Economics With Finical Literacy Module 1 Practice Exam – Flashcards
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In a week you could read two books or see four movies. The opportunity cost of choosing to read one book is A. One book B. Two books C. One movie D. Two movies
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D. Two movies
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Ezra runs a gyro stall at the local farmers' market. He would like to expand and open his own shop downtown. He has made the chart above, listing some potential costs and benefits of expansion. Item 3 under Costs best illustrates which concept? A. Businesses must grow to stay competitive. B. Fluctuations in demand cause fluctuations in supply. C. Labor shortages drive up business costs. D. Scarcity of resources necessitates economic choices.
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D. Scarcity
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In the graph, a shift from point A to point B represents which of the following? A. A decrease in demand B. A decrease in quantity demanded C. An increase in demand D. An increase in quantity demanded
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D. An increase in quantity demanded
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Use the graph to answer the following question. Which line indicates the demand curve? A. one B. two C. The x-axis D. The y-axis
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A. One
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Which of the following best describes the concept of "equilibrium price"? A. Sellers are happy with the price, but buyers are unhappy with the quantity. B. Sellers are unhappy with the price, but buyers are happy with the quantity. C. Both sellers and buyers are happy with the price and quantity. D. Both sellers and buyers are unhappy with the price and quantity.
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C. Both sellers and buyers are happy with the price and quantity
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A new superhero movie has become very popular, and its toy action figures have recently hit the market. What impact will production of the new movie's toys have on the toys of last year's superhero movie? A. Demand for the old action heroes will decrease, causing a decrease in equilibrium quantity. B. Demand for the old action heroes will decrease, causing an increase in market price. C. Demand for the old action heroes will increase, causing a decrease in market price. D. Demand for the old action heroes will increase, causing an increase in equilibrium quantity.
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A. Demand for the old action heroes will decrease, causing a decrease in equilibrium quantity.
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The graph shows supply and demand for a popular brand of coffee. A gas crisis affects shipping costs. What would a coffee company do in anticipation of a rise in shipping costs, and how would that effect the equilibrium price? A. Add D3 to the left of D2, showing decrease in equilibrium supply and equilibrium price. B. Add D3 to the right of D2, showing increase in equilibrium supply and equilibrium price. C. Add S2 to the left of S, showing decrease in supply and increase in equilibrium price. D. Add S2 to the right of S, showing increase in supply and equilibrium price.
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C. Add S2 to the left of S, showing decrease in supply and increase in equilibrium price.
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Lara has earned $20 mowing grass around her neighborhood. She takes her money to the bookstore and purchases a CD for $11.99. She wants to buy a book as well, but she has to choose between the hardcover for $12 and the softcover for six dollars. Lara's use of her money and the decision she makes best illustrate which two functions of money? A. Measure of value and standard B. Medium of exchange and measure of value C. Standard and store of value D. Store of value and medium of exchange
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B. Medium of exchange and measure of value
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Which situation best illustrates the basic economic questions? A. Your sister decides to make beaded bracelets and give them to friends. B. Your sister decides to make beaded bracelets and wear them all herself. C. Your sister hand beads the bracelets and sells them to neighbors D. Your sister goes to the store and purchases beaded bracelets from the jewelry department
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C. Your sister hand beads the bracelets and sells them to neighbors
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Which situation best illustrates ALL THREE of the basic economic questions? A. You start your own shirt design company and sell your services to local businesses. B. You start your own shirt design company for fun, making shirts for your friends. C. You pay a shirt design company to make shirts for you. D. You start a shirt design company using your own equipment and serve local business
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D. You start a shirt design company using your own equipment and serve local business
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Your friend wanted a big screen TV and a class ring for birthday gifts. When her mom said she could only have one, she chose the class ring. Her opportunity cost is the A. The enjoyment of having a big screen TV. B. Price of the big screen TV. C. The enjoyment of having a class ring. D. Price of the class ring.
