Economics is about allocating resources to produce…
Good and Services
What is an exaple of an allocation decision
coal is set aside to burn as heating fuel
What best explaing why the game of economics cannot eliminate scarcity?
No matter how much supply is produced, people’s demands will alwasy increase to exceed supply
A. Social Country
B. Planned Economy
c. Free – market system
A. Providing eqaulity of wealth
B. Making allocation decisions
C. Protecting Freedom of choice
Because the choices of consumers influence producers and the chouices of profducers also influence consumers, the free makret system has what?
A circular flow onf influences
What best describes a situation where the goal of security is being pursued?
A company opens a new factory and employs more workers.
The GDP would increase significantly if which of the following occurred?
Which of the following describes the purpose of doing a cost benefit analysis?
To make a decision that maximizes benefits
The practice of buying and selling goods and services over the internet is known as
Which of the following is not a goal pursued in the game of economics?
Which of the following is another term for a planned economy?
Calculation of cost and benefit are always …
When the GDP is neither growing nor shrinking, a country’s economy is…
Which of the following best explains vwhy players in the game of economics are often in confict with each other
Some economic goals are incompatible with each other
The internet influences the economic decisions people make because of which of the following…
The info available hat is accessible allows consuemers to consider every available option
Which of the following economic indicators would be most useful for figuring out whether the economy is growing quickly or slowly
A. Improved Resolution
B. Instant Communication
C. Efficient Production
Which of the following is not a feature common to all games?
Which of the following does the government do in a socialist country?
Set prices for goods and services
The two forms of technology are better devices and improved
Technological advancements can improve productivity by doing which of the following
Developing machines that reduce the human effort needed to produce goods and services
Which of the following is one of the benefits of e-commerce brings to consumers
shipping gifts is easy
Which of the following question must be answered in order to turn resources into products?
How should production be organized?
Which of the following best explains why the gov’t makes and enforces laws in a free market system
Laws against theft, fraud, and coercion are needed to protect free choice
Which of the following best explains why minimizing costs is a rational way to make decisions?
Paying a cost means doing without something good or accepting something bad.
In a free market system, the profit motive motivatesd producers to do which of the following?
Minimize costs and maximizes revenues
In the game of economics, workers are the players who function as both producers and _____
Consumers influence the decisions of producers in which of the following ways?
Through the purchasing decisions they make
A. Uses goods and services
B.Provides goods and services
C. Creates goods and services
Advertising is the main source of revenue for which of the following?
Which of the following statements best explains why producers conducts market research
Producers need to know what consumers want so they can sell more and make more profit
A. Financial Planning
B. Rational Choice
C. Risk Aversion
A. A strategy to save for financial goals
B. A decision making method that compares costs and benefits
C. Reluctance for taking a chance
D. Personal satisfaction gained from consumption
A budget is used to do which of the following
Plan income and expenses
Which of the following best explains why the media industry is characterized by an oligopostic market structure?
Centralization of ownership has led to led to an industry controlled by a few large companies
Which of the following is an example of an action that is part of making a rational choice?
Doing a cost benefit analysis
Which of the following best describes the purpose of advertising?
To transmit product messages to an audience
Which of the following is way that companies attempt to get consumers to buy their products instead of their competitor’s products?
A corporation gives out its profits as dividends paid to its ______
Which of the following is used by economists to measure the staisfatction a person gets from the use or consumption of goods and services?
the concept of utility
Which of the following tyoes of businesses is most likely to use the bricks and clicks business model?
Which of the following best states the main difference between a monopoly and olgipoly?
Oligopolies invovle more than one company while monopolies involve only one
Which group of players in the game of economice both produce and use goods and services
Which of the following statements best explains why some peopel are more committed to saving for retirement than other people?
Different people look at future risks differently
Profits is calculated by subtracting ____ from revenues
Unlike a limited partnership, a general partnership has which of the following
Unlimited liability for all partners.
Which of the following is an example of a successful effort at branding?
The word “google” has been added to the dictionary
The prupose of the news media is to do which of the following?
A. Reusing goods to conserve on resources
B. Reducing your use of paper napkins
C. Recycling because everyone in your family does
C. Peer Pressure
Google’s business model is the most similar to that used by companies in which industry?
