A pure market economy would not
have
a. government control
b. competition
c. private property
d. freedom of choice
The American economy can best be
described as
a. socialism
b. capitalism
c. communism
d. a command economy
The American economy can best be
described as
a. socialism
b. capitalism
c. communism
d. a command economy
Analogy: The price system is to a
market economy as ______is to a
command economy.
a. income redistribution
b. customs and traditions
c. government planning
d. human capital
Analogy: The price system is to a
market economy as ______is to a
command economy.
a. income redistribution
b. customs and traditions
c. government planning
d. human capital
In a capitalist economic system, the
factors of production are usually
controlled by
a. the government
b. large monopolies
c. individuals
d. corporations
In a capitalist economic system, the
factors of production are usually
controlled by
a. the government
b. large monopolies
c. individuals
d. corporations
TRUE OR FALSE
In a command economic system,
the individual has a say in the
way the three basic economic
questions are answered.
TRUE OR FALSE
In a command economic system,
the individual has a say in the
way the three basic economic
questions are answered.
FALSE
TRUE OR FALSE
A mixed economic system contains
elements of the three other
economic systems.
TRUE OR FALSE
A mixed economic system contains
elements of the three other
economic systems.
TRUE
TRUE OR FALSE
Entrepreneurship is encouraged
by freedom of choice and
competition.
TRUE OR FALSE
Entrepreneurship is encouraged
by freedom of choice and
competition.
TRUE
TRUE OR FALSE
A traditional economy is based
on how things have been done
before.
TRUE OR FALSE
A traditional economy is based
on how things have been done
before.
TRUE
TRUE OR FALSE
Most countries have mixed
economic systems.
TRUE OR FALSE
Most countries have mixed
economic systems.
TRUE
One criticism of Capitalism is that
a. it prevents economic growth
b. its income distribution is
unequal
c. its living standards are lower
than in socialist economies
d. its individuals own very little
One criticism of Capitalism is that
a. it prevents economic growth
b. its income distribution is
unequal
c. its living standards are lower
than in socialist economies
d. its individuals own very little
The way goods and services are
produced in a market economy is
a. determined by government
standards
b. with the least-cost combination of
resources
c. inefficient
d. no different than in a command
economy
The way goods and services are
produced in a market economy is
a. determined by government
standards
b. with the least-cost combination of
resources
c. inefficient
d. no different than in a command
economy
A demand schedule
a. relates price to quantity demanded
b. is a demand curve when it is graphed
c. cannot change
d. shows a direct relationship between
price and quantity demanded
A demand schedule
a. relates price to quantity demanded
b. is a demand curve when it is graphed
c. cannot change
d. shows a direct relationship between
price and quantity demanded
If the price of good A rises and the
demand for good B rises, then A and B
are
a. substitutes
b. complements
c. not related goods
d. not scarce goods
If the price of good A rises and the
demand for good B rises, then A and B
are
a. substitutes
b. complements
c. not related goods
d. not scarce goods
Recently some cities in Alabama passed a law
that limited showers to 4 minutes, with a
possible 30-day jail sentence for violators.
Which of the following is probably true?
a. a surplus of water existed
b. the price of water was too high
c. a shortage of water existed no
matter how high the price
d. the price of water was below the
equilibrium price
Recently some cities in Alabama passed a law
that limited showers to 4 minutes, with a
possible 30-day jail sentence for violators.
Which of the following is probably true?
a. a surplus of water existed
b. the price of water was too high
c. a shortage of water existed no
matter how high the price
d. the price of water was below the
equilibrium price
If the supply of gasoline rises and
demand does not change, then
a. the relative price of gasoline will
rise
b. the equilibrium price of gasoline will
increase
c. the equilibrium quantity of gasoline
will increase
d. the equilibrium price and equilibrium
quantity of gasoline will increase
If the supply of gasoline rises and
demand does not change, then
a. the relative price of gasoline will
rise
b. the equilibrium price of gasoline will
increase
c. the equilibrium quantity of gasoline
will increase
d. the equilibrium price and equilibrium
quantity of gasoline will increase
Which of the following will lead to an
increase in supply?
a. an increase in the price of a good
b. a technological improvement in the
production of the good
c. an increase in the price of labor
d. all of the above
Which of the following will lead to an
increase in supply?
