Econ Final Exam with correct answers 2024.

Which of the following is an example of using physical capital to save time and money? - answer-Building extra space in a factory to simplify production. Every decision involves tradeoffs because what? - answer-Everyone's resources are limited Production possibilities curve shows the relationship between the production of... - answer-Any two categories of goods An economy that is producing the maximum amount of goods and services is considered... - answer-Efficient A music store holds a one day half price sale on all CDs, consumers react to the sale by buying more CDs than on a typical day, this action is an example of what? - answer-Law of Demand The graph shows how many schools and new roads the city can build by using all of its factor resources, what does the production possibilities curve show? - answer-As the number of schools increase, roads decrease A regions production possibilities curve might show underutilization of resources if the region experienced what? - answer-A large flood Which of the following is an example of a firm trying to increase its human capital? - answer-Paying for employees' education The community of Desertville traditionally produces a large number of tires and a small amount of kiwi fruit, kiwi's are becoming increasingly popular. Desertville has decided to expand kiwi cultivation and decrease tire manufacturing, according to the law of increasing costs... - answer-Opportunity cost of producing kiwi's will increase Each society answers the three basic economic questions based on what? - answer-Its unique combination of values and goals Which of the following best describes the physical flow from households to firms? - answer-Labor and land Money flowing to the government from firms and households in a mixed economy is what? - answer-Taxes Which of the following is a summary of the basic economic questions? - answer-What goods and services should be produced, how and for whom? Which of the following is a main incentive for manufacturers to sell a product? - answer-Making a profit on sales A country is changing from a centrally planned economy to a free market economy, what will be one difficulty for citizens in this country? - answer-Workers will lose job security and guaranteed income What is considered a negative effect of government regulation? - answer-It is expensive for businesses to follow all the rules You read an article in a news magazine that explains how the economy expanded for several years, then went in to a period of contraction, what is the main subject of this article? - answer-The business cycle Jeff and Margret qualify for section eight housing, a subsidized housing program administered by the federal government, what kind of benefit are they receiving? - answer-In-kind Which of the following is a characteristic of a public good? - answer-Its shared by public but is provided by the government How can the demand for one good be effected by increased demand for another one? - answer-If goods are used together, increased demand for one increases demand for the other Economists say that demand curve is accurate only as long as the ceteris paribus assumption is true, means that what? - answer-All things other than price hold constant Businesses often use information such as age, income and occupation to sell products to certain groups of people, this technique is called what? - answer-Demographics Price of cranberry juice suddenly increases and as a result Glenda begins drinking more Grape juice, which is less expensive but tastes just as good to her, in this case Glenda's elastic demand is due to? - answer-Availability of substitutes The store owners notice that demand for all types of bread has been dropping steadily over the past year, while price changed very little, what two conditions might you be seeing? - answer-A change in demand due to a popular low carb diet A supply schedule is characterized by which of the following? - answer-It lists supply for a specific good Marginal cost becomes higher than price, what happens to a company? - answer-Company will lose money on each additional unit produced How does specialization effect production? - answer-It makes workers more efficient What is one reason the US government regulates car manufacturing? - answer-To offset the pollution caused by cars Gerda owns a grocery store, when decreasing prices force her to cut costs, one of the first things she does is? - answer-Decrease hours for workers A supplier who has no control over the market price, reports the marginal revenue of a product is $10, that means that what? - answer-Consumers pay a market price of $10 per unit Big Publisher Inc. is considering using email instead of shipping printed materials to its long distance workers, how will this move effect Big Publisher Inc.? - answer-It should lower costs and increase supply A guitar maker builds 10 guitars per month, his total cost are $3000 per month, what is the average cost of each guitar? - answer-$300 Eleana is looking for an apartment, which of the following is an example of her search cost? - answer-Eleana misses two days of work at the supermarket Which traffic signal best shows what an SUV manufacturer should do when prices go down? - answer-Red light; produce fewer SUVs Which of the following are factors of production? - answer-Capital and land If you choose between two summer jobs, the one you do not choose is the what of your decision? - answer-Opportunity Cost What information is needed to make a decision at the margin? - answer-Cost to produce each unit Which of the following is an example of a shortage? - answer-A type of doll is not available because a limited number were made When a theater owner considers whether to install another row of seating, she is what? - answer-Thinking at the margin Which of the following is the kind of decision that can be made at the margin? - answer-Whether or not to hire new workers A nations automakers install new robotic machinery to build cars as a result cars only take a day to make and the factories can produce many more cars than before, this is an example of growth caused by what? - answer-Technology Human capital includes what? - answer-The knowledge a taxi driver has of the city streets Which of the following best describes the economy of the United States? - answer-Mixed, but more like a free market Jed has one hour available after school each work day, the rest of the afternoon is taken up by other activities, he is evaluating what to do with those five hours, according to the chart, which option has the least benefit? - answer-Working 1 hour How does a society determine who will get what is produced? - answer-By its distribution of income A town votes to raise taxes on its households and businesses in order to renovate a school in one of its poorest neighborhoods, what societal goal best explains this decision? - answer-Equity What is the circular flow of a market economy show? - answer-How households and firms exchange money, products, and services What is one advantage to a centrally planned economy? - answer-Low unemployment due to guaranteed jobs What basic principles are fundamental to American Free Enterprise? - answer-Open opportunity, private property, contracts, and voluntary exchange Which are the governments three goals for promoting economic strength? - answer-High employment, steady growth and stability Each payday some of your pay is withheld as payroll deduction for social security, what happens to the money that is withheld? - answer-It