Which of the following is an advantage corporations enjoy over partnerships
owners of a corporation dont have to work together to make all of the business decisions
Which of the following is a problem for the production of public goods
the possiblity of free riders
Which of the following results of globalization has led to wage cuts for workers in US
All of the following affect the level wages except which of the following?
In which of the following situations would the prices of a good be most likely to increase?
AN increase in production costs results from a rise in wages
Which of the following limits the freedom of workers in the labor market
The level of the minimum wage
Which of the following is shown by the inttersection of the supply curve and demand curve?
The equilibrium price of a good and service
Immigration can result in a general decrease in wages because immigration does which of the following?
Increases the supply of labor
Which of the following occurs when someone buys a third winter coat
Decreasing marginal utility
Which of the following best explains why unions give workers more power in contract negotiations?
Employers can’t fire an entire union because the difficulty of replacing every worker
Which of the following best explains why buying a single-family home in a city is a good investment?
Housing prices in cities generally increase more quickly than anywhere else
Which of the following is intended to demonstrate to an employer the importance of cooperating with workers?
A work slowdown
Which of the following accurately describes a situation in which consumers have inelastic demand?
People cannot quit drinking coffee even though they want to cut down on caffeine intake.
Which of the following results from the fact that housing is expensive and time consuming to build?
The supply of housing is inelastic
Which of the following accurately describes a surplus?
Consumer demand for a certain car is below the number of cars that are produced
A calculation of the amount that average person can afford to buy is a way of measuring which of the following?
Standard of living
Which of the following best describes the effect of a tariff on the import of cars from foreign country?
Foreign cars becomes more expensive
Which of the following is the cause of demand-pull inflation?
Consumers want more and more goods and services
Which of the following results from a large company’s ability to take advantage of economiesof scale?
The company can offer goods more cheaply than smaller retailers
Which of the following has the lowest housing prices and the smallest population density?
Which of the following best explains what happens when unemployment increases during a recession?
The recession worsens into depression
The selling price of houses would be most likely to decrease if there were first a decrease in which of the following?
New housing construction
Which of the following is an example of a fiscal policy?
Raising taxes in order to cover a budget deficit.
What is the most direct result of free trade supplying productive resources to areas where theyre most needed?
A. Protectionist Policy
B. Fiscal Policy
C. Monetary Policy
A. The govenrment limits the amount of European grain that can be sold in the US
B. The gov’t purchases a large amount of domestically grown grain
C. The gov’t restricts the amount of money that can be loaned to farmers
If the prices of building materials increased suddenly by a large amount, there would most likely be which of the following?
Shift to a seller’s market
Which of the following accurately explains what an exchange rate of 1:20 between Canadian dollar and Japanese yen means?
It takes only one Canadian dollar to buy 20 Japanese yen
Which of the followinf describes the most likely effect of the Fed lowering the discount rate on overnight loans?
An increase in money supply
Which of the following best describes why banks aren’t allowed to loan out all of their deposits at once?
If banks loaned out all of their deposits, it would be impossible to meet customers’ demands for withdrawals.
Because banks are often unwilling to loan money to a business in its early stages of development, startup business have a difficult time doing which of the following?
Getting debt financing
Which of the following accurately describes how raising the required reserve ratio reduces the money supply?
When the required reserve ratio is raised, nanks must loan out a smaller portion of their reserves, resulting in fewer loans
Which of the following explains how Treasury bonds can have an eeffect on the size of the money supply?
The Federal Reserve Bank can buy and sell these bonds to raise or lower bank deposits.
a business is unlikely to secure a bank loan to fund its operations without which of the following?
a stable operating history
A. Currency exchange market
B. Commodity Market
C. Bond Market
A. Foreign Money
B. Raw, unprocessed goods
A. Risk of being a stockholder
B. Benefit of being a stockholder
C. Power of being a Stockholder
A. Sotckholders may not get an increase in the amount of their investment
B. Stockholder can vote for the board of directors
C. Stockholders can increase their investment if the price of their stock goes up
Which of the following accurately decribes a businesswoman making an investment?
She buys a Treasury Bond
Which of the following accurately describes socially responsible investing
When investors buy into a company with ethical practices they support
Fundamental analysis of a company’s stock focuses on which of the following?
The company’s traits such as revenues and earning per share
When a company goes public, it faces which of the following?
More gov’t regulation
Which of the following accurately explains the difference between the stock market and the currency exchange market?