a. an increase in the price of a good
b. a technological improvement in the
production of the good
c. an increase in the price of labor
d. all of the above
Prolonged shortages may come about if
a. demand increases relative to supply
b. price floors are set by government
c. prices are not allowed to rise to
equilibrium
d. buyers are allowed to compete for
goods
Prolonged shortages may come about if
a. demand increases relative to supply
b. price floors are set by government
c. prices are not allowed to rise to
equilibrium
d. buyers are allowed to compete for
goods
Which of the following goods probably
has the most elastic demand?
a. salt
b. food
c. alcoholic beverages
d. private school education
Which of the following goods probably
has the most elastic demand?
a. salt
b. food
c. alcoholic beverages
d. private school education
Which of the following is not true
concerning a proprietorship?
a. most U.S. firms are
proprietorships
b. they are easy to form and
dissolve
c. they offer limited liability
d. profits are only taxed once
Which of the following is not true
concerning a proprietorship?
a. most U.S. firms are
proprietorships
b. they are easy to form and
dissolve
c. they offer limited liability
d. profits are only taxed once
A corporation
a. is a legal entity that conducts
business in its own name
b. permits unlimited liability to
shareholders
c. must be dissolved if a majority
stockholder dies
d. has severely limited abilities to
attract financial resources
A corporation
a. is a legal entity that conducts
business in its own name
b. permits unlimited liability to
shareholders
c. must be dissolved if a majority
stockholder dies
d. has severely limited abilities to
attract financial resources
Shareholders
a. are the owners of corporations
b. are less at risk than are
bondholders
c. are subject to unlimited risk
d. have less control over firm decisions
than do bondholders
Shareholders
a. are the owners of corporations
b. are less at risk than are
bondholders
c. are subject to unlimited risk
d. have less control over firm decisions
than do bondholders
Which of the following is not a
characteristic of the monopoly market
structure?
a. one seller
b. unique product
c. restricted entry
d. price taker
Which of the following is not a
characteristic of the monopoly market
structure?
a. one seller
b. unique product
c. restricted entry
d. price taker
Which firm has the least control over
price?
a. perfect competitor
b. monopolistic competitor
c. oligopolist
d. monopolist
Which firm has the least control over
price?
a. perfect competitor
b. monopolistic competitor
c. oligopolist
d. monopolist
Nonprice competition or advertising
a. attempts to increase demand for
one’s product
b. helps to differentiate one’s product
c. can lead to more information to
buyers
d. all of the above
Nonprice competition or advertising
a. attempts to increase demand for
one’s product
b. helps to differentiate one’s product
c. can lead to more information to
buyers
d. all of the above
Corporations obtain most of the funds
they need for expansion from
a. the sale of stock
b. the sale of bonds
c. short-term borrowing
d. undistributed profits
Corporations obtain most of the funds
they need for expansion from
a. the sale of stock
b. the sale of bonds
c. short-term borrowing
d. undistributed profits
Which of the following is least likely to
result in increased productivity?
a. efficient use of natural resources
b. employee training programs
c. improved machinery
d. working overtime
Which of the following is least likely to
result in increased productivity?
a. efficient use of natural resources
b. employee training programs
c. improved machinery
d. working overtime
The most significant impact of
technology on production has been
a. lower wages
b. higher consumer prices
c. poor-quality goods
d. increased productivity
The most significant impact of
technology on production has been
a. lower wages
b. higher consumer prices
c. poor-quality goods
d. increased productivity
In the last twenty years in the United
States, there has been a sizable
increase in the number of
a. laborers
b. service workers
c. farm workers
d. manufacturing workers
In the last twenty years in the United
States, there has been a sizable
increase in the number of
a. laborers
b. service workers
c. farm workers
d. manufacturing workers
The most important reason some people
are paid more than others is
a. dirty or dull and repetitive work
b. talent and skill level differences
c. geographic location of the job
d. discrimination against minorities
The most important reason some people
are paid more than others is
a. dirty or dull and repetitive work
b. talent and skill level differences
c. geographic location of the job
d. discrimination against minorities
Training, experience, and education are
all considered
a. investment in human capital
b. capital
c. economic inequalities
d. economic equalities
Training, experience, and education are
all considered
a. investment in human capital
b. capital
c. economic inequalities
d. economic equalities
