question

Which of the following best describes the term economics?

answer

A study of how people try to satisfy what appears to be seeming unlimited and competing wants through the careful use of relatively scarce resources.

question

The tools, equipment and machinery that are needed in order to produce other goods and services are called

answer

Capital goods

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When one is making an economic decision, how can a decision making grid be utilized in order to make good choices?

answer

can help weigh trade-offs and opportutnity costs.

question

What is the main goal of division of labor?

answer

efficiency in production

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The following economic concept is best described as the dollar value of all final goods and services produced within a country's borders and is the most comprehensive measure of a country's total production is

answer

GDP

question

Which of the following is a model that is often used to measure and illustrate the concept of opportunity cost?

answer

Production possibilities frontier

question

When a country is producing at the production possibilities frontier, it can be said that the country is operating

answer

At full potential

question

If an action in one part of the world or country has an economic impact on another part of the world or country, it can be said that this is an example of

answer

Economic interdependence

question

In a free enterprise/free market economy, who ultimately decides what to produce?

answer

Consumers

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The United State has

answer

A modified private enterprise economy

question

A command economy has all of the following characteristics EXCEPT

answer

It is designed to meet all of the wants of all the consumers

question

Which of the follwoing statements is TRUE?. a. Many times people have to determine what their needs are verses what their wants are. b. command economies are more concerned with efficiency than equality c. resources are typically unlimited while wants are limited d. in a free market economy, all needs and wants are promised to each individual.

answer

Many times people have to determine what their needs are verses what their wants are.

question

hich of the following BEST describes a MARKET economy? Select one: a. In a market economy, individual firms are unable to make profits. b. In a market economy, the governement typically makes ALL of the essential economic decisions. c. In a market economy, individual firms, households, and consumers have economic freedom and can make most of their own decisions. d. In a market economy, there is little private property or competition.

answer

In a market economy, individual firms, households, and consumers have economic freedom and can make most of their own decisions.

question

which of the following is TRUE regarding land, labor, capital, and entrepreneurship? Select one: a. All of these are correct b. economists rarely consider these factors when looking at an economy. c. these factors of production have an endless supply. d. division of labor, specialization, and other methods are often used to maximize efficiency with these factors of production.

answer

division of labor, specialization, and other methods are often used to maximize efficiency with these factors of production.

question

Which of the following statements is true regarding division and specialization of labor? Select one: a. When labor is divided and workers specialize on specific tasks, resources are often used more efficiently than before specialization. b. All of these are correct. c. When producers divide labor and use specialization techniques, production usually declines. d. Division of labor is a concept that was used only in agricutlure in 1910.

answer

when labor is divided and workers specialize on specific tasks, resources are often used more efficiently than before specialization. Correct

question

How are families, communities, governments and nations similar when considering opportunity costs?

answer

Because of scarcity, families, communities, governments, and nations all have to consider opportunity costs when making decisions.

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Which of the following is true regarding entrepreneurs in a free market economy?

answer

Although entrepreneurs face risks, many decide it is worth it because of the possible financial and personal rewards they could experience if their business succeeded

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In which of the following economies would private property rights be most important?

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free market economy

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In this economy, the government determines how much of a good to produce. The government also decides what to produce. The consumers do not have much choice in the matter of what goods they will get

answer

command economy

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A demand schedule shows

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a listing of the various quantities demanded of a particular product at all prices that might prevail in the market. Correct

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Advertising, fashion trends, and new product introductions serve to

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create consumer demand.

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An increase in the price of cameras results in a decrease in the demand for film. The two products are

answer

complements

question

An increase in the price of milk causes a decrease in the demand for cereal. The two products are

answer

complements.

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Because a price increase has little or no effect on quantity demand, the demand for the product is

answer

inelastic. Correct

question

Consumers willingness to replace a costly item with a less costly item is an example of

answer

the substitution effect. Correct

question

For most products and services, increased price results in

answer

a decreased in quantity demanded.

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When a customers need for a product is not urgent, demand tends to be

answer

elastic.

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When a manufacturer of pain medication reduced the price of the medication by 30%, profits declined by almost exactly 30%. Demand for the product is

answer

unit elastic.

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Which of the following would cause the market supply curve of a good or service to shift?

answer

A change in the cost of labor to make the product

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Which of the following generally decreases the supply of a product?

answer

The tax on the product increases

question

Total cost is the sum of

answer

fixed and variable costs

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A company is maximizing profit when marginal revenue

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Equal to marginal cost

question

When a producer makes more goods at every possible price

answer

The supply curve has shifted to the right

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The theory of production deals with the relationship between the factors of production and

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The output of goods and services Correct

question

Property taxes and rent payments would be classified as which types of costs?

answer

Fixed costs

question

One advantage of e-commerce is that

answer

Many times the overhead costs are relatively low

question

Maximum profits are made when marginal revenue

answer

Is equal to marginal cost

question

Which of the following best shows how the law of supply works? Select one: a. Companies do not consider the price of the goods they are selling. b. A company will most likely increase production if its input costs are higher c. A company will most likely put more items on the market if the price is high. Correct d. A company will most likely decrease efficiency if demand is low.

answer

A company will most likely put more items on the market if the price is high. Correct

question

If a certain mp3 player became popular, which of the following business decisions most reflects the way the producers of the player would act?

answer

The producers would most likely increase supply.

question

nvestments in technology typically

answer

Tends to make production more efficient

question

Which of the following is true concerning production in a free market economy? Select one: a. the producer typically decides what to make by what he or she thinks will be in demand. b. the government typically tells the producers how much to make c. the producer does not have any control over how much of a product to make d. the governemnt typically tells producers what to make

answer

the producer typically decides what to make by what he or she thinks will be in demand

question

All of the following are reasons why prices work to allocate goods EXCEPT Select one: a. Competitive markets find their own equilibrium without interference b. Prices do not favor the producer or consumer c. The price system ensures that everyone gets everything they need. Correct d. prices can serve as signals to producers

answer

The price system ensures that everyone gets everything they need.

question

In a market economy, if the price of a good is high, it signals for

answer

The producer to supply more and the consumer to buy less

question

When does a surplus occur at any given price?

answer

When the quantity demanded is less than the quantity supplied

question

Which of the following is represented with the federal minimum wage law?

answer

A price floor

question

The demand for gold increases when

answer

Economic and political conditions are unstable

question

When an unexpected event occurs, how do prices help a market economy adjust?

answer

By adjusting the consumption and production of goods

question

Which of the following is true regarding the theory of competitive pricing? Select one: a. it typically calls for governmental intervention in price setting b. It is a set of real and existing conditions c. It is not helpful in measuring other, less competitive markets d. It is a set of ideal conditions and outcomes

answer

It is a set of ideal conditions and outcomes

question

A deficiency payment is a payment made by the federal government

answer

To the producers to make up the difference between the market and target prices Correct

question

Which of the following represents a probable unintended effect of a price ceiling? Select one: a. there are no unintended effects of price ceilings because the government does not allow this b. A shortage of the supply of the good with the price ceiling. c. The increase in quality of the good with the price ceiling. d. A surplus of the supply of the good with the price ceiling

answer

A shortage of the supply of the good with the price ceiling.

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