Iwnership in companies is traded in the stock market while ownership of foreign money is traded in the currency exchange market
Before the development of money as a medium, goods and services were exchanged through a
Buying on margin involves which of the following
Traders borrowing money from their brokers
Which of the following is most similar to the act of buying a bond?
Giving a loan
In which market is money bought and sold using other types of money?
Currency exchange market
A. Commodity market
B. Currency exchange market
C. Bond market
A commodity futures market exists within the broader commodities market for which of the following reasons?
Contracts setting the price and date for a commodity purchase are transferable
A. Federal Deposit Insurance Corporation (FDIC)
B. Federal Reserve Band (Fed)
C. Securities and Exchange Commission
A. To protect depositors against losing their money when their bank goes out of business
B. To manage the growth of the US economy
C. To prevent stock market fraud
Which of the following statements accurately describes the realtionship between commodity money and fiat money
Commodity money has value in itself while fiat money has value only because it is given value
Which of the following terms describes a company’s first sale of stock to the public?
Initial public offering
Which of the following would be most likely to lead a successful IPO
A company offering an IPO during a bull market
A company that wanted to increase its capital through debt financing could trade in which of the following markets?
B. Labor laws
C. Antitrust laws
A. to protect domestic industry
B. to protect workers
C.to protect competition
What does production limitation involve?
A cartel settin g a maximum output for the good that all members sell
The government must force people to pay taxes so that it can do what?
Make and enforce the laws necessary to make the free-market system work properly
A. retirement programs
B. Infrastructure projects
C. Stock investments
A. Merit good
B. Public good
C. Individual good
Taxes differ from tariffs because taxes are what?
Collected on domestic economic activity
Order in which Federal budget is prepared
1. OMB and the president prepare a proposed budget
2/ COngress decides on the overall level of spending and taxation and passes specific spending bills
3. The president signs various spending bills into law
What does complying with consumer protection regulations do?
Increase production costs and raises prices
Consumer protection regulations do not involve what?
Countries are better able to negotiate free trade agreements because of the existence of which of the following?
World Trade Organization
What do banking regulations prohibit?
Which merti good does the US gov’t provide through a payroll tax
The free market system cannot exist without gov’t regulation for what reason?
The profit motive undermines competition unless competition is protected
A. sales tax
B. Exicse Tax
C. Property Tax
A. 7% charged on the purchase of all non-necessary goods
B. $2 tax charged on each pack of cigarettes
C. 1% charged on the value of all residential houses
Which of these is an example of a labor law?
a minimum wage requirement
Politicians approve pork barrel spending for what purpose?
To win political support
The 20th century has show a tren toward greater whta?
A. Provide labor
B. Create goods and services
C. Protect Competition
What speed up the flow of investment and wages in the the circular flow of the free market system?
Consumer protection regulations are beneficial because they lead to what?
A decrease in injuries and deaths
A. Price Ceiling
B. Trade Restriction
C. Labor Law
A. Limiting the price of a gallon of gas to $2
B. Charging 50% tariff on imported cotton
C. Requiring that all workers be paid at least $5.15 per hour
Gov’t corporations can be described as which of the following?
Private sector companies
The gov’t might enact a price floor in order to accomplish what?
Censorship is a gov’t imposed limit on which of the following?
Individuals’ freedom of expression
Environmental protection laws are good for the economy because they do what?
Safeguard resources needed for future production
What does a progressive taxation system do?
It increases the tax rate as income rises
What was the result of developed countries extracting resources from their colonies?
There was a one way flow of wealth favoring colonizers
Country X would enjoy absolute advantage in the production of clothing under what circumstance?
It’s production costs for clothing were the lowest in the world
A. Bank for Internatinal settlements (BIS)
B. International Monetary Fund (IMF)
C. World Bank
D. World Trade Org (WTO)
A. Prevent economic crisis
B.Create Financial stability
C. Reduce Poverty
D. Promote Free Trade
In order for a country to speacilize its procution, it must there be?
An international division of labor
What is the main purpose of the laons amde by the World Bank
To help countries achieve sustainable development
Why does reducing trade barriers promote increase international trade?
Free trade leads to lower prices and greater sales
D. New Globalizer
A.High level of productive capacity
B.Low levels of industrial capacity
C. Low standard of living
D.High levels of foreign investment
A. WTO agreements
D. Foreign aid
A. Promote free trade
B. Punish unfair practices
C. Reduce production costs
D. Help needy gov’ts
Why does globialization lead to increasing environmental damage?
