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Econ Final Exam
| Question | Answer |
|---|---|
| Microeconomics is the study of | Choices |
| Food, clothing and shelter are examples of human | Needs |
| A resource is anything people use to | Make or obtain what they need or want |
| What are the factors of production | Resources that can be used used to produce goods and services |
| The building, structures, machinery, and tools used in the production process are called what | Capital goods |
| Technology often | Increases efficiency |
| An entrepreneur is a | Risk taker |
| The process of developing a new combination of the other factors of production is called | Entrepreneurship |
| People are forced to make decisions about how to use resources effectively because resources are | Limited and wants are unlimited |
| A production possibilities curve illustrates all the combinations of | Two goods and services that can be produced |
| The means of exchange that allows consumer to use an item before they have completely paid for it is | Credit |
| The principle of exchange depends on | Unmet wants and needs |
| The ability to fulfill all one's needs without outside assistance is called | Self-sufficiency |
| When developments in one region of the country influence developments in another, economists say that these regions are | Interdependent |
| The economic system in which children are likely to carry on the economic roles played by their parents is called a | Traditional economy |
| The economic system in which the basic economic questions are answered by government planners is called a | Command economy |
| In which economic system do individuals answer the basic economic questions | Market |
| Mixed economies that are closest to the pure command model are classified as what | Authoritarian socialism |
| The economic condition that exists between businesses that sell the same product is called | Competition |
| A contact is an agreement that is | legally combined |
| The economic condition that exists between businesses that sell the same product is called | Competition |
| What are the economic goals of the US economy | Freedom, efficiency, equity, security, stability, growth |
| The tendency of consumer to replace a relatively more expensive product with a similar, lower-priced product is called the | Substitution effect |
| A demand curve is only a | Snap shot of a market because it represents a specific time period |
| Non-price determinants of demand include | Consumers taste and preferences, market size, income, prices of related goods, consumer expectations |
| What affects market size | Private business decision, government decision, and technology |
| Construction of new houses increases. What will happen to demand for such complementary goods as timber, paint, and paint brushes | It will increase |
| If a product is NOT as necessity, it will tend to have | Elastic demand |
| If there are readily available substitutes for a product, that product will tend to have | Elastic demand |
| If a product is a necessity, it will tend to have | Inelastic demand |
| If there are no readily available substitutes for a product, that product will tend to have | Inelastic demand |
| A product such as salt has inelastic demand. How will a small increase in price affect demand for salt | No change |
| A simple way to measure demand elasticity is through the | Total-revenue test |
| Is the relationship between a product's price and the quantity supplied direct or indirect | Direct |
| The degree to which changes in price affect the quantity supplied is called the | Elasticity of supply |
| If a good can be made quickly, inexpensively, and using a few, readily available resources, it has | Elastic supply |
| If producing a good takes a great deal of time, money, and resources that are not readily available, that good has | Inelastic supply |
| Give an example of a good with inelastic supply | Gold |
| If, after the passage of time, the determinants of supply cause an increase in the supply of a product, the supply curve for that product shifts | Right |
| If, after the passage of time, the determinants of supply cause a decrease in the supply of a product, the supply curve for that product shifts | Left |
| If prices of resources fall, supply will | Increase |
| The three stages of production that can be predicted by the law of diminishing returns are increasing returns, diminishing returns, and | Negative marginal returns |
| The production costs that do not change with the level of output are called | Fixed costs |
| Workers' wages are an example of | Variable costs |
| The additional costs of producing one more unit of output are called | Marginal costs |
| On what does a free enterprise economy rely to answer the basic economic questions of what, how, and for whom to produce goods | Price system |
| What is the main form of communication between producers and consumer in a free-enterprise market | Prices |
| Limitations of the price system are sometimes called | Market failures |
| Pollution is an example of | Negative externality |
| When someone who does not sell or buy a product benefits from its production, a | Positive externalities |