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A. The enjoyment of having a big screen TV
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You have to choose between being in the school play or being on the baseball team because the practices overlap. This choice exemplifies that A. Time is scarce. B. Demand is scarce. C. Music lessons are scarce. D. Sports teams are scarce.
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A. Time is scarce
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A cookie costs $2 and a shirt costs $20. If your allowance is $20 and you choose to purchase a shirt, your opportunity cost is A. One cookie. B. Ten cookies. C. One shirt. D. Ten shirts.
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B. Ten cookies
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There is a shortage of milk at $1 per gallon. The equilibrium price for milk is A. $1 per gallon. B. Less than $1 per gallon. C. More than $1 per gallon. D. Not calculable.
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C. More than $1 per gallon
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On a supply and demand graph, the line that indicates quantity is A. The longest line. B. The line equal to zero. C. The x-axis. D. The y-axis
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C. The x-axis.
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Stores are overflowing with the latest car racing video game at $20. Store managers are frustrated with the lack of sales. The equilibrium price for this video game is A. More than $20. B. Less than $20. C. $20. D. Not calculable.
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B. Less than $20.
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A decrease in demand causes the demand curve to A. Shift to the left. B. Shift to the right. C. Increase its slope. D. Decrease its slope.
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A. Shift to the left
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When price decrease, quantity supplied A. Decreases. B. Increases. C. Becomes zero. D. Stays the same.
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A. Decreases
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Which may occur as a result of a decrease in the price of minivans? A. Increase in demand B. Increase in quantity demanded C. Decrease in demand D. Decrease in quantity demanded
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B. Increase in quantity demanded
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Use the graph to answer the following question Which line indicates an increase in supply? A. 1 B. 2 C. 3 D. 4
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C. 3
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Use the graph to answer the following question. Which of the following may occur as a result of a decrease in the price of cell phones? A. Shift from line 1 to line 2 B. Move from point S to point U C. Shift from line 2 to line 1 D. Move from point U to point S
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B. Move from point S to point U
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Your teacher says your history book is worth about fifty dollars. Your teacher is using money as a A. Standard. B. Store of value. C. Measure of value. D. Medium of exchange
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C. Measure of value
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The gold standard is: A. What United States paper money is "backed" by B. The weight of US paper money. C. Government stores of valuables. D. No longer in use - money is backed by public and government acceptance
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D. No longer in use - money is backed by public and government acceptance
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You chose to study for your final exam rather than go to the movies with your friends. You made the choice with the lowest? A. Demand B. Supply C. Benefit D. Opportunity Cost
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D. Opportunity Cost
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Which economic question is addressed by targeting shoppers that age from 30-40? A. What to produce? B. Where to produce? C. D. How to produce? E. For whom to produce?
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D. How to produce?
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The point where supply and demand meet is the? A. X-axis B. Y-axis C. Equilibrium D. Minimum price
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C. Equilibrium
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Can you draw a conclusion as to what will happen to the quantity supplied when the price increase? A. It will decrease. B. It will stay the same. C. It will increase. D. Nothing.
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C. It will increase
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Please analyze the following scenario paying special attention to the wording. Dominic is opening a pizzeria in which he will make pizzas from scratch as they are ordered. He is located on the boardwalk. Which of the three economic questions has he not considered? A. For whom to produce? B. How to produce? C. What to produce? D. When to produce?
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A. For whom to produce?
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What is the effect of the demand for a product or service increasing on the demand curve? A. It shifts to the right. B. It shifts to the left. C. It does not shift. D. It is deleted
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A. It shifts to the right
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Look at the graph. Where P is price and Q is quantity, what might cause a move from d to e? A. The cost of raw materials to manufacture the product increases. B. A National price celling was lifted. C. Machinery was shut down for repair. D. Minimum wage was increased.
