Economics: EOCT Practice Game

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Economics EOCT Practice Game
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Economics may best be defined as aa) study of
efforts to satisfy seemingly unlimited wants with
scarce resourcesb) branch of sociologyc)
scientific study of supply and demandd) limited
description of economic activities
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Three basic economic questions area) What?,
How?, and When?b) What?, How?, and For
Whom?c) What?, Where?, and When?d) Why?,
What?, and How?
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A popular model used to illustrate the concept of
opportunity cost is calleda) entrepreneurshipb
) factors of productionc) laissez-faired) the
production possibilities frontier
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A basic requirement for survival is aa)
needb) opportunity costc) wantd) factors of
production
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Land, labor, capital, and entrepreneurship are
thea) results of supply and demandb) basis of
employmentc) results of productiond) factors
of production
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An economy operating at its production
possibility frontier is operatinga) with high
unemploymentb) with minimum growthc) at full
potentiald) on quota-filling production
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A risk-taker in search of profits is called
a(n)a) economistb) conspicuous consumerc)
entrepreneurd) capitalist
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A great variety of goods and services is
characteristic ofa) a market economyb)
traditional economyc) all economic systemsd)
a command economy
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The American economic system can be described as
having aa) command economyb) traditional
systemc) quota systemd) free enterprise system
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In a modified free enterprise economya)
entrepreneurship is prohibitedb) there is no
government interventionc) there is some
government interventiond) no one can hold
private property
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Choices in a command economy are made bya)
private businessb) government agenciesc)
assembly line workersd) competition
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An organized way of providing for the wants and
needs of people is known asa) an economic
systemb) economic interdependencec) a fixed
incomed) the profit motive
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Which of the following is NOT an economic social
goal?a) entrepreneurshipb) economic
efficiencyc) economic growthd) price stability
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Which of the following is NOT an economic social
goal?a) entrepreneurshipb) economic
efficiencyc) economic growthd) price stability
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Which group of people ultimately determines the
products that a free enterprise economy
produces?a) property ownersb) consumersc)
local officialsd) Congress
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The most common form of business organization in
the United States is thea) corporationb) sole
proprietorshipc) partnershipd) cooperative
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Voting shareholders in a company holda)
preferred stockb) common stockc) corporate
bondsd) dividends
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The price paid to use anothers money is
calleda) interestb) principalc)
dividendsd) stocks
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When corporations are chartered, they must
register with thea) county officialsb) Board
of Directorsc) state of incorporationd)
shareholders
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An advantage of a merger between two companies
isa) improved production and efficiencyb)
establishing a voluntary transactionc)
establishing a legal monopolyd) increasing cost
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Diversification is an advantage ofa) all
corporationsb) private ownershipc)
conglomeratesd) cooperatives
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One weakness of the sole proprietorship is that
thea) business depends solely on the ownerb)
owner has no controlc) owner has too many
partnersd) business is in constant danger of
bankruptcy
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Which of the following is NOT an economic social
goal?a) entrepreneurshipb) economic
efficiencyc) economic growthd) price stability
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Churches and schools are considered to bea)
service organizationsb) nonprofit
organizationsc) service co-opsd) horizontal
mergers
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As a consumer, if the price of apples double and
your salary remains the same, you would
probablya) buy more complementary goodsb) buy
more applesc) buy fewer applesd) buy the same
number of apples
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If the price of a product decreases and consumers
buy more of the product,a) the product is a
complementary goodb) a change in demand has
taken placec) there has been an increase in
demandd) a change in quantity demanded has
taken place
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The satisfaction a consumer enjoys by purchasing
one more unit of a product is calleda) marginal
utilityb) trade-offsc) personal
satisfactiond) cause and effect
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The statement the demand for an economic product
varies inversely with its price is a definition
ofa) the Law of Supply and Demandb) the Law
of consumptionc) the Law of Demandd) laissez
faire
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Demand is based on consumer purchase, whereas
supply is based ona) producers offering
products for saleb) the ability to purchasec)
the willingness to purchased) offering a wide
range of prices
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If the price of a product falls, producers will
generallya) increase inputb) offer more for
salec) hold a clearance saled) offer less for
sale
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In a market economy, a high price is a signal
fora) producers to offer less and consumers to
buy moreb) producers to supply more and
consumers to buy lessc) producers to buy
mored) government to step in and protect
consumers
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How do you know when a market is at
equilibrium?a) demand equals supplyb) supply
is greater than demandc) demand is greater than
supplyd) the government has set price ceilings
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Price competition is a characteristic of aa)
corporate stateb) market economyc) command
economyd) traditional economy
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In pure competition,a) buyers and sellers act
together.b) buyers and sellers deal in a
variety of products.c) buyers and sellers have
little knowledge of the items for sale.d) a
large number of buyers and sellers exist.
