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Senior Social Science
Economics Final Worksheet
Thornton
Use the terms below each set of sentences to answer the following questions:
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2.
3.
4.
One of the main problems any economic system must face is how to allocate, or use, its limited
_______________.
All goods and services are produced from some combination of the _____________________________.
This is the concept that refers to the alternative uses of resources. ___________________.
____________________ is a factor of production which relies on the abilities of employees.
a.
b.
5.
6.
7.
8.
factors of production
labor
c. capital
d. resources
e. scarcity
This concept is the controlling force in a capitalistic economy. ________________________.
__________________ is a factor of production which includes machines and tools and anything else that
helps a business make its product.
If an economic system is able to serve all of its people better in one year than it did the previous year, then
it a has accomplished the goal of _____________________.
The factor of production which includes all natural resources is _____________________.
a.
b.
growth
invisible hand
c. land
d. capital
e. stability
9.
When you choose to watch TV instead of studying, the _________________________ of your decision is
the value, to you, of studying.
10. An economic system that limits the government’s influence is ________________.
11. An economic system that favors strong government involvement is ___________________.
12. The invisible hand does not operate unless there is ____________________________.
a.
b.
Socialism
competition
c. Capitalism
d. equity
e. opportunity cost
Label the following factors of production:
a. capital
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b. labor
c. land
d. entrepreneurship
diamonds
a forklift
someone inventing a new product
a carpenter
gasoline
a factory
the stadium’s scoreboard
a lawyer
a group of investors in a business
lumber
True / False
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31.
The demand for a product is the amount of it that people buy.
The law of demand states that the higher the price, the greater the quantity demanded.
A change in the demand for a product is caused by reasons other than a change in the price of that product.
Film and cameras are related goods because they are complementary goods.
If demand for a good increases, then the demand for its complementary good also increases.
The more of a necessity a good is considered, the more elastic its demand is.
A demand curve illustrates the law of demand.
The demand for a good and its substitute are inversely related.
Good A and Good B are substitutes. A change in the price of Good A will be directly related to a change in
the demand for Good B.
32. Upon getting a raise you became more willing and able to purchase goods at higher prices than before.
Therefore, you help to increase the demand for those products.
33. Elasticity refers to how much price changes when you change demand.
34. The more inelastic the demand for a product is, the less quantity demanded changes when you change
price.
35. When the demand for a product changes, it means the quantity demanded of that product changes at every
price that product is offered at.
36. Advertising helps consumers maintain control over the demand for products.
37. Shifts in demand and movements on a demand curve are essentially the same thing.
Demand Curve for Pizza
$15
Price
$11
$9
$7
3 6
10
14
Quantity Demanded
Using the graph above indicate whether the following situations would:
A. Cause an increase in demand
B. Cause a decrease in demand
C. Cause a movement on the demand curve
38.
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43.
You lose your job
You go from looking at $10 pizzas down to $8 pizzas
It is discovered that eating pizza can prevent cancer
There is an increase in the cost of Chinese food.
The pizza places offer free soda with the purchase of pizza
It is believed that $10 pizzas taste better than $12 pizzas
Multiple Choice
44. According to the law of supply, the quantity supplied of a good rises when the ______of that good rises.
a. market
b. opportunity cost
c. price
d. quality
45. A leftward shift in a supply curve means that supply has _______________.
a. increased
b. decreased
c. stayed the same
46. If there is a change in the price of a product, the __________________ will change.
a. quality
b. quantity supplied
c. demand
d. supply
47. A rightward shift in a supply curve happens when the _________________ at each price changes.
a. demand
b. quality
c. opportunity cost
d. quantity supplied
48. Supply can change even though __________ stay the same.
a. demand
b. price
c. quantity supplied
d. quantity demanded
49. If the supply for a product is ___________, it means that the quantity supplied would change very little or
not at all when price changed.
a. inflated
b. elastic
c. inelastic
d. flexible
50. Supply refers to the amount a producer is willingness and able to _______________ at different prices.
a. demand
b. buy
c. sell
d. discount
51. Technological advancements cause supply to ________________.
a. decrease
b. increase
c. stay the same
True / False
52. A shift in a supply curve would indicate a change in price of the product.
53. According to the law of supply, price and quantity supplied are directly related.
54.
55.
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57.
If a supply curve shifts to the left, there is a decrease in supply.
A vertical supply curve would illustrate inelastic supply.
There is a change in supply when the quantity supplied at different prices changes.
Non-monetary conditions always cause supply to decrease.
Answer whether the following would cause a supply curve to:
a. shift to the right
b. shift to the left
c. move up the curve
58.
59.
60.
61.
d. move down the curve
There is a decrease in supply
The price of a good increases
There is an increase in supply
The price of a good decreases
True/False
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The private sector consists of households, businesses and government sectors.
The payment that constitutes the largest percentage of national income is corporate profits.
The national income is computed by adding together the payments made for the factors of production.
Personal wealth is another name for personal income.
Personal income distribution in the U.S. is unequal.
The needs standard of income distribution is mainly seen in socialistic countries.
