Econ exam B review

In every economic system, what must people choose to do?
a) Satisfy all the wants of their society
b) Make the best use of scarce resources
c) Create and equal distribution of income
d) Save money to reduce national debt
e) The cost of a new opportunity

b) Make the best use of scarce resources

Which of the following descriptions best explains the meaning of opportunity cost?
a) The initial cost of starting a new business
b) The cost of business failure
c) The cost of choosing one alternative over another
d) The risk associated with producing a new item
e) The cost of a new opportunity

c) The cost of choosing one alternative over another

What is the fundamental problem of economics?
a) Choosing the factors of production
b) Scarcity
c) Lack of wealth
d) Limited time
e) Usefulness of goods and services

b) Scarcity

The sum of skills, abilities, health knowledge, and motivation of people is known as \__________.
a) Reserves of the nation
b) Human capital
c) Natural resources
d) Raw materials
e) Human resources

b) Human capital

Which of the following lists the four factors of production?
a) Land, labor, wants, entrepreneurs
b) Land, labor, capital, entrepreneurs
c) Land, labor, capital, scarcity
d) Labor, needs, capital, entrepreneurs
e) Natural resources, Skills, money, raw materials

b) Land, labor, capital, entrepreneurs

What is the preferred method of resource allocation in Cuba?
a) Queuing
b) Planned market
c) Equal shares
d) Brute force
e) Tradition

b) Planned market

T or F: In investing there are some level of risk.

True - some level of risk

The Gross Domestic Product is a measurement of \__________.
a) the quantity of money generated in a year
b) the dollar value of all final goods and services, and structures
produced within a country's borders in a year
c) the dollar value of all final goods and services, and structures, minus taxes, produced in a country's borders in a year
d) all the production created by the residents of a country in a year
e) the dollar value

b) the dollar value of all final goods and services, and structures produced within a country's borders in a year

Consumers use \____ and \_____ to satisfy their \_____ and \_____.
a) wants, needs, goods, services
b) magazines, videos, lust, desires
c) money, goods, dreams, hopes
d) goods, services, wants, needs
e) dollars, services, wants, hunger

d) goods, services, wants, needs

"To take an example,... One man draws out the wire, another straightens it, a third cuts it, a fourth points it;... and [the making of] a pin is, in this manner, divided into about eighteen distinct operations."
In the above passage Adam Smith is describing the basic economic concept of
a) paradox of value
b) division of labor
c) specialization
d) labor
e) manufacturing

c) specialization

Actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of \________.
a) opportunity costs
b) economic interdependence
c) trade
d) globalism
e) economic opportunity

b) economic interdependence

Which of the following is an example of a service at our beloved local Turkey Hill?
a) a milkshake
b) the lottery machines
c) the cash register
d) offering a shoplifter a chance to return and pay for his attempted theft
e) gasoline

d) offering a shoplifter a chance to return and pay for his attempted theft

Manufactured goods are called \_______.
a) nondurable goods
b) useful tools
c) capital goods
d) consumer goods
e) durable goods

d) consumer goods

Which of the following is not a factor market?
a) 8th grade basketball players
b) college basketball players
c) NBA free agents
d) retired NBA players
e) 12th grade basketball players

d) retired NBA players

T or F: The DJIA is a specialist system to trade stocks in a physical location in New York City

False - djia

The organized way in which society provides for the wants and needs for its people is a(n) \________.
a) need fulfillment
b) economic system
c) voluntary exchange
d) the supermarket
e) planned economy

b) economic system

Which of the following is one of the basic economic questions?
a) How much to produce?
b) What to produce?
c) When to produce?
d) Where to produce?
e) What to charge for a product

b) What to produce?