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Mergers and acquisitions might result ina)
increases in consumer demandb) smaller
companiesc) inadequate competitiond) more
competition
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In an oligopoly,a) prices are kept artificially
lowb) advertising is limitedc) pure
competition decides successd) there are few
suppliers
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To be counted in the civilian labor force, a
person must bea) a member of the militaryb)
already employed and between the ages of 16 and
65c) employed or looking for work, and between
the ages of 16 and 65d) male and more than 18
years old
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A meeting of representatives for labor and
management to negotiate contracts is calleda)
macroeconomicsb) collective bargainingc)
arbitrationd) seizure
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What type of union is made up of all workers,
regardless of the job each person performs?a)
industrial unionb) company unionc) craft
uniond) trade union
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Since World War II, union membership in the
United States has beena) declining b) at an
all-time highc) remaining constantd)
increasing
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The President may intervene in labor disputesa)
whenever management is involvedb) only when
federal workers are involvedc) if national
security is affectedd) only on an interstate
level
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The use of a third party to make suggestions and
advice in labor-management disputes is calleda)
closed shopb) mediationc) featherbeddingd)
open shop
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John earns 10,000 annually and pays 1000. Mary
earns 60,000 during the same period and pays
taxes of 20,000. The tax they both paid was a
_________ tax.a) regressiveb) marginalc)
progressived) proportional
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FICA includes taxes to pay fora) Social
Security and unemploymentb) Social Security and
Medicarec) private schoolsd) highways and
welfare
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The largest source of tax revenue for state
governments is thea) real estate taxb)
license feesc) entertainment taxd) sales tax
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What are the three buying principles?a)
comparing prices, using advertisements, reading
consumer reportsb) reading product literature,
using discount stores, watching for salesc)
gathering information, using advertising,
comparison shoppingd) watching for sales,
comparing prices, making decisions
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The larges source of income for city governments
is thea) sales taxb) income taxc) property
taxd) intergovernmental revenues
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In recent years, the fastest growing portion of
the federal budget is the category ofa)
entitlementsb) agriculturec) national
defensed) international affairs
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The federal budget is first prepared by thea)
Presidentb) Secretary of the Treasuryc) House
Appropriations Committeed) Congress
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A law that reserves federal money for a specific
purpose is called a(n)a) congressional
resolutionb) appropriations billc) excise
taxd) executive order
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The sequence of approval of the federal budget
isa) President to Congress back to
Presidentb) President to Congress to Supreme
Courtc) Supreme Court to Congress to
Presidentd) Congress to Supreme Court to
President
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A monetary standard is useda) to control
government spendingb) to determine tax
tablesc) only for international traded) to
maintain the value of a money supply
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When it comes to modern money, all of the
following apply EXCEPTa) it is very durableb)
it is very stablec) it is very portabled) it
is very divisible
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Federal Reserve notes area) backed by goldb)
special paymentsc) NOW accountsd)
inconvertible flat money
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The FDIC was established toa) create a
government monopolyb) help with the financing
of World War IIc) federalize the banking
systemd) protect the savings of the American
people
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A moneyless society that relies on trade is an
economy based ona) socialismb)
self-sufficient familiesc) command
economicsd) the barter system
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Money that has an alternative use isa) paper
currencyb) commodity moneyc) flat moneyd)
bullion
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A dual banking system is one in which banksa)
get their insurance from the FDICb) are
regulated by the Fed or the FDICc) can make
loans in the form of cash or demand depositsd)
can obtain their charter from either the state of
the federal government
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The Truth-in-Lending Act is designed toa)
disclose all credit terms to borrowersb)
prohibit discrimination in granting creditc)
protect individual credit reportsd) prevent
abuses to collection agencies
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The Federal Reserve System isa) the nations
central bankb) a branch of Congressc) the
primary regulator of all commercial banksd) a
private bank for savings
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Banks that belong to the Federal Reserve
Systema) are owned by the federal
governmentb) hold stock in the Fed and,
therefore, own itc) are independent of any
regulationsd) receive no dividends
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The seven-member Federal Reserve Board of
Governors is appointed bya) the Supreme
Courtb) Congressc) the Presidentd) state
governors
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Coins, currency, and deposits used to fulfill the