Most of the nation’s output of goods
and services is purchased by
a. consumers
b. business firms
c. government
d. foreign countries
Most of the nation’s output of goods
and services is purchased by
a. consumers
b. business firms
c. government
d. foreign countries
Income left over after taxes have been
paid is called
a. discretionary family income
b. disposable family income
c. real family income
d. money family income
Income left over after taxes have been
paid is called
a. discretionary family income
b. disposable family income
c. real family income
d. money family income
The only three ways a person can
dispose of income is through
a. taxes, necessities, and luxuries
b. necessities, luxuries, and savings
c. taxes, consumption, expenditures,
and recreation
d. consumption expenditures, taxes and
savings
The only three ways a person can
dispose of income is through
a. taxes, necessities, and luxuries
b. necessities, luxuries, and savings
c. taxes, consumption, expenditures,
and recreation
d. consumption expenditures, taxes and
savings
The profit made on a sale of stock is
known as
a. interest
b. brokerage fee
c. equity
d. capital gain
The profit made on a sale of stock is
known as
a. interest
b. brokerage fee
c. equity
d. capital gain
A transaction that has an effect on a
third party is called a (n)
a. merit good
b. public good
c. externality
d. private good
A transaction that has an effect on a
third party is called a (n)
a. merit good
b. public good
c. externality
d. private good
The amount of return possible on an
investment increases directly with the
a. amount of risk
b. amount of insurance
c. financial advice
d. mutual fund
The amount of return possible on an
investment increases directly with the
a. amount of risk
b. amount of insurance
c. financial advice
d. mutual fund
A taxation system in which tax rates
fall as income increases is
a. regressive
b. proportional
c. progressive
d. all of the above
A taxation system in which tax rates
fall as income increases is
a. regressive
b. proportional
c. progressive
d. all of the above
TRUE OR FALSE
In a market system, the
consumer “votes” for the
goods and services he wants
to see produced.
TRUE OR FALSE
In a market system, the
consumer “votes” for the
goods and services he wants
to see produced.
TRUE
TRUE OR FALSE
If the quality of labor
decreases, the production
possibilities curve will shift
outward.
TRUE OR FALSE
If the quality of labor
decreases, the production
possibilities curve will shift
outward.
FALSE
TRUE OR FALSE
It is impossible for a nation to
operate at a point inside its
production possibilities curve.
TRUE OR FALSE
It is impossible for a nation to
operate at a point inside its
production possibilities curve.
FALSE
TRUE OR FALSE
Economic growth shifts the
production possibilities curve
outward from the origin.
TRUE OR FALSE
Economic growth shifts the
production possibilities curve
outward from the origin.
TRUE
TRUE OR FALSE
The market system does not
adequately provide for the
needs of all people.
TRUE OR FALSE
The market system does not
adequately provide for the
needs of all people.
TRUE
TRUE OR FALSE
Capitalism is another name for
the free enterprise system.
TRUE OR FALSE
Capitalism is another name for
the free enterprise system.
TRUE
TRUE OR FALSE
Competition has a negative
effect on the U.S. consumer
in the long run.
TRUE OR FALSE
Competition has a negative
effect on the U.S. consumer
in the long run.
false
A proportional tax system
a. is unfair
b. cannot be consistent with the ability to
pay system
c. means that upper income people pay a
smaller percentage of their income in taxes
d. requires upper income people to pay more
tax dollars than lower income people
A proportional tax system
a. is unfair
b. cannot be consistent with the ability to
pay system
c. means that upper income people pay a
smaller percentage of their income in taxes
d. requires upper income people to pay more
tax dollars than lower income people
All of the following are considered
benefits of economic growth except
a. higher employment levels
b. higher living standards
c. inflation
d. income security
All of the following are considered
benefits of economic growth except
a. higher employment levels
b. higher living standards
c. inflation
d. income security
The idea that GDP should increase only
enough to accommodate population
growth is called
a. sustainable growth
b. unlimited economic growth
c. zero economic growth
d. productive capacity
The idea that GDP should increase only
enough to accommodate population
growth is called
a. sustainable growth
b. unlimited economic growth
c. zero economic growth
d. productive capacity
Which of the following would not be a
characteristic of a period of economic
growth?
a. declining investment
b. declining unemployment
c. expanding credit
d. rising productivity
Which of the following would not be a
characteristic of a period of economic
growth?
a. declining investment
b. declining unemployment
c. expanding credit
d. rising productivity
Which of the following is a function of
money?