Which of the following is not an example of a factor of production?
a) an oven
b) an Applebee's restaurant
c) an iced tea
d) an online ad for Applebee's Happy Hour
e) customers for dinner

e) customers for dinner

The St. Charles Basketball Team's human capital is most evident in which example?
a) a forward
b) a CCL championship team
c) all of St. Charles basketball players, coaches, managers, parents, and fans
d) the talents of the SC coaches
e) all of St. Charles' basketball players, coaches, managers, parents, and fans

e) all of St. Charles' basketball players, coaches, managers, parents, and fans

Which of the following best describes the relationship between trade-offs and opportunity costs?

a) Opportunity costs are not incurred when trade-offs are made.

b) Opportunity costs are the opposite of trade-offs

c) Trade-offs lower the opportunity costs of an economic decision

d) Trade-offs occur when there are opportunity costs

e) There are no relations between these concepts

d) Trade-offs occur when there are opportunity costs

The struggle among sellers to attract consumers by offering the best products at the lowest prices is known as \_______.
a) voluntary exchange
b) competition
c) profit motive
d) property rights
e) market environment

b) competition

QuickEasy Corporation announces a 3-for-I stock split. You own I50 shares. After the split you will own _____ shares.

a) 50

b) 100

c) 150

d) 350

e) 450

e) 450

A popular model used to illustrate the concept of opportunity cost is the ________.

a) factors of production chart

b) cost-benefit analysis.

c) paradox of value graph

d) production possibilities frontier

e) the alternate choices chart.

d) production possibilities frontier

Land, labor, capital, and entrepreneurs are \_________.
a) factor markets
b) the factors of production
c) the basis of employment
d) results of productions
e) used in all economics

b) the factors of production

Which of the following is a characteristic of a command economy?
a) localized decision making
b) freedom for both producers and consumers
c) changes directions slowly
d) consumers play a key role in what is produced
e) all needs are met

e) all needs are met

For something to have value, it must \______.
a) cost a lot of money
b) always be available
c) be at a reduced price
d) have utility
e) be productive

d) have utility

The dollar valve of all final goods, services, and structures produced within a country's borders in a \_________.
a) the federal budget
b) actual economic growth
c) the national tax based
d) the Gross Domestic Product
e) total capital

d) the Gross Domestic Product

Your stomach growls before breakfast. You choose a waffle to satisfy your appetite. The waffle represents a _________.
a) need
b) want
c) opportunity cost
d) trade

e) food resource

b) want

Which of the following is an important characteristic of a traditional economy?
a) public property rights
b) competition
c) lack of individual initiative
d) government intervention
e) taxes to fund the government

c) lack of individual initiative

Imagine you decide to purchase a $25 Amazon gift card. Which of the following is an opportunity cost of your decision?
a) the time spent deciding to spend your money
b) the time spent making the purchase
c) $25 in cash in your hand
d) the taxes paid on the purchase
e) The $25 of gasoline you almost bought

e) The $25 of gasoline you almost bought

Which of the following is a characteristic of a production possibilities frontier?

a) It cannot expand

b) It illustrates the concept of all trade-offs

c) It is not affected by economic growth

d) It indicates the ideal production levels for goods and services

e) It is always accurate

d) It indicates the ideal production levels for goods and services

Phil McKraken lives in Portland, Oregon. He owns his small house, he has a radio, several pairs of clothes, and a car he drives to his job. He uses his skills to paint landscapes that he sells at the local art gallery. This is a picture of Phil's \_________.
a) value
b) wealth
c) skills
d) standard of living
e) economic opportunity

d) standard of living

You see that your stock trade volume was 52330 for the day. You note that the stock chart says this category is counted by hundreds. How many shares were traded?
a) 5,233
b) 52,330
c) 523,000
d) 5,233,000
e) 52,330,000

d) 5,233,000

Based on our discussions which of the following countries has the highest standard of living?
a) Senegal
b) Sri Lanka
c) Saudi Arabia
d) Spain
e) Samoa

d) Spain

The ________ of a McDonald's Fish sandwich can be expressed in dollars and cents.
a) utility
b) wealth
c) price
d) value
e) cost

