1. Economics Review Fall 2009 Semester

2. Economics Review Who wrote “The Wealth of Nations” describing a new economic system based on freedom called capitalism? Who wrote “The Wealth of Nations” describing a new economic system based on freedom called capitalism? Adam Smith Adam Smith Karl Marx Karl Marx Milton Freeman Milton Freeman Samuel Adams Samuel Adams

3. Economics Review Adam Smith Adam Smith

4. Economics Review Under modified capitalism in the United States, which of the following is not done by the government? Under modified capitalism in the United States, which of the following is not done by the government? Distributor of Resources Distributor of Resources Protector of Workers and Consumers Protector of Workers and Consumers Provider of Goods and Services Provider of Goods and Services Regulator of Businesses Regulator of Businesses

5. Economics Review Distributor of Resources Distributor of Resources

6. Economics Review A business that is owned and managed by one person is a/an A business that is owned and managed by one person is a/an Corporation Corporation Limited Partnership Limited Partnership Sole Proprietorship Sole Proprietorship Treasury Treasury

7. Economics Review Sole Proprietorship Sole Proprietorship

8. Economics Review When the market is dominated by a few large, profitable firms, this is known as ____. When the market is dominated by a few large, profitable firms, this is known as ____. Monopolistic Competition Monopolistic Competition Monopoly Monopoly Pure Competition Pure Competition Oligopoly Oligopoly

9. Economics Review Oligopoly Oligopoly

10. Economics Review The process in which union and company representatives meet to negotiate a new labor contract is known as – The process in which union and company representatives meet to negotiate a new labor contract is known as – Arbitration Arbitration Cooperative Work Cooperative Work Collective Bargaining Collective Bargaining Mediation Mediation

11. Economics Review Collective Bargaining Collective Bargaining

12. Economics Review A person cannot be required to join a union as a condition of getting or keeping a job if there are – A person cannot be required to join a union as a condition of getting or keeping a job if there are – Labor Contracts Labor Contracts Minority Rights Minority Rights Right to Work Laws Right to Work Laws Open Market Operations Open Market Operations

13. Economics Review Right to Work Laws Right to Work Laws

14. Economics Review If you are denied credit, you have the right to – If you are denied credit, you have the right to – see your credit files see your credit files get a credit card get a credit card fill out a credit application fill out a credit application throw a fit throw a fit

15. Economics Review see your credit files see your credit files

16. Economics Review Which of the following is not a phase of the business cycle? Which of the following is not a phase of the business cycle? Expansion Expansion Peak Peak Inflation Inflation Trough Trough

17. Economics Review Inflation Inflation

18. Economics Review Concentrating on producing what a country can do best and importing other goods is defined as – Concentrating on producing what a country can do best and importing other goods is defined as – an assembly line an assembly line specialization specialization industrialization industrialization trade advantage trade advantage

19. Economics Review specialization specialization

20. Economics Review The price at which currency is bought and sold is known as – The price at which currency is bought and sold is known as – exchange rate exchange rate absolute value absolute value stock price stock price monetary union monetary union

21. Economics Review exchange rate exchange rate

22. Economics Review A business owned and managed by a single individual is known as – A business owned and managed by a single individual is known as – Partnership Partnership Corporation Corporation Sole Proprietorship Sole Proprietorship Non-profit Organization Non-profit Organization

23. Economics Review Sole Proprietorship Sole Proprietorship

24. Economics Review An association that operates to benefit a cause, charity, etc., is known as a – An association that operates to benefit a cause, charity, etc., is known as a – Partnership Partnership Corporation Corporation Sole Proprietorship Sole Proprietorship Non-profit Organization Non-profit Organization

25. Economics Review Non-profit Organization Non-profit Organization

26. Economics Review Which of the following would be an advantage of a franchise? Which of the following would be an advantage of a franchise? There is product identity. There is product identity. If the business goes bankrupt, the owner owes nothing. If the business goes bankrupt, the owner owes nothing. No one can sue the store. No one can sue the store. The profits are tax free. The profits are tax free.

27. Economics Review There is product identity.

28. Economics Review In which of the following business organizations would the owner have total liability and receive all of the profits? In which of the following business organizations would the owner have total liability and receive all of the profits? Non-profit organization Non-profit organization Partnership Partnership Sole Proprietorship Sole Proprietorship Corporation Corporation

29. Economics Review Sole Proprietorship Sole Proprietorship

30. Economics Review At which point (s) along the PPF can this society produce efficiently? At which point (s) along the PPF can this society produce efficiently?

31. Economics Review Points A and B Points A and B

32. Economics Review At which point along the PPF does the society under produce? At which point along the PPF does the society under produce?