is redistributed as cash transfers to retired and disabled people Which is an example of the law of demand at work? - answer-Demand for pizza rises when price of pizza falls How can expectations about the future change consumer behavior? - answer-Immediate demand for a good will rise if its price is expected to rise How does a persons perception of a good as a necessity or luxury affect his or her purchase of it? - answer-A good that is perceived as a need will be purchased even if price increases You will still be able to get a public broadcasting channel even though you did not contribute to its fundraising campaign this is an example of what? - answer-A free rider problem The substitution effect and the income effect describe what? - answer-Factors that influence consumer buying choices Owners of digital cameras have to buy memory cards in order to use the cameras, cameras and memory cards are what? - answer-Complements Due to an increase in her rent, Isa needs to cut back her spending on other items, which of the following type of goods will she consume less of? - answer-Normal goods When the price of a product goes down, what happens? - answer-Some producers produce less, others drop out of the market When would it make sense for a factory that is losing money to remain in operation? - answer-If the total revenue from the goods being produced exceeds the operating cost How is profit determined? - answer-Total revenue minus total cost How does new technology generally effect production? - answer-It lowers cost and increases supply Fixed cost would include what? - answer-Rent A sports equipment company increases production of volleyballs, it costs the company $4.00 to make ten volleyballs and $4.10 go make eleven volleyballs, this $0.10 difference is an example of what? - answer-Marginal Cost A hot summer causes demand for ice cream to go up, what happens next? - answer-Ice cream makers raise the price of ice cream Suppose the market for a magazine is in equilibrium, some students insist on raising the cover price by $1.00 and printing the same quantity, what is likely to happen? - answer-There will be a surplus of 100 Why do fads often lead to shortages, at least in the short term? - answer-Demand increases too quickly and unexpectedly for the supply to keep up Which kind of goods do governments generally place price ceilings on? - answer-Goods that are basic needs and some people cannot afford What will happen to price, supply and demand when there is surplus of a product? - answer-Price and supply will fall, demand will rise Barbra Brown has ten dairy cows her cost to feed the cows go up, although milk production remains the same, what effect will this rise in cost have on her supply? - answer-None What is the difference between a shortage and scarcity? - answer-A shortage can be temporary or long term, but scarcity always exists The economic concept of "guns or butter" means that what? - answer-A government must decide to produce more or less military or consumer goods Increasing the number of laborers in an economy generally causes what? - answer-Increase in the production possibilities curve What happens when workers are laid off? - answer-Underutilization Price of home computer rises, according to the law of supply manufacturers will respond to this price increase by doing what? - answer-Increasing computer production The future production possibilities frontier on this graph shows that what might happen if...? - answer-The cost of building materials went down You bought two new CDs with the last $30 in your checking account, your next payday is on Monday, what is the opportunity cost of these CDs? - answer-The night out with your friends that you miss because you can't afford it now What can a decision making grid do? - answer-Help you determine some of the opportunity cost for your decision The ways in which factors of production are combined determines the answer to which economic question? - answer-How will goods be produced? How does specialization benefit an economy? - answer-It makes production more efficient Physical capital used by a woodworker would include what? - answer-Saws & Drills What is the expression "the customer is king" mean in a free market economy? - answer-Customers have the power to decide what gets produced? An economy in which all of the boys become farmers when they are adults, just as their fathers and grandfathers did, is an example of what type of economy? - answer-Traditional Economy What happens in the product market? - answer-Households purchase goods and services firm produced Which of the following might a government provide as part of a safety for citizens? - answer-Unemployment Compensation A new runway has opened at the airport, citizens complain to local officials that the noise of the airplanes is disturbing the neighborhood, this is an example of a what? - answer-Negative Externality Private Company Big Road Incorporated is put in charge of building and running a states entire road system, that company charges high fees to use its road and only maintains them in heavily populated areas, Big Road is an example of what? - answer-Market Failure Why does an economist create a market demand schedule? - answer-To predict how people will change their buying habits when price changes What does it mean when you have demand for a good or service? - answer-You are willing and able to buy the good or service at the given price What can cause an entire demand curve to shift? - answer-Change in demographics John gets a raise and decides to start buying enriched pasta instead of cheaper instant noodles, to John instant noodles are an example of what? - answer-Inferior goods Bruce likes to chew one piece of sugarless gum each day, the cost of gum is only a tiny fraction of his weekly budget, the company that makes his favorite gum doubles the price in response Bruce probably will do what? - answer-Pay the doubled cost A restaurant owner has not changed menu prices in a year. One month ago, the owner noticed that sales for all lunch items had fallen by 50 percent. Which of the following most likely caused the demand curve to shift? - answer-A nearby factory shut down A graph of the information in a supply schedule creates which of the following? - answer-Supply Curve How is the total cost of a factory or other production site determined? - answer-Fixed costs plus variable costs What effect do rising input costs have on the price of a good? - answer-The good becomes more expensive to produce When the eighth worker is hired the marginal product of labor becomes negative this is because what? - answer-There are more workers than are needed, disturbing output Which of these events would indicate a movement along the supply curve for batteries? - answer-Battery manufacturers raise prices of package A steel mill has fixed costs of $100 per hour and variable costs of $50 per hour. What will happen to these costs if the mill closes? - answer-Variable costs will drop to zero, but fixed will stay the same Gerda owns a grocery store. Increasing prices make her willing to supply more. What is the first thing she does? - answer-Have people work more hours Use the graph below to answer the question, students are publishing an annual literary magazine at their school, how many copies should they print and what price should they charge for each copy? - answer-200 copies at $4.00 each Which newspaper headline will most likely shift the demand curve for flu shots to the right? - answer-Health experts predict severe fly season ahead