d) Value

Which source of college funding must be repaid after leaving school?
a) federal grants
b) Stafford loans
c) cash from Grandma's college fund
d) fellowships
e) scholarships

b) Stafford loans

In The Wealth of Nations, what did Adam Smith argue were the real sources of the wealth of a nation?
a) federal grants
b) the abilities and skills of the population
c) tillable land
d) money in the treasury
e) raw materials

b) the abilities and skills of the population

Division of labor is a characteristic in \_________.
a) home craft businesses
b) entrepreneurship
c) classroom education
d) tribal units
e) army units

c) classroom education

Who (or what) ultimately determines the success of a product in a market economy?
a) the government
b) the consumer
c) the business producing the product
d) the store selling the product
e) marketing campaigns

b) the consumer

The minimum wage is an example of a federal law that supports \________.
a) economic growth
b) economic equity
c) full employment
d) economic efficiency
e) economic security

b) economic equity

Which of the following ways can a market system collapse?
a) prices rise too high
b) consumers do not know where markets are
c) too many competitors
d) bad weather
e) too much unemployment

b) consumers do not know where markets are

On your spreadsheet how do you calculate the total value of your account?

a) stocks - commissions

b) cash + current stock values

c) 100,000 - (stock purchases + commissions)

d) stock purchase prices + cash

e) 100,000 - (stock purchases - stock values)

b) cash + current stock values

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In a free market system which of the following is a role of the government?
a) instigator
b) guardian
c) competitor
d) provider
e) profiter

b) guardian

A nation's total output of goods and services decreases over time. This process is known as \______.
a) efficiency
b) a drop in GDP
c) deflation
d) a rise in GDP
e) consumer spending decrease

b) a drop in GDP

The stock markets tends to like \__________.
a) negative news
b) positive news
c) lower earnings
d) higher interest rates
e) hostilities among nations

b) positive news

The primary difference between socialist and communist economic principles are \_______.
a) nothing
b) items for citizens
c) command decisions
d) levels of state ownership of industries
e) freedoms

d) levels of state ownership of industries

Paradox of value refers to the _______.

a) a high value of an essential item and the low value of a nonessential item

b) contradiction between gross domestic product and market value

c) contradiction of what consumers want and what they need.

d) high value of a nonessential item and the low value of an essential item.

e) the choice between opportunity costs and trade-offs.

d) high value of a nonessential item and the low value of an essential item.

Manufactured goods produced by other goods are called \__________.
a) nondurable goods
b) useful tools
c) capital goods
d) consumer goods
e) durable goods

c) capital goods

T or F: TINSTAAFL is a myth created by economists

False - myth

The economic system that requires adherence to rituals is a \_________ economy.
a) regional
b) command
c) traditional
d) market
e) mixed

c) traditional

There are seven \_______ in the world of publicly traded stocks.
a) markets
b) industries
c) DJIAs
d) companies
e) sectors

e) sectors

Which of the following is NOT a method of the allocation of resources?
a) random
b) force
c) need
d) want
e) equal shares

b) force

You have just made an investment using all of your extra money. You want to make as much money as possible on this investment. You also know the profits could be large. When making a decision like this you employ the theory of \___________.
a) the longer you invest the better the rate
b) the greater the risk the greater the reward
c) the greater the risk the less the reward
d) the power of diversification
e) how to be a greedy ogre

b) the greater the risk the greater the reward

Which of the following is an example of a service?
a) gasoline
b) a car
c) an air pump
d) a car radio
e) a test drive

e) a test drive

An economic good, like your pencil, that is designed to be used over the course of a school year, is a \________.
a) durable good
b) capital good
c) consumer good
d) service good
e) nondurable good

b) capital good

A market economy \________.
a) discourages competition
b) limits products
c) satisfies all needs
d) demands excellence
e) often fails

d) demands excellence

Which statement best explains why the Masai do not use money?
a) some people would be rich, and some people poor
b) money was invented to support a better economy
c) money was invented to strengthen government power and control
d) money is not part of their tradition
e) money was invented to facilitate the exchange of goods and services