33. Economics Review Point D Point D

34. Economics Review Can this society produce at Point C Can this society produce at Point C along the PPF Curve? How? How?

35. Economics Review By adding new technology or resources in an economy By adding new technology or resources in an economy

36. Economics Review Which of the following has the most regulations and is difficult to start up? Which of the following has the most regulations and is difficult to start up? Cottage industry Cottage industry Sole proprietorship Sole proprietorship Partnership Partnership Corporation Corporation

37. Economics Review Corporation Corporation

38. Economics Review Which of the following is provided to retired and disabled workers and their survivors? Which of the following is provided to retired and disabled workers and their survivors? Social Security Social Security Demand aide Demand aide Compensation Compensation Unemployment Unemployment

39. Economics Review Social Security Social Security

40. Economics Review The largest source of tax income for the federal government is – The largest source of tax income for the federal government is – Excise taxes Excise taxes Personal Income tax Personal Income tax Social Security taxes Social Security taxes Tariffs Tariffs

41. Economics Review Personal Income tax Personal Income tax

42. Economics Review Which of the following is not a problem in developing nations? Which of the following is not a problem in developing nations? Illiteracy Illiteracy Limited natural resources Limited natural resources Stable government Stable government Poor health care Poor health care

43. Economics Review Stable Government Stable Government

44. Economics Review Which is not an economic goal of the United States? Which is not an economic goal of the United States? Economic Equity Economic Equity Economic Growth Economic Growth High Unemployment High Unemployment Price Stability Price Stability

45. Economics Review High Unemployment High Unemployment

46. Economics Review A shortage will cause the price to – A shortage will cause the price to – Fall Fall Rise Rise Fluctuate Fluctuate Stay the same Stay the same

47. Economics Review Rise Rise

48. Economics Review A surplus will cause the price to – A surplus will cause the price to – Fall Fall Rise Rise Fluctuate Fluctuate Stay the same Stay the same

49. Economics Review Fall Fall

50. Economics Review Which generalization is valid based on the information learned in the class? Which generalization is valid based on the information learned in the class? Countries with low literacy rates have a high per capita G.D.P. Countries with low literacy rates have a high per capita G.D.P. People tend to live longer lives in developing nations. People tend to live longer lives in developing nations. Countries with a high per capita G.D.P. tend to have high literacy rates. Countries with a high per capita G.D.P. tend to have high literacy rates. In nations with a high per capita G.D.P., people usually have a short life expectancy. In nations with a high per capita G.D.P., people usually have a short life expectancy.

51. Economics Review Countries with a high per capita G.D.P. tend to have high literacy rates. Countries with a high per capita G.D.P. tend to have high literacy rates.

52. Economics Review The main reason that some US businesses moved their factories to other countries in the 1900s was ____________. The main reason that some US businesses moved their factories to other countries in the 1900s was ____________. better workers better workers better climate better climate cheaper wages cheaper wages more modern factories more modern factories

53. Economics Review cheaper wages cheaper wages

54. Economics Review Which of the following summarizes the cause and effect relationship intended by the North American Free Trade Agreement? Which of the following summarizes the cause and effect relationship intended by the North American Free Trade Agreement? Removal of trade restrictions among United States, Canada, and Mexico; stimulation of economic growth Removal of trade restrictions among United States, Canada, and Mexico; stimulation of economic growth Removal of trade restrictions among United States, Canada, and Mexico; takeover of markets favored by the European Union Removal of trade restrictions among United States, Canada, and Mexico; takeover of markets favored by the European Union Tightening of trade restrictions among United States, Canada, and Mexico; establishment of more industries in the United States Tightening of trade restrictions among United States, Canada, and Mexico; establishment of more industries in the United States Imposition of stricter import and export regulations; greater regulation of American industry Imposition of stricter import and export regulations; greater regulation of American industry

55. Economics Review Removal of trade restrictions among United States, Canada, and Mexico; stimulation of economic growth Removal of trade restrictions among United States, Canada, and Mexico; stimulation of economic growth

56. Economics Review Which is not a way to increase productivity? Poorly educated and poorly trained workers Poorly educated and poorly trained workers More capital goods per worker More capital goods per worker New and better technology New and better technology Better allocation of resources Better allocation of resources

57. Economics Review Poorly educated and poorly trained workers Poorly educated and poorly trained workers

58. Economics Review Which is NOT one of the three fundamental economic questions? Which is NOT one of the three fundamental economic questions? Who consumes goods and services? Who consumes goods and services? How should goods and services be produced? How should goods and services be produced? What goods and services should be produced? What goods and services should be produced? Why to produce? Why to produce?