Environmental protection regulations increase compliance costs and decrease economic competitveness.
Why is foreign aid given?
In order to help needy countries
What is one reason why some people are critical of globalization
It leads to increase damage to the environment
A. Improved communication
B. Trade Liberalization
C. Infrastructure development
A. Makes it easier for international businesses to operate efficiently
B.Facilitates less expensive international trade
C. Provides an incentives for countries to export more goods
D. Increases productivity and lowers prices
Why do some countries fear increasing economic interdependence?
Interdependence involves loss of control over the national economy
How does the WTO help stabilize the global economy?
By assuring that producers will have open access to necessary resources
Why does globalization give countrie an incentive to reduce wages for their workers
Lower production costs help lure foreign investment
Why has globalization contributed to the rise of international terrorism?
Globalization can bring about dislocation and inequality
Why does IMF require countries that accept its loans to follow its policy recommendations
The IMF wants to help struggling countries better manage their economies
Because most developing countries have weak domestic industries, they do not benefit from what?
Free trade policies
Why has globalization led to an increasing gap between the rich and poor countries
countries with well established infrastructure and productive capacities have more competition industries
Country X would have a comparative advantage in the production of cotton under what circumstance?
Country X didn’t have to give up a more profitable form of production in order to grow cotton
Why don’t companies doing business in countries with repressive gov’ts object to the human rights abuses
Companies taking advatage of low labor costs dont make trouble for repressive governments
A. A US computer company buys its memory chips from a company in Taiwan.
B. A group of consumers refuses to buy clothing made in Indonesian sweatshops
C. The IMF asks a gov’t to cut its taxes before receiving an emergency loan
Which of these is a problem that globalization poses for the U.S. gov’t
Increased security concerns
Why do lower labor costs in other countries lead to job loss in the US
It enable foreign producers to undersell domestic producers
Why do banks play an important rolr in the Global Economy
They control the foreign currency reserves that are used for intertnational trade
A. Life Insurance
B. Renter’s Insurance
C. Disability Insurance
D. Liability Insurance
A. When you want to provide for your family after you die
B.When your personal possessions are stolen from your apartment
C. When you have to take a month of work because of injury or illness
D. When you cause a car accident that injures other people
Which of these most accurately describes the costs and benefits of using a credit card?
Credit cards are convenient but can reult in debt.
Using a budget is a good way to what?
Stay out of debt
Why do economic decision vary from person to person even under the same circumstance?
Costs and benefits are subjective
Which of these is an ecample of luxury spending?
Why do some auto insurance customes want medical coverage for their policies?
To avoid having to pay for hospital bills resulting from an accident they cause
What does a good credit history do for consumers?
It makes it easier for them to get loans
Which of these shows how a loan is paid by listing the principle and interest associated with each payment?
An amortication table
What the difference between a brand name and a generic product?
The company that sells the product.
A. Balance transfer fee
B. Non-sufficient funds fee
D. Mortgage Payment
A. Credit card
C. Health Insurance
D. Home Loan
Why do consumers have influence over politicians?
Politicians rely on the votes of consumers to keep them in office
Which of these describes a situation in which people have to make a copay
when they visit a doctor
What kind of contract outlines the obligations of a landlord and his or her renters
What are you paying for when you lease a car?
The decrease in the car’s value
What do banks pay to their savings account customers?
what is the grace period on a credit card?
The number of days the customer can wait to pay for purchases without being charged interest.
Order of steps to show how to make a personal budget
1. Total your income
2. Figure out how is your spending
3. Categorize expenses
4. Determine if your expenses are above or below income
5. Reduce expenses in flexible categories to save or increase savings
Which of these fees is the biggest problem for customers who need to use their credit card to money from the ATM?
Cash advance fee
What makes a credit card more convenient that a debit car?
It can be used to buy things without immediate payment
Which of these states one of the opportunity costs of attending college?
Time spent on schoolwork takes away from the chance to earn money at a job.
Which of these protects customers who purchase defective products?
A socially responsible consumer might boycott a company that uses what?
Participatin in a boycott often involves a sacrifice because the boycotters end up doing what?
Paying higher prices
What is the purpose of a letter writing campaign conducted by a group of consumers?
To get a company to change its business practices voluntarily
What makes a checking account more convenient than a savings account?
You can spend your money without having to withdraw cash first.
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