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B. A National price celling was lifted
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The supply and demand curves reflect the availability and cost of a smart phone. If the smart phone market is currently at Demand and Supply, which change to the graph, would have to occur to increase equilibrium price while lowering equilibrium quantity? A. Add Demand 1 to left of Demand B. Add Demand 1 to right of Demand C. Add Supply 2 to left of Supply D. Add Supply 2 to right of Supply
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C. Add Supply 2 to left of Supply
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Jen has a twenty dollar bill in her pocket but she needs change. Shea gives her ten dollars bill, a five dollar bill and four ones and four quarters. Jen takes the one dollar to buy some chips from the vending machine. Which characteristics of money has Jen best demonstrated? A. Medium, scarcity, and value B. Scarcity, and stability of value, divisibility C. Durability, portability, standard D. Acceptability, divisibility, and portability
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D. Acceptability, divisibility, and portability
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After working very hard at your after school job you have been managed to save $1000! you can invest your money into the stock market or you can spend your money on your trip this summer with your friends. If you decide to invest your money into the stock market, what is your opportunity cost? A. $1000 B. Going to college C. Investing in the stock market D. Going to a trip with your friends
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D. Going to a trip with your friends
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The new iPhone has come out and is better than ever. All of your friends have a new phone and it makes you want a new iPhone that much more. Which part of TRIBE is impacted in this example? A. Taste and preferences B. Related goods C. Income D. Buyers in the market
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A. Taste and preferences
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Interpret the graph below for Kookies cookies and pick an explanation as to why the line shifts because of ROTTEN. A. Minimum wage increase to $10 an hour resulting in the cost to produce Kookies cookies to increase B. Next week is cookie appreciation week people come from all over to purchase Kookie cookies C. For every Kookie cookie produce a $1 tax must be paid to the government D. The oven used to produce Kookie cookies broke
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B. Next week is cookie appreciation week people come from all over to purchase Kookie cookies
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Aaron heads to the store on a Wednesday to purchase the latest book in a series he enjoys. He doesn't get paid again until Friday, and uses the last 20 dollars he has to pay for the book, which costs 15 dollars. When he hands the cashier the 20 dollar bill, she inspects it with her counterfeit marker, determines it is a real bill, and then gives Aaron back his 5 dollars in change. Which characteristics of money are best demonstrated in Aaron's scenario? A. Scarcity, acceptability, and divisibility B. Medium, value, store C. Divisibility, stability, portability D. Standard, durability, scarcity
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A. Scarcity, acceptability, and divisibility
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Louise wants to go to the Imagine Dragons concert next Saturday but her sister reminds her it is also their dad's birthday that day. Which of these is an opportunity cost of Louise choosing to spend her dad's birthday with him? A. Her dad will be disappointed B. She will save the cost of buying her dad a present C. Enjoying the Imagine Dragons concert D. The price of the Imagine Dragons ticket 38.
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C. Enjoying the Imagine Dragons concert
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Use the equilibrium graph to help answer the question. Which situation would cause a shift from line 4 to line 3? A. A decrease in the cost of rubber to make the soles B. A factory worker strike C. A decrease in the price of Nikes D. Kobe Bryant creating his own line of shoes
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A. A decrease in the cost of rubber to make the soles
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Mark has been given an invite by friends to attend the opening night of a movie but has also received tickets to the upcoming football game on the same night, creating a dilemma as to which event to attend. From this scenario, distinguish what is the scarcity most likely creating the dilemma Mark is currently facing? A. The choices B. Location C. Time D. Number of friend
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C. Time
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Mark has been given an invite by friends to attend the opening night of a movie but has also received tickets to the upcoming football game on the same night, creating a dilemma as to which event to attend. In assessing the scenario above, Mark's opportunity cost for choosing the football game would be? A. Cost of food B. Going to the football game C. Time spent D. Going to the movie
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D. Going to the movie
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Kalli has increased the sales of her jewelry business since setting up an online website for people to shop from. With Valentine's Day coming up, Kalli has decided to introduce a new line heart shaped necklaces and charms. Within weeks her profits have increased by 20%. In analyzing the scenario, what type of graph would best display Kalli's choice to introduce a new line of product? A. Demand B. Supply C. Marginal Cost and Revenue D. PPC
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A. Demand