59. Economics Review Why to produce? Why to produce?

60. Economics Review Which of the following is not a characteristic of capitalism? Which of the following is not a characteristic of capitalism? Economic Freedom Economic Freedom Equal Income Equal Income Private Property Private Property Voluntary Exchange Voluntary Exchange

61. Economics Review Equal Income Equal Income

62. Economics Review If supply exceeds demand there is (a/an) – If supply exceeds demand there is (a/an) – Bankruptcy Bankruptcy Inflation Inflation Surplus Surplus Shortage Shortage

63. Economics Review Surplus Surplus

64. Economics Review If demand exceeds supply there is (a/an) – If demand exceeds supply there is (a/an) – Bankruptcy Bankruptcy Inflation Inflation Surplus Surplus Shortage Shortage

65. Economics Review Shortage Shortage

66. Economics Review When the business and owners are legally separated so that the owners aren’t responsible for the debts of the business, you have – When the business and owners are legally separated so that the owners aren’t responsible for the debts of the business, you have – a cooperative a cooperative a holding company a holding company limited liability limited liability unlimited life unlimited life

67. Economics Review limited liability limited liability

68. Economics Review Issued by state and local governments, they pay a lower rate of interest but are tax-free. Issued by state and local governments, they pay a lower rate of interest but are tax-free. Penny Stock Penny Stock Municipal Bonds “Munis” Municipal Bonds “Munis” Preferred Stock Preferred Stock Treasury Notes Treasury Notes

69. Economics Review Municipal Bonds “Munis” Municipal Bonds “Munis”

70. Economics Review Amount of interest charged member banks for temporary loans by the Fed is called – Amount of interest charged member banks for temporary loans by the Fed is called – Reserve Requirement Reserve Requirement Insider Trading Insider Trading Insured Deposit Insured Deposit Discount Rate Discount Rate

72. Economics Review Dollar value of all final goods and services produced within a country’s borders in a year is known as – Dollar value of all final goods and services produced within a country’s borders in a year is known as – Gross Domestic Product Gross Domestic Product Personal Consumption Rate Personal Consumption Rate Quality of Life Quality of Life Wealth Distribution Wealth Distribution

73. Economics Review Gross Domestic Product Gross Domestic Product

74. Economics Review Which of the following insurance covers your vehicle for anything other than collision, such as theft, broken glass, water, etc.? Which of the following insurance covers your vehicle for anything other than collision, such as theft, broken glass, water, etc.? Comprehensive Comprehensive Collateral Collateral No liability No liability Replacement Replacement

75. Economics Review Comprehensive Comprehensive

76. Economics Review Country A can produce cars at a lower cost than Country B. Country A has a (n) _____ Advantage. Country A can produce cars at a lower cost than Country B. Country A has a (n) _____ Advantage. Trade Advantage Trade Advantage Favorable Advantage Favorable Advantage Comparative Advantage Comparative Advantage Absolute Advantage Absolute Advantage

77. Economics Review Absolute Advantage Absolute Advantage

78. Economics Review Bill Gates’ goal for his company was to – Bill Gates’ goal for his company was to – form a utopia by everyone giving from each of their abilities to each of their needs form a utopia by everyone giving from each of their abilities to each of their needs have a computer on every desk and in every home, all running his software have a computer on every desk and in every home, all running his software create a new system based on no taxation without political representation create a new system based on no taxation without political representation allow customers to have it there way while encouraging competition allow customers to have it there way while encouraging competition

79. Economics Review have a computer on every desk and in every home, all running his software have a computer on every desk and in every home, all running his software

80. Economics Review All of the following are true concerning a corporation except – All of the following are true concerning a corporation except – stockholders own the company stockholders own the company the owners receive dividends the owners receive dividends the owners are liable the owners are liable policies are set by a board of directors policies are set by a board of directors

81. Economics Review the owners are liable the owners are liable

82. Economics Review In which of the following can the company be owned by outside investors to increase capital availability? In which of the following can the company be owned by outside investors to increase capital availability? Partnership Partnership Corporation Corporation Non-profit Organization Non-profit Organization Sole Proprietorship Sole Proprietorship

83. Economics Review Corporation Corporation

84. Given the above table and graph, determine at what prices (s) equilibrium will occur. A$1.00 B$2.00 C$3.00 D$4.00

85. Economics Review $3.00

86. Economics Review Given the above table and graph, determine at what quantity equilibrium will occur. A. 4,000 B. 7,000 C. 8,000 D. 10,000

