Economics review

1
Economics review For Final 2006
2

• The most risk free way to earn a return
• on money is to
• buy a commodity
• invest in stock
• c. deposit in a savings account
• d. invest in real estate

3
Which of the following is NOT a capital good? a.
a bulldozer at a construction site b. a cash
register at a clothing store c. an oven at a
bakery d. a television for sale in an appliance
store
4
What protection does OSHA give to people in the
US? a. Regulations on workplace safety and
information about hazards in the
workplace b. Consumer protection in buying
food c. Regulations about clean environoment d.
Protection for certain key industries such as
logging
5
The supply curve is a. upward sloping b.
downward sloping c. level d. irregular
6

• Stocks that pay few or no dividends but gain
• in value are called
• income stock
• b. growth stock
• c. futures stock
• d. venture stock

7
The sale of stock is regulated by the a. labor
unions b. stockbrokers c. Securities and
Exchange Commission d. Chamber of Commerce
8
Which of the following is not a resource for
production a. government b. land c.
labor d. capital
9
The FED is owned by a. member banks b. the
federal government c. national banks d. American
banks
10
Corporations a. account for less than 10 of
total sales in the nation b. account for
about 90 of total sales in the nation c.
account for nearly 70 of the business
organizations in the nation d. account for the
most business organizations the most sales
in the nation
11

• From the business viewpoint, one advantage of
• a corporation is that
• the corporations management is separated
• from its ownership
• b. stocks are issued and bonds are sold to
• raise capital
• c. the decision-making process is slow
• d. liabililty is limited

12

• The three most common types of business
• orgnaizations are
• sole proprietorship, partnership, and
• monopolies
• b. nonprofit organizations, partnership, and
• corporations
• c. sole proprietorship, partnerships, and
• corporations
• d. sole proprietorship, franchise, and
  cooperatives

13
Which of the following is an example of a
good? a. a car b. a tune-up c. a car
wash d. an oil change
14
What term refers to the value of a trade-off? a.
production possibility b. opportunity
costs c. choice d. frontier
15

• The rate of interest that banks charge on loans
• to their best business customers is called the
• Prime rate
• b. Discount rate
• c. Reserve rate
• d. Adjustable rate

16
Credit Unions are NOT a. owned by members b.
use their savings accounts to supply low-cost
loans to members c. operated by members d. offer
lower interest rates on savings and higher
interest rates on loans than banks
17

• Corporate combinations can increase
• competition
• b. efficiency
• c. costs
• d. employment

18
An advantage of being a shareholder in a
corporation is having a. a seat on the Board
of Directors b. a voice in open-market
operations c. control of labor costs d. limited
liability determined by the number of shares
held
19
The key to trade is a. being versatile b.
bartering c. specialization d. being flexible
20
What is the most effective way for consumers to
make their desires known to business? a. through
mail and phone surveys b. by protesting and
boycotting products c. by the purchases they
make d. by hiring lobbyists and joining consumer
groups
21
A person who consumes a good or service but does
not pay for it is called which of the following?
a. free rider b. A volunteer user c. A
private consumer d. a entrepreneur
22
Which of the following is a private organization
that attempts to influence public officials to
act or vote in ways that benefit the group
members? a. market research group b. free
enterprise group c. public policy group d.
interest group
23
An Entrepreneur does NOT a. attempt to start a
new business b. attempt to introduce a new
product c. risk failure for financial gain d.
have absolute control over the resources
24
A PPF Curve Does Not a. show the possible
combinations of two products b. measure
production combinations in terms of
opportunity costs c. assumes that the amount of
available resources will change with time d.
assumes that resources and technology are
being used most efficiently
25
All are the following are types of economies
EXCEPT a. Private b. Command c.
Traditional d. Market
26
The seven members of the Fed Board is
appointed a. Congress b. The Supreme
Court c. The President d. State governors
27
Stocks that pay few or no dividends but gain in
value are called a. income stock b. growth
stock c. futures stock d. venture stock
28
What does the Temporary Assistance for Needy
Families program provide? a. retirement income
for elderly b. cash to the states to help run
their welfare programs c. compensation to
all who lose their jobs d. cash to workers
injured on the job
29
Why does the government use its powers to
make sure the businesses disclose so much
information to the public? a. to make buyers
more knowledgable and safe b. to make it hard for
businesseses to make an excess profit c. to
make it easier for consumers to save money d. to
make it easy for businesses to have good
information
30
A firm that builds plants in foreign countries
in which it has business is called a (n) a.
multinational corporation b. national
corporation c. foreign corporation d.
interdependent corporation
31
Each of the following is true of the OTC market
except a. brokers consult NASDAQ to find
current prices b. stocks traded are sometimes
called unlisted stocks c. stocks of many
smaller corporations are often traded d.
most OTC trading is done at the NYSE
32

• What is meant by the phrase (markets talk)?
• markets changes are written about in
• newspapers and magazines
• b. government officials base decisions on the
• stock market
• c. business people rely on good communication
• to conduct business
• d. markets reflect the thoughts and feelings
• of buyers and sellers

33
Which of the following is an example of a
public good? a. a restaurant on Main Street b. a
bill board advertising the restaurant c. Main
Street d. The parking lot for the restaurant
34
A special tax on gasoling is probably a (n) a.
Excise tax b. Estate tax c. User fee d.
Customs duty
35

• Which of the following is a critical rule for
• determining whether someothing is a public good?
• the benefit to each individual who uses the
• facility is greater than the cost
• b. the benefits of the facility are greater
• for the society than for the individuals
  using it
• c. the totla benefitsto society are greater
• than the total cost
• d. the total cost is small for each individual
• taxpayer

