ECON 1500 State Test Final Exam 2025
With 100% Correct Answers
Why are international trad restrictions put into place? A) create higher taxes for consumers
B)encourage trade between nations C) protect domestic industries from foreign competition D)
supply foreign countries w/ fewer goods + services - CORRECT ANSWER✔✔C
A large computer chip manufacturer opens a warehouse in Hot Springs, SD. How will this affect
the local population? A) increased marginal cost B) improved comparative advantage C) increase
trade barriers D) improved standard of living - CORRECT ANSWER✔✔D
What term is used to best describe an increase in the price level of a product or service in an
economy? A) inflation B) devaluation C) recession D) stagflation - CORRECT ANSWER✔✔A
What is the exchange of goods + services without using money? A) foreign exchange B)
exchange money C) barter D) tender - CORRECT ANSWER✔✔C
What kind of impact will more education have on a worker in a high skilled, high demand
career? A) decrease in wages B) increases in wages C) increase in opportunity cost D) decrease
in return on investment - CORRECT ANSWER✔✔B
What is fiscal policy? A) changing in gov spending and taxation to influence economic activity B)
changing of trade policies to influence economic activity C) changing of open market operations
to influence economic activity D) changing of the discount rate to influence economic activity -
CORRECT ANSWER✔✔A
What term best describes a situation when a country produces a good or service for a lower
opportunity cost than other countries? A) comparative advantage B) absolute advantage C)
unintended consequences D) production possibilities - CORRECT ANSWER✔✔A
, What is "profit motive" or incentive in a market economy? A) business should be limited as to
how much profit it can earn B) businesses act in their own best interest and the whole economy
benefits C) individuals and businesses should not be allowed to own private property D)
competition is not good in a market economy - CORRECT ANSWER✔✔B
What is a threat to a nations economic stability? A) consumerism B) fiscal policy C) monetary
policy D) inflation - CORRECT ANSWER✔✔D
What is the impact in tariff and quotas over time? A) discourages imports B) encourages exports
C) discourages smuggling D) encourages imports - CORRECT ANSWER✔✔A
Sharon + Kelly are considering reopening shopping services for elderly people in their town.
Which type of business organization can they form to protect against personal liability? A)
corporation B) cooperative C) general partnership D) sole proprietorship - CORRECT
ANSWER✔✔A
What is the total amount of a good or service that producers are willing to make available to
consumers? A) demand B) shortage C) supply D) surplus - CORRECT ANSWER✔✔C
A hurricane rips through Florida and destroys most of this years lemon crop, decreasing
production of fresh lemonade. Which of the following predicts hoe this will affect the supply or
demand of lemonade? A) Demand curve shifts to the right B) demand curve shifts to the left C)
supply curve shifts to the right D) supply curve shifts to the left - CORRECT ANSWER✔✔D
What happens when a new firm enters the market? A) market supply curve will shift to the right
B) profits of existing firms will increase C) some existing firms must leave the market D) market
demand curve will shift to the right - CORRECT ANSWER✔✔A
With 100% Correct Answers
Why are international trad restrictions put into place? A) create higher taxes for consumers
B)encourage trade between nations C) protect domestic industries from foreign competition D)
supply foreign countries w/ fewer goods + services - CORRECT ANSWER✔✔C
A large computer chip manufacturer opens a warehouse in Hot Springs, SD. How will this affect
the local population? A) increased marginal cost B) improved comparative advantage C) increase
trade barriers D) improved standard of living - CORRECT ANSWER✔✔D
What term is used to best describe an increase in the price level of a product or service in an
economy? A) inflation B) devaluation C) recession D) stagflation - CORRECT ANSWER✔✔A
What is the exchange of goods + services without using money? A) foreign exchange B)
exchange money C) barter D) tender - CORRECT ANSWER✔✔C
What kind of impact will more education have on a worker in a high skilled, high demand
career? A) decrease in wages B) increases in wages C) increase in opportunity cost D) decrease
in return on investment - CORRECT ANSWER✔✔B
What is fiscal policy? A) changing in gov spending and taxation to influence economic activity B)
changing of trade policies to influence economic activity C) changing of open market operations
to influence economic activity D) changing of the discount rate to influence economic activity -
CORRECT ANSWER✔✔A
What term best describes a situation when a country produces a good or service for a lower
opportunity cost than other countries? A) comparative advantage B) absolute advantage C)
unintended consequences D) production possibilities - CORRECT ANSWER✔✔A
, What is "profit motive" or incentive in a market economy? A) business should be limited as to
how much profit it can earn B) businesses act in their own best interest and the whole economy
benefits C) individuals and businesses should not be allowed to own private property D)
competition is not good in a market economy - CORRECT ANSWER✔✔B
What is a threat to a nations economic stability? A) consumerism B) fiscal policy C) monetary
policy D) inflation - CORRECT ANSWER✔✔D
What is the impact in tariff and quotas over time? A) discourages imports B) encourages exports
C) discourages smuggling D) encourages imports - CORRECT ANSWER✔✔A
Sharon + Kelly are considering reopening shopping services for elderly people in their town.
Which type of business organization can they form to protect against personal liability? A)
corporation B) cooperative C) general partnership D) sole proprietorship - CORRECT
ANSWER✔✔A
What is the total amount of a good or service that producers are willing to make available to
consumers? A) demand B) shortage C) supply D) surplus - CORRECT ANSWER✔✔C
A hurricane rips through Florida and destroys most of this years lemon crop, decreasing
production of fresh lemonade. Which of the following predicts hoe this will affect the supply or
demand of lemonade? A) Demand curve shifts to the right B) demand curve shifts to the left C)
supply curve shifts to the right D) supply curve shifts to the left - CORRECT ANSWER✔✔D
What happens when a new firm enters the market? A) market supply curve will shift to the right
B) profits of existing firms will increase C) some existing firms must leave the market D) market
demand curve will shift to the right - CORRECT ANSWER✔✔A