Feds reserve requirement are calleda) legal
reservesb) monetary policyc) the fractional
reserve systemd) the reserve requirement
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To make a profit, a bank musta) pay depositors
more interest than is charged on loansb) have
less deposits than loansc) change more for the
loans that it makes than it pays on depositsd)
buy up home mortgages in the area
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A tight money policya) increases bank notesb)
encourage economic growthc) restricts the
growth of the money supplyd) causes interest
rates to decline
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To decrease the money supply, the fed cana)
sell government bonds to securities dealersb)
lower the discount ratec) buy government
securities from bond dealersd) stop printing
money
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Low interest ratesa) raise the cost of
borrowingb) decrease automobile salesc)
increase consumer borrowingd) discourage home
building
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GDP isa) total amount of income going to
consumers before individual income taxes are
subtractedb) illegal activities that are not
counted as part of the economyc) total output
of all final goods produced in a country in one
yeard) none of the above
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The best guide for comparing costs of credit
isa) the annual membership feeb) the amount
of the monthly installment paymentsc) the
repayment period requiredd) the annual
percentage rate
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Generally, Americans want GDP toa) shrinkb)
fluctuatec) remain stabled) grow
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To help consumers compare food brands, most
states require stores to providea) unit pricing
on productsb) weekly advertisingc) scanners
at checkout countersd) private-label brands
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When was the worst down-turn of the business
cycle in the United States?a) during the Great
Depression of the 1930sb) during the postwar
period of the 1950sc) during the Vietnam War
in the 1960sd) during World War II in the
1940s
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A construction worker cannot work because of a
winter snowstorm. He isa) seasonally
unemployedb) frictionally unemployedc)
cyclically unemployedd) structurally unemployed
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All of the following types of unemployment might
be considered relatively temporary EXCEPTa)
frictionally unemploymentb) cyclical
unemploymentc) structurally unemploymentd)
seasonal unemployment
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The theory that inflation is caused by all
sectors of the economy trying to buy m ore than
the economy can produce is called thea)
cost-push theory of inflationb) demand-pull
theory of inflationc) excessive monetary growth
theory of inflationd) wage-price spiral theory
of inflation
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An economist who attributes inflation to the
increasing prices of producer inputs is holding
to thea) excessive monetary growth theory of
inflationb) demand-pull theory of inflationc)
wage-price spiral theory of inflationd)
cost-push theory of inflation
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Under Communisma) the government has a
laissez-faire attitude toward the economyb) the
government allows for capitalismc) only the
major industries are owned by the governmentd)
all means of production are owned by the
government
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Those who favor supply-side policies would tend
to support the government playinga) an
expanding role in the economyb) no role in the
economyc) a reduced role in the economyd) a
role in monetary policies only
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The key to trade isa) flexibilityb)
versatilityc) specializationd) bartering
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The ability of a country to produce more of a
given product isa) international tradeb)
comparative advantagec) absolute advantaged)
specialization
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The ability of a country to produce relatively
more efficiently isa) comparative advantageb)
international tradec) specializationd)
absolute advantage
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Keogh and IRA plans allow people to do all of the
following EXCEPTa) receive dividend payments
once a yearb) save money each year for
retirementc) deduct the amount saved from
taxable incomed) establish their own pension
plans
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The most frequent argument used to support trade
barriers is that theya) protect domestic
jobsb) promote national defensec) shield
infant industriesd) raise government revenue
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Today, international trade operatesa) with the
fixed exchange rate systemb) with floating
exchange ratesc) with a foreign exchange
marketd) on a gold standard
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The largest stock exchange in the USA is thea)
New York Stock Exchangeb) Over the Counter
Exchangec) NASDAQd) The New York Mercantile
Market
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The demand for lumber increases, so does the
demand for nails. Economists would then say that
lumber and nails area) unrelated productsb)
substitutesc) independentsd) complements
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All the following are currency excepta)
quartersb) one dollar billsc) twenty dollar
billsd) ten dollar bills
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All the following are considered professional
EXCEPTa) teacherb) lawyerc) truck
driverd) a member of Congress
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Women in the American workforce,a) generally do
not work as many hours as menb) are more likely
to be President of a company than a manc) are
generally paid more than mend) earn about 70
of what men earn for similar work