Economics Exam Revision

It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________. opportunity cost; production cost production cost; resource cost production cost; opportunity cost resource cost; production cost

Which occurs during disequilibrium? Check all that apply. Supply and demand meet. Supply is less than demand. Supply and demand set prices. Supply is greater than demand. Supply and demand set production.

Which is the best definition of hyperinflation? a gradual decrease in the price of goods and services a gradual increase in the price of goods and services an exponential decrease in the price of goods and services an exponential increase in the price of goods and services

How do trade agreements help the countries involved? by restricting imports by accelerating production by expanding tax revenues by decreasing trade barriers

Look at the following chart. Producer A's opportunity cost would be analyzing the climate to see which fruit would grow better. studying the profitability of growing apples versus oranges. researching what competitors are doing. choosing to grow both fruit varieties or only apples.

Which are affected by the factors of production? Check all that apply. the demand of the item the availability of the item the cost of the item the quality of the item the popularity of the item

When it spends money on education, a government is trying to find a way to meet a social need. encourage immediate economic growth. meet a social need and improve the economy. find a way to spend budget surpluses.

If expansionary taxation policies are left unchecked, which is the most likely result? reduced profits high inflation reduced production reduced disposable income

Businesses can use globalization to their advantage by creating trade barriers to other countries. reducing exports to other countries. finding customers in other countries. insourcing jobs in other countries.

People who oppose labor unions believe that unions keep more qualified workers from being hired. create more new jobs than workers can fill. make many businesses more competitive. encourage employers to reduce salaries.

Demand-pull inflation occurs when the price of goods rises suddenly and extremely fast. consumers begin purchasing more goods. producers need more money to make and distribute goods. the government prints more money and pushes prices up.

What is an example of scarcity an abundance of resources limited resources renewable resources a choice of resources

How does a socialist government with a command economy manage its economy? The government lets producers set wages for workers. The government owns all homes and other forms of housing. The government allows consumers to make their own choices. The government controls factories and other forms of production.

What is the role of the three questions of economics? to assess product profitability to aid in production decisions to offset a poor economy to determine quality and cost

What new laws did the New York Factory Investigating Commission request? Check all that apply. no factory workers under age ten use of central air-conditioning systems a minimum wage for all workers increased sanitation standards fire alarms and sprinkler systems

Which economic indicators are used to measure the global economy? Choose four answers. purchasing power parity trade volumes spending power parity labor market data gross domestic product trade deficits and surpluses

Why is the slow growth that can result from a contractionary policy a positive effect? It can increase interest rates. It can decrease available credit. It can increase the money supply. It can decrease inflation.

The graph shows a point of equilibrium. What is the price at which equilibrium is achieved? $8 $9 $10 $30

The chart shows the marginal cost of producing apple pies. This chart demonstrates that the marginal cost initially decreases as production increases. initially increases as production increases. eventually decreases as production increases. eventually increases as production decreases.

In a free market system, price controls can include both floors and

Corporate taxes are a type of income tax. property tax. sales tax. excise tax.

The graph shows the market for graphic T-shirts. What does the graph show about the relationship between a product and its price? As the amount of a product goes up, the price goes up. As the amount of a product goes down, the price goes up. As the interest in a product goes up, the price goes up. As the interest in a product goes down, the price goes up.

A company that makes mobile phones introduces a new, faster model that has strong consumer interest. However, the old model is still available. What will most likely happen to the price of the old model, and why? The price will fall to encourage consumers to continue to purchase it. The price will rise to encourage the producer to make more old models. The price will fall to discourage the producer from making more old models. The price will rise to encourage consumers to buy both models in equal amounts.

Economists can use new technology to study data and patterns. create and apply automation. improve production and shipping. increase demand and consumption.

In a competitive market, a computer store offers customers a warranty to help pay for any future damages. This is an example of following a federal regulation. lowering prices for customers. reducing the risk for consumers. creating a new or better product.

What is one example of a closed economy? a barter system that does not rely on money or other currency a restricted system that blocks trade with international partners a trade-based system that encourages the flow of goods and services an old-fashioned system that preserves traditional choices and customs

A regulatory agency that attempts to limit risk in the banking system is the FDA. the EPA. the OCC. the HHS.

