Econ Honors Final Study Guide
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Based on the chart, which of these statements is true?
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Attorneys and construction managers are in high demand.
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In 2011, Finland had a GDP of $195 billion and a per capita GDP of $36,000. Life expectancy was about 79 years. Which of these additional factors would most support the conclusion that Finland has a developed rather than an emerging economy?
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Finland has a free-market economy.
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Sayuri's Asian Café makes the best pot stickers in town. The kitchen's production is usually between 20 and 22 pot stickers per hour. Sayuri buys a new machine to help the team make pot stickers faster. She tracks production over the course of seven days. On which day does the machine make a positive impact on production?
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Day 6
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Given the data in the chart, over which country does the United States have a comparative advantage in oil production?
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Canada
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Which of the following entities would most likely agree with Adam Smith's statement?
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Stockholders for a pharmaceuticals company that has a new cancer drug
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Look at the graph. A bookstore owner increases the price of art books to $25. Which of these would occur?
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A surplus, because the price is higher than equilibrium price
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Given the data in the chart, which of the following statements is true?
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Australia and the United States are more developed than India.
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Given the data in the chart above, which statement explains why these three countries would benefit from specialization and trade?
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No country has an absolute advantage in all activities.
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The United States raises taxes on imported electronic goods. This type of trade barrier is known as a(n)
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tariff
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Niall wants to expand his science-fiction webzine to provide academic articles on science used in science fiction. He hires four new articles editors, as well as a copy editor. He also replaces his old webmaster. Niall is increasing which resource?
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Labor
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Supporters of free trade zones would most likely argue that this map demonstrates how free trade
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breaks down barriers among nations
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The Starfire Coffee chain was the only coffee-shop chain and meeting place in many American cities for more than 12 years. People paid $5 for a mug of peppermint coffee and the experience of sitting in front of a roaring fire, chatting with friends. Twelve years after Starfire's appearance, a similar coffee-shop chain, Reindeer Brews, entered the marketplace. Reindeer charges $3 for a mug of hot cocoa and a similar community experience. How would you characterize this scenario?;
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- Non-price competition in a monopolistic market - Non-price competition in a purely competitive market - Price competition in a monopolistically competitive market - Price competition in a purely competitive market
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Which of the following statements reflects the broad economic goal of equity?
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Removing funding from public universities that refuse to accept women, minorities, or economically disadvantaged applicants as students
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An artisan sells handmade journals. His products are successful. Based on the chart, what will happen next?
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He will increase the price and make more journals.
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In the rural farming town of York Springs, Smith's was the only grocery store and Lehman's was the only animal feed mill. How would you describe these businesses?
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Natural monopolies
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The most immediate impact of rising inflation is
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higher prices
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A game store sells the latest Dungeoncrawl game at the suggested retail value. Initially, the game sells well, until a combination of bad reviews and word of mouth reduce demand drastically. What should the store do to sell the remaining Dungeoncrawl games?
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Reduce the price until the games are sold.
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Angela is a musician who writes short musical pieces for use in religious services and nonreligious festivals. There is a large anniversary celebration in her town in one month, and she has been asked to compose an original nonreligious piece. How might this affect her production possibility curve for new music?
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Production would increase for nonreligious music and decrease for religious music.
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Country A has a mixed economy with free-market leanings. Country B has an absolute command economy. Both want to increase corn product exports. Which action would Country A most likely take that Country B would not?
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Lower taxes on corn farming
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Paul and his friend Tori make decorative art out of silver spoons. They want to start a business that they can easily dissolve when they move on to their next project. Which of these will suit their needs best?
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Partnership
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An Wang George Washington Carver Samuel F. B. Morse Margaret Hutchison Rousseau Choose one entrepreneur from this list. Write about an innovative idea this entrepreneur had. Include details about the person who brought it into being and the contributions he or she made to our society. How did this entrepreneur embody one or more characteristics from the HUNT? Present your response in a clear, organized manner and cite specific examples.
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Dr. An Wang was a computer engineer who helped create the desktop computer. He help more than 35 patents and helped advance digital information technologies. Dr. Wang ways asked to create a memory storage device and invented the magnetic memory core. Wang embodies HUNT because he took the first step in his computer career by opening Wang Laboratories so that he could create and sell memory cores.
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Create your own company, choosing a product or service you would like to sell. Which form or forms of business organization would be best for your company? Justify your answer, addressing each of the four potential ways you could organize your business. Your essay should demonstrate mastery of content, understanding of material, and excellent presentation of your ideas.
