Download Economics - Spring Branch ISD

Economics
Semester Review
Directions; answer the following questions on a separate sheet of paper.
1. A tangible product that is useful, relatively scarce, transferable to others, and
satisfies a want or need is known as what?
2. List the factors of production.
3. A model economy where individuals make all the decisions is called what?
4. Human, natural, and capital resources (building blocks) that can be used to
produce products are called what?
5. What are natural resources?
6. What are human resources?
7. _________________ is an economic system in which a central authority
(government) answers the three basic economic questions.
8. _______________________ is an economic system in which the allocation of
scarce resources is the result of ritual, habit, or custom.
9. Define the term opportunity cost.
10. List the characteristic of capitalism.
11. Define the Law of diminishing marginal utility.
12. What does elasticity of price mean?
13. When estimating the Elasticity of Demand there is 3 Key Questions that must be
answered. List them.
14. A ___________ is a table that lists the quantity of a good that a person will
purchase at each price in the market.
15. A ___ is a good that consumers demand more of when their income increases.
16. If two goods are bought and used together, then those goods are ___.
17. What is a substitute good?
18. ____ is a cost that does not change, no matter how much of a good is produced.
19. ____ is a cost that rises or falls depending on the quantity produced.
20. ___ is a government payment or discounted loan that supports a business or
market.
21. The common U.S. federal subsidized industry is the ___.
22. The number of computer engineers and computer support specialists are expected
to grow by over __ between 1998 and 2008.
23. The theory that education increases productivity and results in higher wages is
called the ______.
24. Between 1960 and 1995, the rate of women in the work force has jumped to over
__.
25. List the reasons that explain why companies today are relying more on temporary
workers?
26. Today workers benefits (pensions and health insurance) make up about ___ of
total compensation in the United States economy.
27. Lifeguards, word processors, and short-order cooks are all classified as _____.
28. Mr. Walton is classified as a ___ worker.
29. The ____ required that male and female employees in the same workplace
performing the same job receive the same pay.
30. The ____ of 1947 allowed states to pass right-to-work laws, which prohibited
mandatory union membership.
31. Which region of the U.S. has the lowest level of unionism?
32. List the major conditions that characterize purely competitive markets?
33. A market structure in which a few large sellers dominate and have the ability to
effect prices in the industry is known as a ____.
34. List the advantage of a sole proprietorship.
35. List the advantage of a corporation.
36. ___ join two or more firms involved in different stages of producing the same
good or service.
37. A semi-independent business that pays fees to a parent company. In return, the
business is granted the exclusive right to sell a certain product or service in a
given area is called:
38. What are the uses (characteristics) of money?
39. List the characteristic that economists use to judge how well an item serves as
currency.
40. ____ consists of objects that have value in and of themselves and that are also
used as money.
41. Money that has value because the government has decreed that it is an acceptable
means to pay debts is called __.
42. Who was the first American to propose a national bank that could issue a single
currency for the entire nation?
43. How many regional Federal Reserve banks are there throughout the United States?
44. ____ are cooperative lending associations for particular groups, usually
employees of a specific firm or government agency.
45. When was the Federal Reserve System created?
46. ___ pool the savings of many individuals and invest this money in a variety of
stocks, bonds, and other financial assets.
47. Lets suppose that you have bond with a coupon rate of 5%, a maturity of 10 years
and a par value of $1,000. How much will you receive over a 10 year period for
your $1,000 investment?
48. _____ are bonds issued by state and local government to finance highways,
libraries, parks, and public schools.
49. Stock that pays no dividends, but instead reinvests its earnings in its business is
called ___.
50. What is the name of the OTC market in the U.S.?
Directions; on a separate sheet of paper, answer true or false for the following
statements.
51. Haircuts, teaching, and entertainment are examples of services.
52. At the core of economics is the issue of solving the problem of scarcity.
53. Shortage always exists because our needs and wants are always greater than our
resource supply.
54. Mr. Walton has $12,000 to spend on a new automobile. If he had not spent the
money on a truck, he could have put a down payment on a home, bought his
family new cloths, or taken his family on a really nice trip to Europe. This is why
all of these choices are his opportunity cost for buying a car.
55. The U.S. Stock Exchange is not considered, by economists, as a true market.
56. The early Virginia colony, in the 1600s, used tobacco as a medium of exchange.
57. An artist can be said to be utilizing labor as a factor of production.
58. A student can be said to be utilizing his physical capital as a resource.
59. To have demand for a good, you must be willing and able to buy it at the
specified price.