If Country A is an agricultural country and Country B has many cities and factories, it would make sense for both countries to set up car manufacturing plants. Country A to specialize in growing corn while Country B specializes in making cars. Country A to specialize in making cars while Country B specializes in growing corn. both countries to compete in growing more corn.

What is one way that technology can improve the production of goods? Websites can allow consumers to purchase goods online. Container ships can transport a number of goods at once. Automation can create goods more cheaply and easily. Airlines can send goods from one place to another.

Which organization created a shared economy? European Union World Trade Organization North American Free Trade Agreements Association of Southeast Asian Nations

Which best describes why governments enact tariffs? to reduce the price of domestic products to discourage consumers from purchasing foreign goods to limit the sale of foreign goods to ensure that domestic producers make a profit

If it becomes less expensive to travel overseas from the United States, American tourists will benefit from the fact that tourist sites are getting crowded and dirty. the US dollar has become stronger. prices of foreign goods are rising. the US dollar has declined in value.

The graph shows the price of a good compared to the quantity demanded. This graph demonstrates how the amount produced slightly changes with the price. the amount produced greatly changes with the price. the quantity demanded changes slightly with the price. the quantity demanded changes greatly with the price.

What is one reason why the government would provide financial assistance to an entrepreneur? to decrease the high rate of failure of new businesses to encourage the invention and development of products to stimulate the economy while decreasing unemployment to limit the amount of personal funds used to start the business

What is the best definition of profit? Profit is the possible income from producing an additional item. Profit is the price of producing one additional unit of a good. Profit is the additional income gained from selling an additional good. Profit is the financial gain from business activity minus expenses.

When entrepreneurs develop new products, other companies also experience growth because they immediately copy the successful product. create many companion products. try to develop their own products. attempt to improve the product.

Jacob is considering buying a new car. Which nonrenewable resource should influence the decision? labor water minerals petroleum

Which are indicators that economists use to measure how an economy grows? Select all that apply. monitoring election results measuring how much the economy produces monitoring the popularity of different music groups studying the economy of another country tracking the unemployment rate

When the government injects money into the economy, consumers may have more disposable income, which may lead to higher unemployment. higher production. lower production. increases in taxes.

The Fed may respond to a recession by discouraging consumer borrowing. decreasing interest rates. decreasing government spending. decreasing available credit.

Who was Adam Smith? He was a philosopher who promoted the idea of free enterprise. He was an economist who spoke against the market economy. He was an official who ran an important government agency. He was a producer who operated a factory in Scotland.

In a mixed market economy, what is a typical way the government can reduce unemployment? The government can pay for projects to create work. The government can control new factories to provide jobs. The government can create new farm fields to hire workers. The government can raise taxes to encourage employment.

Public property is land or goods owned by an individual. owned by the government. used for private businesses. used to gain personal wealth.

Embargoes, quotas, and standards are tools that countries use to reduce exports. to punish other countries. to restrict imports. to raise prices of domestic goods.

The graph below shows the value of the US dollar versus the Canadian dollar. According to the graph, the American dollar was the strongest during which month? October 2012. November 2012. February 2013. March 2013.

Which situation is an example of comparative advantage in an international market? Country A decides to grow extra potatoes so they have more to export, while Country B does not. Factories in Country A can produce the same number of tablets as factories in Country B, or the factories in Country A could be used to build more laptops than the factories in Country B. Country A invests in a new technology while Country B chooses to invest in education. Farmland in Country A can produce 100 units of rice per acre, while Country B can only produce 70 units of rice using the same amount of workers and farmland.

When does government regulate producers in a mixed-market economy? always as needed as requested never

Economists use changes in GDP to measure the balance of trade with other countries. any economic growth or shrinkage. the causes of unemployment. the distances between cities.

Which of these practices describe how producers in oligopolies generally try to create competition? Check all that apply. by keeping prices low by offering promotions by advertising by cultivating brand loyalty by overcoming barriers to entry by developing a specific image

Which best describes how advertising influences consumer choice in an oligopoly? Advertising coaxes people to buy new products. Advertising alerts consumers to price reductions. Advertising undermines competition. Advertising informs brand knowledge.