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The situation in which some necessities have little value while some non-necessities have a much higher value is known as
a. paradox of value. c. trade-offs.
b. opportunity cost. d. economic interdependence.

a

Manufactured goods needed to produce other goods and services are called
a. nondurable goods. c. Gross Domestic Product (GDP).
b. capital goods. d. consumer goods.

b

To arrive at an economic decision, a decision-making grid may be used to evaluate
a. productivity. c. alternative choices of action.
b. only durable goods. d. only capital goods

c

Division of labor is a characteristic of
a. home craft businesses. c. classroom education.
b. assembly line production. d. entrepreneurship.

b

The dollar value of all final goods and services and the most comprehensive measure of a country's total production output is
a. its standard of living. c. a cost benefit analysis.
b. financial capital. d. Gross Domestic Product (GDP).

d

A popular model used to illustrate the concept of opportunity cost is
a. the production possibilities frontier. c. the paradox of value.
b. entrepreneurship. d. the factors of production.

a

An economy at its production possibility frontier is operating
a. with slow economic growth. c. without division of labor.
b. at full potential. d. as a free enterprise economy.

b

The money used to buy the tools and equipment needed for production is known as
a. capital goods. c. financial capital.
b. the factors of production. d. wealth.

c

Actions in one part of the country or world that have an economic impact on what happens elsewhere are examples of
a. opportunity costs. c. specialization.
b. trade-offs. d. economic interdependence.

d

An example of a market economy is
a. the Inuit. c. the United States.
b. the former Soviet Union. d. North Korea.

c

Which of the following is NOT considered an economic and social goal?
a. economic efficiency c. price stability
b. economic growth d. entrepreneurship

d

The United States can best be described as having a
a. modified private enterprise system. c. command economy.
b. traditional system. d. pure free enterprise system.

a

All of the following are characteristic of a command economy EXCEPT
a. it can change directions drastically in a brief period of time.
b. there is much uncertainty.
c. it is not designed to meet the wants of consumers.
d. is provides workers with few incentives to work hard.

b

The government's role in a mixed economy is that it is the
a. definer of goals.
b. central planner.
c. regulator charged with preserving competition.
d. coordinator of basic economic activity.

c

Unlike a general partnership, in a limited partnership
a. all partners share equal financial responsibility for the firm's decisions.
b. the inactive partner has limited liability for the business's debts.
c. the partners must pay special business taxes.
d. the business does not end with the death of a partner.

b

A merger of corporations involved in different steps of manufacturing or marketing is known as a
a. multinational merger. c. vertical merger.
b. horizontal merger. d. conglomerate.

c

The local chamber of commerce works to
a. promote the welfare of its members and the community.
b. earn dividends for members.
c. protect its members from consumer complaints.
d. aid member companies in negotiating with labor unions.

a

In a general partnership,
a. the business continues even if one partner dies.
b. partners must pay specific business taxes.
c. partners usually draw up legal papers called articles of partnership.
d. partners are only liable for the business's debt up to the amount of their investment.

c

An advantage of a corporation is that
a. owners pay fewer taxes than owners of other forms of business.
b. the business is subject to little government regulation.
c. owners have limited liability for debt.
d. owners have direct and immediate control over daily management of the business.

c

Which of the following is NOT a nonprofit organization?
a. multinational c. chamber of commerce
b. producer cooperative d. labor union

a

The concept of voluntary exchange means? a. neither buyer nor seller has made a profit b. people freely and willingly engage in market transactions c. only workers will benefit from the exchange d. that no money was exchange

b

which group of people ultimately determines the products taht a free enterprise economy produces? a. congress b. consumers c. local government d. property owners

b

Joseph Stalin demonstrated the main advantage of a command system by? a. increasing industrial output b. eliminating shortages c. introducing the new economic policy d. increasing the standard of living

a

In 1917, the existing government of Russia was overthrown by a. Vladimir Ilyich Lenin b. Joseph Stalin c. Karl Marx d. Mihail Gorachev

a

An increase in the price of milk causes a decrease in the demand for cereal. The two products are a. demand elastic b. complements c. unrelated d. substitutes

b

Advertising, fashion trends, and new product introductions serve to a. increase income effectiveness b. create consumer demand c. minimize the income effect d. create consumer needs

b

consumers' willingness to replace a costly item with a less costly item is an example of a. demand elasticity b. the income effect c. complements d. the substitution effect

d

When producers offer fewer products for sale at each and every price, a. the supply curve has shifted to the right b. they expect subsidies c. the supply curve has shifted to the left d. the price per unit decreases

c

The supply of a product normally decreases if a. the cost of inputs goes down c. the price of the product increases b. taxes on the product increases d. more producers enter the market

b

All of the following can change the market supply curve except a. a change in the demand for the product b. the expectation that prices are about to increase c. the numbers of sellers offering the product d. the cost of labor

a

Deficiency payments are part of a federal program to assist a. college students b. senior citizens c. consumers d. farmers

d

The federal minimum wage law demonstrates a. the fuction of equilibrium price in a competitive market b. a societal choice for economice equity over efficiency c. government intervention to ensure the equilibrium price d. market equilibrium

b

The sherman Antitrust act a. outlawed restraints and monopolies that hindered trade b. nationalized the railroads c. established the FDA d. applied only to banking

a

The government is involved in the U.S economy for all of teh following reasons EXCEPT to a. promote and encourage competition b. prevent monopolies that deny the public the benefits of competition c. regulate industries in which a monopoly is in the public interest d. promote the development of market externalities

d

The Clayton Antitrust Act a. was opposed by labor unions b. outlawed price discrimination c. defended monopolies d. never went into effect

b

Money loses its value when it a. becomes too portable c. is durable b. becomes too plentiful d. is divisible

b

Local banks in the 1800s that printed too mcuh money were called a. treasuries b. national banks c. central banks d. wildcat banks

d

The Federal Reserve a. is made up of 12 districts banks and 25 branch banks b. is made up of district banks taht operate independently from one another. c. is managed by a 12-member board of directors d. was esatblished in 1930s

a

The Fed's Federal Open market Committee a. advises the Fed on the overall health of the economy b. regulates savings and loan associations, saving banks, and credit unions c. advises the Fed on consumer credit laws d. is the Fed's primary monetary policymaking body

d

Which group decides whether to raise or lower interest rates? a. Federal Open Market Committee b. Board of Governors c. Federal Advisory Counsil d. Federal Reserve banks

a

the president of the U.S appoints members of which group on the Federal reserve organization chart? a. Federal Open Market Committee b. Board of Governors c. Federal Advisory Council d. Federal Reserve Banks

b

Members of which group on the Federal Reserve organization chart must buy stock in a Federal Reserve Bank? a. Federal Open Market Committee b. Board of Governors c. Federal Advisory Council d. Member Banks

d

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