| What situation exists when quantity supplied and quantity demanded for a product are equal at the same price | Market equilibrium |
| When the quantity supplied is greater than the quantity demanded at a particular price, a | Surplus exists |
| A government regulation that sets a minimum level for prices is called a | Floor |
| The minimum wage is an example of a | Price floor |
| Over time, a price floor may cause a | Surplus |
| A government sometimes rations a good because the supply of that good is | Low |
| Ticket scalpers are an example of | Black-market |
| The most common type of business organization in the US | Sole proprietorship |
| The chief advantage of a sole proprietorship is | Easy to form |
| The disadvantage of sole proprietorship that could affect the owner's family | Unlimited liability |
| The disadvantages of sole proprietorship include unlimited liability, sole responsibility, limited growth potential, and | Lack of longevity |
| In what business organization do two or more people enjoy equal decision-making authority | General Partnership |
| The advantages of partnerships include ease of start-up, specialization, shared decision making, and | Shared business losses |
| The disadvantages of partnerships: | Unlimited liability, potential for conflict, and lack of longevity |
| The business structure that is legally distinct from its owners is the | Corporation |
| The application that a corporation makes to a state to obtain a license is a | Articles of incoporation |
| The most common way that corporations raise funds is by issuing | Stock |
| The Standard Oil Trust was an example of a | Horizontal combination |
| The US Steel Corp. was an example of a | Vertical combination |
| Which type of business does not focus on financial gain | Non-profit |
| A person is classified as employed if during the taking of the Current Population Survey, they meet what three criteria | Worked for pay or profit on or more hours, worked without pay in a family business 15 or more hours, and have jobs but did not work as a result of illness, weather, vacation, or labor diputes |
| A doctor working as a store clerk is an example of an | Underemployed person |
| During the winter months, many farm workers face | Seasonal |
| Who does inflation affect | People living on fixed incomes |
| What does inflation cause | Value of real wages go down, decrease savings and investing |
| Why do we measure the number of people living in poverty in the US | Examine the economic well being of the nation |
| What is the system of exchange that does not involve money called | Barter |
| An item is considered money if it serves which three functions | Medium of exchange, standard of value, and store value |
| When the government uses prices to figure taxes, money is serving as a | Standard of value |
| When people put money in savings account, money is serving as a | Store of value |
| Which condition must money meet serve as a store of value | Non-parish able and keeps value |
| If money can be carried from place to place and transferred from person to person, it has the characteristic of | Portability |
| If the smallest unit of U.S. money was the $100 bill, which characteristic of money would it not meet | Divisibility |
| If visitors from another country tried to use their own money in the US, they would find that it did not meet the characteristic of | Acceptability |
| When precious metals such as gold and silver are used as money, they are classified as what | Commodities money |
| In Virginia in the early 1600s, tobacco was used as a form of | Commodities |
| In the late 1600s, the Massachusetts Bay Colony issued bills of credit that could be redeemed for specie. Of what form of money is this an example | Representative |
| When the government of the US prints on a piece of paper the words "This note is legal tender for all debts, public and private," it has transformed the paper into what | Feote |
| Which pieces of legislation gave the federal government the power to charter banks and to require banks to hold gold and silver reserves | National banking act |
| The Federal Reserve Act of 1913 | Established the Fed as the national bank all members were required to join the Fed |
| Three trends in banking in the 1990s | Automation, deregulation, and slablesation |
| The tools of fiscal policy include | Spending, taxing, borrowing policies |
| Is also called proportional | Flat rate |
| A tax that takes the same percentage of income from individuals at all income levels is | Proportional |
| A tax that takes a larger percentage of income from a high-income person than from a low-income person is | Progressive |
| A tax that takes a larger percentage of income from low-income groups than from high-income groups is a | Regressive tax |
| Because it falls more heavily on people in lower-income groups, the sales tax is a | Regressive tax |
| An excise tax is a | Regressive tax |
| Specific examples of tools of fiscal policy include | Spending, taxing, and borrowing |
| What might Congress do to help reduce inflation | Increase taxes, reduce tax credits, reduce spending, and reduce transfer payments |
| Why did the federal government first develop an orderly budget process | War time spending, increase corruption, and progressive reform |
Created by:
Timothy_Tarlton