87. Economics Review 7,000 7,000

88. Economics Review If the demand curve remains unchanged and the supply curve shifts to the right – quantity would increase and the price would decrease quantity would increase and the price would decrease both supply and price would increase both supply and price would increase the change in demand would cause the shift in supply the change in demand would cause the shift in supply the equilibrium price would increase the equilibrium price would increase

89. Economics Review The price would decrease and the quantity would increase The price would decrease and the quantity would increase

90. Economics Review If the supply curve remains unchanged and the demand curve shifts to the left – If the supply curve remains unchanged and the demand curve shifts to the left – both supply and price would increase both supply and price would increase the change in demand would cause the shift in supply the change in demand would cause the shift in supply quantity would decrease and the price would increase quantity would decrease and the price would increase the equilibrium price would increase the equilibrium price would increase

91. Economics Review quantity would decrease and the price would increase quantity would decrease and the price would increase

92. Economics Review If there was a freeze in Northern Florida that destroyed 40% of the oranges in the state, what will happen to the supply of oranges? If there was a freeze in Northern Florida that destroyed 40% of the oranges in the state, what will happen to the supply of oranges? increase increase not change at all not change at all decrease decrease demand would increase demand would increase

93. Economics Review decrease decrease

94. Economics Review If the demand curve shifts to the left and the supply curve shifts to the left – If the demand curve shifts to the left and the supply curve shifts to the left – price would increase and quantity would increase price would increase and quantity would increase price would decrease and quantity would increase price would decrease and quantity would increase price would decrease and quantity would decrease price would decrease and quantity would decrease price would remain unchanged and quantity would decrease price would remain unchanged and quantity would decrease

95. Economics Review price would remain unchanged and quantity would decrease price would remain unchanged and quantity would decrease

96. Economics Review If the demand curve shifts to the right and the supply curve shifts to the right – If the demand curve shifts to the right and the supply curve shifts to the right – price would increase and quantity would increase price would increase and quantity would increase price would decrease and quantity would increase price would decrease and quantity would increase price would decrease and quantity would remain unchanged price would decrease and quantity would remain unchanged price would remain unchanged and quantity would increase price would remain unchanged and quantity would increase

97. Economics Review price would remain unchanged and quantity would increase price would remain unchanged and quantity would increase

98. Economics Review The FDIC – provides protection for citizens traveling to other countries provides protection for citizens traveling to other countries insures major corporations insures major corporations collects federal income taxes collects federal income taxes insures customer deposits if a bank fails insures customer deposits if a bank fails

99. Economics Review insures customer deposits if a bank fails insures customer deposits if a bank fails

100. Economics Review In which of the following business organizations are decisions shared by the few owners? In which of the following business organizations are decisions shared by the few owners? Non-profit Organization Non-profit Organization Sole Proprietorship Sole Proprietorship Partnership Partnership Corporation Corporation

101. Economics Review Partnership Partnership

102. Economics Review Which of the following is a true statement concerning fiscal policy? The Federal Reserve Bank monitors and oversees. The Federal Reserve Bank monitors and oversees. Has an immediate effect on the economy Has an immediate effect on the economy Interest rates are used to correct for unemployment Interest rates are used to correct for unemployment Government taxation and spending are the tools used Government taxation and spending are the tools used

103. Economics Review Government taxation and spending are the tools used Government taxation and spending are the tools used

104. Economics Review What is Scarcity? only applies to those living in poverty only applies to those living in poverty means that there are limited resources to satisfy unlimited wants means that there are limited resources to satisfy unlimited wants has been overcome by nations establishing colonies has been overcome by nations establishing colonies occurs most often in North America occurs most often in North America

105. Economics Review means that there are limited resources to satisfy unlimited wants means that there are limited resources to satisfy unlimited wants

106. Economics Review In a partnership – In a partnership – the owners are not liable for losses the owners are not liable for losses two or more people own the company two or more people own the company stocks are sold on the NASDAQ stocks are sold on the NASDAQ the company continues even upon the death of an owner the company continues even upon the death of an owner

107. Economics Review two or more people own the company two or more people own the company

108. Economics Review Which of the following is a deduction on personal income taxes if a person itemizes? Which of the following is a deduction on personal income taxes if a person itemizes? Interest on three or more homes Interest on three or more homes Campaign Contributions Campaign Contributions Property Taxes Property Taxes All of the above All of the above

109. Economics Review Property Taxes Property Taxes

110. Economics Review Based on this excerpt, what is the relationship between American exports and American economic growth? Based on this excerpt, what is the relationship between American exports and American economic growth? There is no relationship. There is no relationship. Exports account for one-third of Exports account for one-third of America’s economic growth. The American economy depends totally on exports. The American economy depends totally on exports. Over half of the economy’s growth can be attributed to exports. Over half of the economy’s growth can be attributed to exports.