In the U.S., income distribution is done more so on the contributive standard than any other.
The value of land you own is considered part of your income.
Sole proprietorships account for the greatest amount of income out of all business organizations.
A benefit of sole proprietorships, is the unlimited liability the owners have.
A limited partnership allows all partners limited liability.
In a limited partnership, profit is shared equally among the partners
A corporation charter is issued by the municipality a corporation is headquartered in.
By “double taxation” we mean that corporations have to pay twice as much income tax.
Incorporating offers the owners of the business limited liability.
Multiple Choice
77. A dividend is the payment received when a person cashes in a corporate _______.
a. bond
b. stock
c. charter
78. The government’s role in the circulation of money ________ during the 20th century.
a. increased
b. decreased
c. stayed the same
79. When the government issues safety standards in the workplace, it is regulating the
a. private sector. b. public sector
80. _______________ takes up the largest percentage of the government’s spending.
a. Defense spending
b. education spending
c. social welfare spending
81. An example of the ________ principle of taxation is our federal income tax because the higher your taxable
income is, the higher your tax bracket.
a. benefit
b. ability-to-pay
82. If everyone had to pay 10 percent of his or her taxable income as personal income tax, this would be a
a. proportional tax.
b. progressive tax
c. regressive tax
83. When a corporation can shift the burden of a tax onto consumers through charging higher prices, the tax is
a. an indirect tax.
b. a direct tax
84. Your “taxable income” is your income ______ the income tax you’ve paid.
a. plus
b. minus
c. times
d. divided by
85. A tax deduction is ________ as a tax credit.
a. the same
b. different
86. An excise tax is one levied on a ______ goods.
a. imported
b. specific
c. public
d. exported
87. In a progressive income tax, larger incomes are taxed at a _________ percentage.
a. lower
b. higher
c. the same
88. The term “fiscal policy” refers to the ___________ philosophy of the government.
a. “tax and spend”
b. interest rate
c. social security
d. defense
89. The “Fed” controls _____________ in the US.
a. fiscal policy b. monetary policy
c. insurance policy
d. disciplinary policy
True/False
90. GDP is a measure of the value of all final goods and services produced in a year by domestically located
resources.
91. If GDP is calculated using current price levels, growth may be the result of inflation.
92. Inflation occurs when prices increase.
93. If GDP changes from one year to the next, it is the result of either a change in prices, or a change in the
number of goods and services produced
94. GDP can be calculated by adding together the money spent by both the public and private sectors.
95. The income approach for calculating GDP includes money received for the four factors of production.
96. When we calculate GDP using constant dollars we call that real GDP.
97. Adding up the payments for the four factors of production equals real GDP.
98. Real GDP is a better measure of economic growth than nominal GDP.
99. Expansionary business cycles are times of economic growth.
100. Changes in real GDP are often used to determine business cycles because real GDP fluctuates due to
changes in many economic indicators.
101. Inflation is more likely to occur during a contractionary business cycle than an expansionary one.
102. Contractionary business cycles would result in less overall interest payments for capital.
103. Contractionary business cycles result in more production.
104. An economic recession is worse than an economic depression.
105. The unemployment rate is a measure of every 16 yr. old and older who is currently not working.
106. If you are over 16 years of age and not interested in finding a job, you are not unemployed.
107. Frictional, or transitional, unemployment happens by choice.
108. Structural unemployment happens when peoples’ skills don’t match available jobs.
109. Leading economic indicators occur during current business cycles.
110. Whether a business cycle is expansionary or contractionary helps to determine leading economic indicators.
Answer “A” if the money in the following situations counts for GDP, and “B” if it does not.
111. Paying someone cash to walk your dog.
112. The money you have to pay because your homeowner insurance went up because your dog bit the walker.
113. If the insurance salesman uses the money to buy an IBM computer.
114. The money the salesman pays to Amazon.com for the books he buys online.
115. The money you spend to buy Amazon stock.
True / False
116. The Dow Jones Industrial Average is the name of one corporate stock on the NY Stock Exchange.
117. When it is said that the “Dow” is up, it means that there has been an increase in all stock values.
118. When you buy a municipal bond, you are actually loaning money to a unit of government.
119. When the “Fed” cuts interest rates, it is actually telling your bank it must lower the interest rates it pays
you.
120. If you wanted to study comparative economic systems in college, you should look for a macroeconomics
course instead of a microeconomics course.
Multiple Choice
121. Competition helps consumers have more control over the ___________ and _________ of goods and
services.
a. production, distribution
b. price, quality
c. stocks, bonds
d. taxation, regulation
122. The money supply is controlled by
a. supply and demand
b. stocks and bonds
c. monetary and fiscal policy
123. The S&P 500, the Dow, and the Nasdaq are all
a. corporations
b. stock exchanges
c. mutual funds
124. Consumer confidence is a
a. leading indicator
b. coincident indicator
c. lagging indicator
125. The “flow of money” is best illustrated by which system of the body
a. circulatory system
b. respiratory system
c. nervous system
d. Bill Gates
d. stock indexes
d. reproductive system