a. medium of exchange
b. unit of accounting
c. store of value
d. all of the above
Which of the following is a function of
money?
a. medium of exchange
b. unit of accounting
c. store of value
d. all of the above
Which is not considered money?
a. checking account balances
b. Federal Reserve notes
c. credit cards
d. coins
Which is not considered money?
a. checking account balances
b. Federal Reserve notes
c. credit cards
d. coins
Which of the following is an advantage
of money over barter?
a. permits more specialization of
labor
b. does not require a double
coincidence of wants
c. makes exchange faster
d. all of the above
Which of the following is an advantage
of money over barter?
a. permits more specialization of
labor
b. does not require a double
coincidence of wants
c. makes exchange faster
d. all of the above
Which of the following is probably the
least liquid?
a. savings account balances
b. shares of stock in a major
corporation
c. washing machines
d. automobiles
Which of the following is probably the
least liquid?
a. savings account balances
b. shares of stock in a major
corporation
c. washing machines
d. automobiles
Which of the following is not a part of
M1?
a. savings account balances
b. traveler’s checks
c. currency
d. unused credit card balances
Which of the following is not a part of
M1?
a. savings account balances
b. traveler’s checks
c. currency
d. unused credit card balances
Which of the following is the most
important function of the FED?
a. regulate the money supply
b. supervise member banks
c. supply the economy with
currency
d. hold member bank’s deposits
Which of the following is the most
important function of the FED?
a. regulate the money supply
b. supervise member banks
c. supply the economy with
currency
d. hold member bank’s deposits
Under a fiat monetary standard, money
is backed by
a. gold
b. public faith that money can be
exchanged for goods and services
c. precious metals that can be
exchanged for goods and services
d. the Treasury’s assets
Under a fiat monetary standard, money
is backed by
a. gold
b. public faith that money can be
exchanged for goods and services
c. precious metals that can be
exchanged for goods and services
d. the Treasury’s assets
Legal reserves include
a.
b.
c.
d.
Vault cash and deposits at the FED
US government securities
Gold
All of the above
Legal reserves include
a.
b.
c.
d.
Vault cash and deposits at the FED
US government securities
Gold
All of the above
The goal of sound monetary policy is to
a. shrink the money supply
b. Balance tight and loose policy
c. Control banks
d. Increase the money supply
The goal of sound monetary policy is to
a. shrink the money supply
b. Balance tight and loose policy
c. Control banks
d. Increase the money supply
If the FED wanted to reduce the
money supply, it would
a. cut discount rates
b. buy government securities
c. increase the reserve
requirement
d. eliminate the reserve
requirement
If the FED wanted to reduce the
money supply, it would
a. cut discount rates
b. buy government securities
c. increase the reserve
requirement
d. eliminate the reserve
requirement
When the government sells securities
on the open market, money is
a. put into the economy
b. increased in value
c. taken out of the economy
d. the same supply
When the government sells securities
on the open market, money is
a. put into the economy
b. increased in value
c. taken out of the economy
d. the same supply
To regulate the supply of money, the
FED may use all of the following tools
EXCEPT
a. discount rate
b. reserve requirements
c. open-market operations
d. prime rates
To regulate the supply of money, the
FED may use all of the following tools
EXCEPT
a. discount rate
b. reserve requirements
c. open-market operations
d. prime rates
During a period of inflation, the
average consumer
a. looses purchasing power
b. gains credit easily
c. raises his standard of living
d. borrows more
During a period of inflation, the
average consumer
a. looses purchasing power
b. gains credit easily
c. raises his standard of living
d. borrows more
Which of the following best represents
a nation’s standard of living?
a. nominal GDP
b. real GDP
c. per capita real GDP
d. per capita nominal GDP
Which of the following best represents
a nation’s standard of living?
a. nominal GDP
b. real GDP
c. per capita real GDP
d. per capita nominal GDP
Which of the following is not a cause of
cost-push inflation?
a. An increase in demand at full
employment
b. An increase in the price of a raw
material
c. Wage increases due to union activity
d. Price increases to increase profits
Which of the following is not a cause of
cost-push inflation?