d) money is not part of their tradition

Programs that provide services for the public using taxpayer dollars are often considered \_________.
a) communist
b) socialist
c) free market
d) mixed market
e) tribal

b) socialist

Why is China considered a mixed economy?
a) Its economy includes complete government control over population
b) Its economy includes government control and market and traditional components
c) Its economy is based on communist ideals of contribution and consumption
d) Its economy has little government regulation and is mainly traditional
e) many different ethnic groups mix together in China

b) Its economy includes government control and market and traditional components

Economists are concerned with \_________, goods that are useful, relatively scarce, and transferable to others.
a) wealth products
b) economic products
c) capital services
d) mediums of exchange
e) barter products

b) economic products

What motivates people to work, save and invest?

Economic freedom

Who ultimately determines the success of a product?

Consumer

A market economy \_______?

demands excellence

A risk taker in search of profits is known as?

entrepreneur

Willco cooperation announces a 4 for 1 stock split, you own 75 shares, after the split you will own \____ shares.

300

the united states can best be described as having a \_______?

modified free enterprise system

how do consumers exercise their power in the American economy?

they decide what to purchase

where is the idea located that affirms that we have the privilege and the right to own private property in the us economy?

the us constitution

what reason could a market system fail

lack of competition in the market place

what type of economy is most common worldwide

mixed

he decided to buy the stock of the sugondese tribe, the stock is listed at $87.50 per share. the stock also has a quarterly dividend of $0.55. this means that there is an annual dividend of \_____ and a dividend yield of \_____.

$2.20, 2.5%

in a traditional system which of the following is a role of the government?

provider

which economic system cannot change direction rapidly?

market

which of the following described a move away from pure capitalism?

nationalization of major industries in Hugo Chavez's venezuela

Organized way in which a society provides for the wants and needs of its people is an \______

economic system

T or F: all forms of capitalism used around the world are identical to the us forms of capitalism

False - all forms of capitalism are not identical to us

Which large cooperation would typically not offer an annual dividend on their stock?

Amazon

what economic event happened in 1913?

the FED was created

the concept of voluntary exchange means \______

people freely and willingly engage in market transactions

the minimum wage is an example of a federal law that supports \________

economic equity

A smooth rock, a piece of crystal, a Eurodollar or a fresh coconut could all be \_______, items accepted by all parties as payment for goods and services

mediums of exchange

\______ economies use money, \________ societies have an economy

most, all

the united states money is backed by \_______

The us government and the American economy

The recent commemorative US presidential dollar coins are examples of \__________

specie

\_____ is the amount of money left over after all of the costs of production have been paid

profit

The largest sector of the macroeconomy is the \______

consumer sector

one limitation of a gold standard is \______

a country cannot print more money than gold it owns

The share of profits of a corporation, paid out to stockholders, is a \_______

dividend

the problem with continental dollars, which were printed during the revolutionary war, was that \______

so much was printed they became nearly worthless

money gains its value when it \______

becomes less available

fiscal mismanagement of the economy, one side effect of poor supervision is usually \______, and is the social cost of economic instability

political chaos

\______ is the secretary of the treasury

Janet Yellen

\______ is the chairman of the federal reserve

Jerome Powell

the federal reserve system is a \_______, which is owned by \________

private cooperation, member banks

during the 1960's, legislation was enacted to help bolster the banking system in the united states, this was the \_________

Glass Steagall Act

which of the following methods is not useful for the FED to expand the money supply

cell securities

one advantage to using gold as a standard is \________

people have more confidence in the currency

T or F: economic growth is important to a country because it allows for the growth of government programs

Fasle - growth of government programs

T or F: banks hold on to most of the money deposited with them, and lend a small portion of the remainder

False - banks lend a small portion of the remainder

during the early part of the 1900's, united states money was backed by \_______

our national gold reserves