111. Economics Review Exports account for one-third of Exports account for one-third of America’s economic growth.

112. Economics Review Protectionism is incompatible with a pure market economy because in a pure market economy. Protectionism is incompatible with a pure market economy because in a pure market economy. governments do not exist governments do not exist government does not interfere in the economy government does not interfere in the economy nations are self-sufficient and do not trade with one another nations are self-sufficient and do not trade with one another the government regulates the economy the government regulates the economy

113. Economics Review government does not interfere in the economy government does not interfere in the economy

114. What role do households play in the production of businesses’ products and government’s goods and services? Households – Aprovide the taxes that make production possible Bprovide the wages and rents that make production possible. Cproduce and sell business and government goods and services. Dprovide the resources that make production possible.

115. Economics Review provide the resources that make production possible.

116. Economics Review A group of government planners makes all economic decisions. The group assigns natural, human, and capital resources to the production of those goods and services it wants. They decide how to produce and then how to distribute them. A group of government planners makes all economic decisions. The group assigns natural, human, and capital resources to the production of those goods and services it wants. They decide how to produce and then how to distribute them. The description above best applies to the Feudal economy of 13th-century Europe Feudal economy of 13th-century Europe Traditional economy of the Swahili Traditional economy of the Swahili Free enterprise system of the United States Free enterprise system of the United States Command economy of the former Soviet Union Command economy of the former Soviet Union

117. Economics Review Command economy of the former Soviet Union Command economy of the former Soviet Union

118. Economics Review Which of the following questions might an economist ask in order to develop a hypothesis about consumer spending in the United States after World War I? Which of the following questions might an economist ask in order to develop a hypothesis about consumer spending in the United States after World War I? What products did households buy in the 1920s? What products did households buy in the 1920s? How many labor strikes occurred in the 1920s? How many labor strikes occurred in the 1920s? What was the average hourly wage in the 1920s? What was the average hourly wage in the 1920s? How long did it take to produce a car in the 1920s? How long did it take to produce a car in the 1920s?

119. Economics Review What products did households buy in the 1920s? What products did households buy in the 1920s?

120. Economics Review Before 1800, most goods were created start to finish, by a single artisan or crafts person. By 1800, factory workers completed smaller steps in the manufacturing process over and over. The goods were then transferred to another person or machine to complete another step in the process. Before 1800, most goods were created start to finish, by a single artisan or crafts person. By 1800, factory workers completed smaller steps in the manufacturing process over and over. The goods were then transferred to another person or machine to complete another step in the process. The process described in the latter part of the passage is known as – technological innovations technological innovations negative externality negative externality creative entrepreneurship creative entrepreneurship increased competition increased competition

121. Economics Review technological innovations technological innovations

122. Economics Review Which economic activity could be carried out just as well in suburban, rural, or urban environments? Which economic activity could be carried out just as well in suburban, rural, or urban environments? A service activity such as teaching. A service activity such as teaching. A primary activity such as mining or logging. A primary activity such as mining or logging. A processing activity such as manufacturing. A processing activity such as manufacturing. A primary activity such as farming or fishing. A primary activity such as farming or fishing.

123. Economics Review A service activity such as teaching. A service activity such as teaching.

124. Economics Review The new technologies of the late twentieth century have changed how some people satisfy their basic needs by- The new technologies of the late twentieth century have changed how some people satisfy their basic needs by- encouraging people to be more productive during their vacations encouraging people to be more productive during their vacations increasing the number of hours people work to produce goods and services increasing the number of hours people work to produce goods and services facilitating communication that leads to the production of goods and services facilitating communication that leads to the production of goods and services allowing families to meet their basic needs through subsistence agriculture allowing families to meet their basic needs through subsistence agriculture

125. Economics Review facilitating communication that leads to the production of goods and services facilitating communication that leads to the production of goods and services

126. Economics Review Why will deficit spending end a depression? Why will deficit spending end a depression? It increases purchasing power and stimulates economic growth. It increases purchasing power and stimulates economic growth. The national government takes over and operates businesses more efficiently. The national government takes over and operates businesses more efficiently. The national government turns its revenue over to the states. The national government turns its revenue over to the states. It encourages investment through lower interest rates. It encourages investment through lower interest rates.

127. Economics Review It increases purchasing power and stimulates economic growth. It increases purchasing power and stimulates economic growth.

128. Economics Review Be able to read a chart and graph. Be able to read a chart and graph.