a. An increase in demand at full
employment
b. An increase in the price of a raw
material
c. Wage increases due to union activity
d. Price increases to increase profits
The use of taxation and spending
policies to regulate the economy is
called
a. Fiscal policy
b. Normative manipulation
c. spillover
d. monetary policy
The use of taxation and spending
policies to regulate the economy is
called
a. Fiscal policy
b. Normative manipulation
c. spillover
d. monetary policy
The control of the money supply and
credit to regulate the economy is called
a. Fiscal policy
b. Normative manipulation
c. spillover
d. monetary policy
The control of the money supply and
credit to regulate the economy is called
a. Fiscal policy
b. Normative manipulation
c. spillover
d. monetary policy
The only sector of the economy that
can act in the best interest of the
economy is
a. Consumers
b. Government
c. business
d. foreign countries
The only sector of the economy that
can act in the best interest of the
economy is
a. Consumers
b. Government
c. business
d. foreign countries
If the U.S. imports more than it
exports it would lead to a
a.
b.
c.
d.
Trade balance
Trade deficit
Positive balance of trade
Fixed foreign exchange market
If the U.S. imports more than it
exports it would lead to a
a.
b.
c.
d.
Trade balance
Trade deficit
Positive balance of trade
Fixed foreign exchange market
TRUE OR FALSE
Entrepreneurship is encouraged by
freedom of choice and competition.
TRUE OR FALSE
Entrepreneurship is encouraged by
freedom of choice and competition.
TRUE
TRUE OR FALSE
All persons in the United States have
the right to own personal property,
land, factories, farms and businesses.
TRUE OR FALSE
All persons in the United States have
the right to own personal property,
land, factories, farms and businesses.
TRUE
TRUE OR FALSE
The government is not allowed to buy
private property for public purposes.
TRUE OR FALSE
The government is not allowed to buy
private property for public purposes.
FALSE
TRUE OR FALSE
In a market system, the consumer
“votes” for the goods and services he
wants to see produced.
TRUE OR FALSE
In a market system, the consumer
“votes” for the goods and services he
wants to see produced.
TRUE
TRUE OR FALSE
A change in the quantity demanded of
cigarettes is the result of a change in
the price of cigarettes.
TRUE OR FALSE
A change in the quantity demanded of
cigarettes is the result of a change in
the price of cigarettes.
TRUE
TRUE OR FALSE
An increase in price will cause a
leftward shift in demand a rightward
shift in supply.
TRUE OR FALSE
An increase in price will cause a
leftward shift in demand a rightward
shift in supply.
TRUE
TRUE OR FALSE
Buyers tend to change to lower-priced
from higher-priced goods, according
to the substitution effect.
TRUE OR FALSE
Buyers tend to change to lower-priced
from higher-priced goods, according
to the substitution effect.
TRUE
TRUE OR FALSE
If the price of tennis racquets rises,
then the demand for tennis balls will
tend to rise also.
TRUE OR FALSE
If the price of tennis racquets rises,
then the demand for tennis balls will
tend to rise also.
FALSE
TRUE OR FALSE
If the price of cassettes rises, the
demand for CD’s will rise.
TRUE OR FALSE
If the price of cassettes rises, the
demand for CD’s will rise.
TRUE
TRUE OR FALSE
If the price is below the equilibrium
price, a shortage will develop.
TRUE OR FALSE
If the price is below the equilibrium
price, a shortage will develop.
TRUE
TRUE OR FALSE
If supply shifts to the left and
demand does not change, then the
equilibrium price and the equilibrium
quantity will rise.
TRUE OR FALSE
If supply shifts to the left and
demand does not change, then the
equilibrium price and the equilibrium
quantity will rise.
FALSE
TRUE OR FALSE
If demand shifts to the left and supply
does not change, then the equilibrium
price and the equilibrium quantity will
fall.
TRUE OR FALSE
If demand shifts to the left and supply
does not change, then the equilibrium
price and the equilibrium quantity will
fall.
TRUE
TRUE OR FALSE
Minimum wage laws are a form of price
ceiling.
TRUE OR FALSE
Minimum wage laws are a form of price
ceiling.
FALSE
TRUE OR FALSE
Increasing productivity makes goods
more expensive.
TRUE OR FALSE
Increasing productivity makes goods
more expensive.
false
TRUE OR FALSE
Productivity refers to the efficiency
with which we produce goods and
services.
TRUE OR FALSE
Productivity refers to the efficiency
with which we produce goods and
services.
true
TRUE OR FALSE
A firm in a perfectly competitive
industry is a price-taker.