36
What is the term for the total value of all goods
and services produced in a particular
country? a. net worth b. open market value c.
gross domestic product d. standard of living
37
What best describes the role of the government
in a free enterprise system? a. control business
activities b. decide what companies will be
formed and then allow the mangers to run
them c. allow individuals to operate businesses
in ways that they think will maximize their
profits d. require companies to disclose
information to consumers
38
Because checks are payable on demand, checking
accounts are often called a. demand
deposits b. command deposits c. instant
deposits d. note deposits
39

• What is a positive externality?
• a way to trade that will benefit people who are
• form other countries
• b. an economic side effect that generates
• unexpected benefits
• c. a cash flow that will benefit both the
• government and the business
• d. an extra payment to welfare recipients

40
Productivity refers to a. the process of
creating goods services b. the use of the four
factors of production c. the efficient use of
productive resources d. the specialization of
productive inputs
41
Which of the following is NOT and example of a
public good? a. Shopping malls b. National
parks c. Highways d. Municipal libraries
42
Banks that belong to the FED a. hold stock in
the FED, therefore own it b. receive no
dividends c. are owned by the federal
government d. are independent of any regulations
43
Which of the following is an example of a
service? a. Hair spray b. Haircut c.
Scissors d. Blow dryer
44
American classify US wheat shipped to Japan
as a. export b. import c. embargo d. trade
barrier
45
The largest stock exchange in the World is the
a. NYSE b. AMEX c. Tokyo d. NASDAQ
46
Which of the following are substitute goods? a.
flashlight and batteries b. shoes socks c.
ink pen for a pencil d. pencil and paper
47
Owners of stock are protected from some risk
because they have a. unlimited
liability c. split liabililty b.
limited liability d. capital liability
48
Which is NOT a characteristic of Capitalism

• closest to the pure-market model
• individuals own and control almost all factors
  of production
• government intervention is limited
• d. profits are limited

49
The Demand curve is always a. downward
sloping c. level b. upward sloping d.
irregular
50
What is the least common business
organization in the United States?    A.
sole proprietorship C. corporation B.  
partnership D. limited partnership
51
The owner of shares in a corporation is a a.
proprietor b. stockholder c. partner d.
manager
52
What is the single largest soure of revenue for
the federal government? a. corporate income
tax c. individual income tax b. FICA d. user
fee  
53
The benefit received principle of taxation
states that A. taxes benefit the economy as a
whole B. those who benefit from government
services should pay for them C. people should
be taxed according to their ability to pay D.
the govenment should assess taxes only if there
is a clear benefit to doing so
54
An example of a proportional tax is a. Income
tax b. Sales tax c. Excise tax
d. Social Security
55
A recurring theme in economics is
A. people have unlimited wants in the face of
limited resources B. there are unlimited
resources C. our country is rich, we just
dont realize it D. people have limited
wants in the face of limited resources
56
Churches and schools are considered to be
a. Service corporations b. Nonprofit
corporations c. Service Co-op d.
Horizontal corporations
57
A certificate used by a corporation that is
money borrowed from investors is called a.
corporate bond c. common stock b. preferred
stock d. market share
58
A round lot means shares are sold in amounts
of a. 1 b. 10 c. 100 d. 1000
59
All of the following are examples of fixed costs
EXCEPT a. depreciation c. electricity b.
rent d. wages for labor  
60
An investor who sells stock at a price lower than
the purchase price incurs a a. capital
split c. capital loss b. capital gain d.
capital windfall
61
Which of the following is NOT characterisitc of
the corporate form of orgnaization? a.
proxy c. limited life b.
unlimited liability d. board of directors
62
A demand curve shows that A. more will be
purchased at low prices than at high prices bB.
less will be purchased at low prices than at high
prices cC. approximately the same amount will be
purchased at low prices than at higher prices dD.
all people have the ability, desire and
willingness to pay
63
What effect does new technology usually have on
an economy? a. it makes the economy stronger and
more efficient b. it reduces the dependence of
the eocnomy on business c. it slows an economy
down for at least a while d. it reduces the
available jobs
64
How do consumers exercise their power in the
American economy? A. by deciding what to
purchase BB. by working for business C. by
becoming entrepreneurs D. by saving their money
65
What is the one benefit provided by Social
Security? A. medical care for the
indigent b. B. cash transfers to workers injured
on the job c. C. compensation for all who lose
jobs D. retirement income for the elderly
66
All of the following are characteristics of a
free enterprise economy EXCEPT a. Economic
freedom c. volunatry exchange b. governmental
control d. private property
67
The most risk free way to earn a return on money
is to a. buy a commodity b. deposit in a
savings account c. invest in stock d. invest in
real estate

68
The 2 largest sources of revenue for states
are A. Sales tax and intergovernmental
revenue B. Property tax and sales tax
C. Income tax and intergovernmental revenue S
D. Property tax and excise tax
69
All of the following are major types of
cooperatives EXCEPT a. consumer c.
producer b. government d. service
70

• Roads, bridges, harbors, airports and other
  transportation facilities make up
• economic infrastructurec
• economic prosperity
• c. economic interstructure
• d. economic futures market

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What type of economic institution engages in
collective bargaining? a. labor unions b.
producer cooperatives c. nonprofit
orgaizations d. chamber of commerce  
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Prices are a.      A.determined by
consumers b.      B.determined to provide the
producer with maximum profits c.      C.always
fixed d.      D.links between producers and
consumers