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If I were to open my own company, it would be a daycare. I would chose to organize it using a Limited Liability Corporation because I would want to be able to protect my property and I would be protected from double taxation. I wouldn't want a corporation because I don't think I would be big enough and also I don't want to sell stock of my company. I don't want a sole proprietorship because that doesn't protect my property and valuables. The same thing goes for a partnership, I don't want to be liable of the debt of the business if there should be any.
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Which of the following statements best accounts for the data shown in the graph above?
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Spending relative to tax revenue drastically increased in 2009
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David saves money from his teaching job to buy a new boat when he retires in 20 years. The boat will cost $30,000. He has $12,000 in his simple interest savings account. To reach his goal by retirement, David should
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move his money to a compound interest account
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Which of these is a natural monopoly?
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Sewage treatment
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Following U.S. involvement in the Korean War and the related period of low unemployment and rising prices, the Federal Reserve intervened to curb growth and decrease inflation. At what point in the business cycle did the Federal Reserve take action?
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- Contraction - Expansion - Peak
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The Great Depression was a period of high unemployment, poverty, and deflation. When the United States entered World War II, the government increased spending, resulting in inflation and decreased unemployment. Which of these characterizes the period of increased government spending?
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- Expansion - Peak - Trough
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If the economy is in decline, and the Federal Reserve wants to encourage banks to lend to consumers, which step will the Fed likely take?
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- Decrease the discount rate. - Increase the federal funds rate. - Raise the prime rate.
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Economic forecasters predict a long period of job growth and consumer spending. The Federal Reserve is most likely to do which of the following to encourage this expansion?
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- Keep the discount rate low - Sell government securities - Maintain high reserve requirements
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The federal government approves additional funding for food resources in Africa. Which of the following would be a potential negative externality for the global environment?
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Other countries follow suit and shift funds from conservation to food.
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One bank offers a 2% variable rate loan, while a competitor offers a 3% fixed rate loan over the same period. It is likely better to choose the fixed rate loan, even though the interest rate is higher, because the rate on the
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variable loan can increase dramatically
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Imagine the federal government has a national debt of $10.2 trillion. Congress's budget for the coming year includes a spending projection of $4.2 billion. Tax revenue projects $3.8 billion. Which fiscal policy should Congress adopt to avoid increasing the national debt?
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Decrease spending
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If Juliet consistently buys health insurance for twenty years but never suffers a costly illness, were her premium payments wasted?
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No, if the safety of being insured was worth more to her than the monetary cost of the premiums
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Which of the following fiscal policies would most likely reduce unemployment?
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Increasing funding for local grants
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A new bakery opens downtown. Which circumstance would most likely be a negative externality?
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The old bakery down the street loses some customers.
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Cardinal Comics produces graphic historical novels and retails them through local shops throughout the United States. The publisher maintains an in-house staff of editors and illustrators but contracts out writing, printing, and distribution. Its printer uses domestically recycled paper but imports ink and much of its printing equipment from overseas. Segment D of the circular flow diagram above reflects which part of this scenario?
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Consumers pay sales tax on purchase of novels.
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One benefit of a community college is
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reduced costs compared to four-year degrees
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Which of the following industries benefits from government subsidies?
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Agriculture
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What can result from the line marked "Artificial Price"?
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Shortage
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A free-trade agreement lowers restrictions on trucking across international borders. Which of the following would be a negative externality for the local environment?
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An increase in air pollution
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Jared's friends invite him to dinner at a new restaurant in town. Money has been tight this month, and the new restaurant offers the same meal as another local restaurant but at a higher price. Jared declines the invitation to the new restaurant and opts to dine at the less expensive establishment. Which of the following best represents the reason for Jared's decision?
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High food prices at the new restaurant
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Which best describes the function of the Federal Reserve System?
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Control of the money supply
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Study the map above. The TVA believes that the positive externalities outweigh the negative externalities of which renewable resource?
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Water
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Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide, explain how the environmental issue you chose affects the relationship between business and factor market.
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In relation to pet over population, the factors market relates to business because shelters and other businesses provide a shelter for the stray animals. Businesses relate to factor markets because veterinarian offices buy medical equipment from market suppliers.
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Which two investment options would be best if you were planning to invest $10,000, with the expectation that you would be making a down payment for a house in 10 years? Consider the kind of investment, rate of return, level of risk, and other factors.
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I would invest in stocks, because they can make a lot of money in a short period. However, since stocks can sometimes be risky, I would also invest in US Treasury Bonds because they can be safer and I will know how much money I am getting because their is a fixed rate.