TRUE OR FALSE
A firm in a perfectly competitive
industry is a price-taker.
true
TRUE OR FALSE
A geographic monopoly exists when the
market is not large enough to support
more than one seller.
TRUE OR FALSE
A geographic monopoly exists when the
market is not large enough to support
more than one seller.
true
TRUE OR FALSE
The presence of many buyers and
sellers in the market is a
characteristic of an oligopoly.
TRUE OR FALSE
The presence of many buyers and
sellers in the market is a
characteristic of an oligopoly.
false
TRUE OR FALSE
The increase in farm productivity is the
result of advances in science and
technology.
TRUE OR FALSE
The increase in farm productivity is the
result of advances in science and
technology.
true
TRUE OR FALSE
The breakfast food industry is a good
example of an oligopoly.
TRUE OR FALSE
The breakfast food industry is a good
example of an oligopoly.
true
TRUE OR FALSE
Corporations are the most common
business organization in the U.S.
TRUE OR FALSE
Corporations are the most common
business organization in the U.S.
false
TRUE OR FALSE
Proprietorships account for the largest
amount of business revenues.
TRUE OR FALSE
Proprietorships account for the largest
amount of business revenues.
false
TRUE OR FALSE
Corporate shareholders are taxed
twice on the corporations earnings.
TRUE OR FALSE
Corporate shareholders are taxed
twice on the corporations earnings.
true
TRUE OR FALSE
Proprietorships and partnerships face
limited liability for the debts of their
firms.
TRUE OR FALSE
Proprietorships and partnerships face
limited liability for the debts of their
firms.
false
TRUE OR FALSE
Trade credit is the most common type
of short-term financing for
businesses.
TRUE OR FALSE
Trade credit is the most common type
of short-term financing for
businesses.
true
TRUE OR FALSE
People who own corporate bonds have
loaned the company money.
TRUE OR FALSE
People who own corporate bonds have
loaned the company money.
true
TRUE OR FALSE
High interest rates encourage
borrowing by companies.
TRUE OR FALSE
High interest rates encourage
borrowing by companies.
false
TRUE OR FALSE
Retained earnings are undistributed
profits.
TRUE OR FALSE
Retained earnings are undistributed
profits.
true
TRUE OR FALSE
Officers selected by the board of
directors run the corporation.
TRUE OR FALSE
Officers selected by the board of
directors run the corporation.
true
TRUE OR FALSE
Members of one in five American
families own shares of stock.
TRUE OR FALSE
Members of one in five American
families own shares of stock.
true
TRUE OR FALSE
Assets – Liabilities = Net Worth
TRUE OR FALSE
Assets – Liabilities = Net Worth
true
TRUE OR FALSE
In recent years the number of blue
collar jobs has remained at the same
level.
TRUE OR FALSE
In recent years the number of blue
collar jobs has remained at the same
level.
false
TRUE OR FALSE
At present, the size of the labor force
in the U.S. is about half the total
population.
TRUE OR FALSE
At present, the size of the labor force
in the U.S. is about half the total
population.
true
TRUE OR FALSE
In recent decades, the rate of
population growth in the U.S. has
been slowing down.
TRUE OR FALSE
In recent decades, the rate of
population growth in the U.S. has
been slowing down.
true
TRUE OR FALSE
The average age of the U.S. population
is getting younger.
TRUE OR FALSE
The average age of the U.S. population
is getting younger.
false
TRUE OR FALSE
Jobs in the U.S. have been shifting
from the goods-producing to the
service industries.
TRUE OR FALSE
Jobs in the U.S. have been shifting
from the goods-producing to the
service industries.
true
TRUE OR FALSE
The demand for workers in an industry
tends to rise as the demand for the
goods it produces increases.
TRUE OR FALSE
The demand for workers in an industry
tends to rise as the demand for the
goods it produces increases.
true
TRUE OR FALSE
Supply and demand are the major
factors in determining wage rates.
TRUE OR FALSE
Supply and demand are the major
factors in determining wage rates.
true
TRUE OR FALSE
The more training required for a job,
the larger the supply of workers
available.
TRUE OR FALSE
The more training required for a job,
the larger the supply of workers
available.
false
TRUE OR FALSE
Public goods and services cannot be
easily divided and sold in small units.
TRUE OR FALSE
Public goods and services cannot be
easily divided and sold in small units.
true
TRUE OR FALSE
One of the functions of taxes is to
discourage certain behaviors.