60. Demand for life-saving medicine is usually elastic.
61. Milk is viewed as a necessity to most consumers, thus the demand for milk is
inelastic.
62. As the price of goods decreases, existing firms will produce more in order to earn
the same amount of revenue.
63. If a good is highly inelastic, this means that a small increase in price will cause a
large increase in quantity supplied, even in the short-run.
64. Specialization increases output per worker.
65. Advances in technology can lower production cost in many industries.
66. During periods of inflation, the value of cash in a person’s pocket increases from
day to day as prices rise.
67. The percentage of the U.S. population in the labor force has decreased steadily
from 67.1 percent in 1950 to 59.2 percent in 1999.
68. The Industrial Revolution, which was the coming of the machine age, had
negative effects on the economy, by destroying jobs that were traditionally held
by skilled laborers.
69. The increase in information management jobs is part of an overall shift in the U.S.
from a manufacturing economy to a service economy.
70. As more and more Americans seek jobs in the service sectors of the economy,
there will be an increasing demand for unskilled and semi-skilled American
workers, to meet our needs.
71. Today someone entering the work force can look forward to having a single
secure job where he/she will stay until they retire at age 65.
72. Minimum wage laws force employers to pay more than the equilibrium wage for
unskilled labor.
73. A union gains the right to represent workers at a company when a majority of
workers in a particular work unit vote to accept the union. After that, the
company is required by law to bargain with the union in good faith to negotiate an
employment contract.
74. Due to their unique nature, sole proprietorships often have no trouble finding and
keeping good employees.
75. A corporation is defined as an “entity” because it has a legal identity separate
from those of its owners. Legally, it is regarded much like an individual.
76. The U.S. government usually does not allow conglomerates to be created because
this type of merger decreases competition.
77. Bartering is used widely in traditional economies, but since the U.S. economy is
so complex bartering is no used at all.
78. What makes money a good store of value is that inflation has little effect upon it
in the U.S. economy.
79. The U.S. Constitution places the power to create a national bank with the
legislative branch of government.
80. President Andrew Jackson was one of the most ardent supporters of the Bank of
the United States.
81. In the late 1970s and 1980s, Congress passed laws to deregulate several industries,
one of which was the banking industry.
82. Simple interest is interest paid on a loan principal and accumulated interest.
83. When the supply of money increases faster than the demand for goods and
services then prices rise and inflation occurs.
84. The Fed supervises banks in our economy by examining each banks business
practices and give the bank a rating. But they cannot force a bank to comply with
banking laws.
85. Investing is an essential part of the free enterprise system. It promotes economic
growth and contributes to a nation’s wealth.
86. Intermediaries provide information to potential investors in an investment report
called a prospectus.
87. Typically bonds pay the investor a fixed amount of interest at regular intervals for
a fixed amount of time; however, bonds tend to be high-risk investments.
88. The highest bond rating is “D”, while the lowest bond rating is “AAA”.
89. Like corporate bonds, the federal government sends monthly interest payments on
its bonds.
90. Money market mutual funds are popular investment because they pay higher
interest rates than a savings account and they are covered by FDIC insurance.
91. A company may seek to split a stock when the price of stock becomes so low that
it discourages potential investors from buying it.
92. The option to buy shares of stock at a specific time in the future is known as a put
option.
93. A bull market is when the stock market falls for a period of time; but a bear
market is when the stock market rises for a period of time.
94. One of the problems with GDP is that is does not include the leisure time and
personal safety of the public.
95. GDP does measure goods and services that people make or do for themselves.
96. Any shift in aggregate supply or aggregate demand will cause GDP to change.
97. In the last two decades the distribution of income has become more equal.
98. The Personal Responsibility and Work Opportunity Reconciliation Act was
signed into law by President George H. Bush.
99. Investment spending creates additional output and jobs.
100.
When investment rates are high companies borrow money to make new
investments.
Directions; completely answer the following question in essay format.
I would like you to express in an essay the economic knowledge that you have learned
this semester. For instance, start by explaining what economics is and why we study it.
Then explain what the main fundamental problem of economics is, and how that problem
motivates people to trade with one another. Finally, why do economists say the there is
no such than as a “free lunch”, and how does this fact shape your opportunity cost every
day (give one personal example.)