TRUE OR FALSE
One of the functions of taxes is to
discourage certain behaviors.
true
TRUE OR FALSE
The sales tax is an example of a
proportional tax.
TRUE OR FALSE
The sales tax is an example of a
proportional tax.
false
TRUE OR FALSE
The largest source of income for the
federal government is the federal
personal income tax.
TRUE OR FALSE
The largest source of income for the
federal government is the federal
personal income tax.
true
TRUE OR FALSE
Government can encourage economic
growth by promoting saving and
investing.
TRUE OR FALSE
Government can encourage economic
growth by promoting saving and
investing.
true
TRUE OR FALSE
If population increases faster than
GDP, the standard of living increases.
TRUE OR FALSE
If population increases faster than
GDP, the standard of living increases.
false
TRUE OR FALSE
Debtors profit from inflation.
TRUE OR FALSE
Debtors profit from inflation.
true
TRUE OR FALSE
Checking accounts and checking-type
accounts are considered forms of
money.
TRUE OR FALSE
Checking accounts and checking-type
accounts are considered forms of
money.
true
TRUE OR FALSE
The value of M1 is always greater than
the value of M2.
TRUE OR FALSE
The value of M1 is always greater than
the value of M2.
false
TRUE OR FALSE
M2 is the most liquid definition of
money.
TRUE OR FALSE
M2 is the most liquid definition of
money.
false
TRUE OR FALSE
A bank’s legal reserves are equal to its
total assets.
TRUE OR FALSE
A bank’s legal reserves are equal to its
total assets.
false
TRUE OR FALSE
The nation’s money supply may increase
when banks make loans.
TRUE OR FALSE
The nation’s money supply may increase
when banks make loans.
true
TRUE OR FALSE
If an individual bank has excess
reserves, it can make loans.
TRUE OR FALSE
If an individual bank has excess
reserves, it can make loans.
true
TRUE OR FALSE
If reserve requirements rise, the
amount of money in circulation
increases.
TRUE OR FALSE
If reserve requirements rise, the
amount of money in circulation
increases.
false
TRUE OR FALSE
When prices fall, the value of money
rises.
TRUE OR FALSE
When prices fall, the value of money
rises.
true
Final Review------What is the fundamental problem of
economics?
scarcity
Final Review------What are the four factors of
production?
Land, labor, capital and
entrepreneurship
Final Review------Which of the following is an example
of a good?
a. A car
b. A car wash
c. A tune-up
d. An oil change
Final Review------Which of the following will cause the
PPC to shift outward?
a. Reduction in size of labor force
b. Increase in the quantity of labor
c. Inefficiency that is corrected
d. Decrease in the amount of capital
Final Review------Who is considered the “father of
modern economics”?
Adam Smith
Final Review------Which of the following best
represents payment for a service?
a. $1.95 for a hamburger
b. $18.95 for a textbook
c. $15,000 for a new car
d. $10.00 for a haircut
Final Review------What does having a “pure” market
economy mean?
No government involvement
Final Review------In what type of economy does the
government make all the basic
economic decisions?
command
Final Review------Private property rights
Economic freedom
Profit motive
Government control
All of these are characteristics of
what type of economy?
Capitalism
Final Review------What is the most common form of
business organization in the U.S.?
Sole proprietorship
Final Review------The owners of a corporation are called
what?
shareholders
Final Review------Buying only one soda instead of two at
lunchtime describes the economic
concept of what?
Diminishing marginal utility
Final Review------How does the demand curve respond
to an increase in demand?
The demand curve shifts to the left
Final Review------The demand curve will always
slope___________________.
downward
Final Review------What will cause a change in quantity
demanded of a product?
A change in price
Final Review------If prices are not allowed to reach
equilibrium, what will occur?
Prolonged shortages
Final Review------If there is a shortage in the market,
what will likely happen to price?
Price will rise
Final Review------What are the four market structures
discussed in class?
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
Final Review------Which market structure would have
the least control over price?
Perfectly competitive market
Final Review------The refusal of workers to go to work
is called what?
Strike
Final Review------Training, experience, and education
are all considered…….
Investment in human capital
Final Review------The traditional theory of wage
determination says that wages are
determined by……………
Supply and demand
Final Review------The profit made on the sale of stock is
known as…………….
Capital gain
Final Review------A taxation system where rates rise as
income rises is called ……..
A progressive tax system
THE END