Economics Review 2

Opportunity Costs

100

All alternatives are considered opportunity costs. __________________________________________________________________________________ a. True __________________________________________________________________________________ b. False __________________________________________________________________________________

a. False

200

Every decision involves: __________________________________________________________________________________ a. a cost __________________________________________________________________________________ b. some money __________________________________________________________________________________ c. negotiating with someone __________________________________________________________________________________ d. none of the answer choices __________________________________________________________________________________

a. a cost

300

You choose from among the following activities: bowling with your family, staying home and listening to music, or going to a friend’s house. You decide to go to your friend’s house. If you hadn’t done that, you would have gone bowling. Your choice(s) is/are: __________________________________________________________________________________ a. music at home __________________________________________________________________________________ b. bowling __________________________________________________________________________________ c. friend's house __________________________________________________________________________________ d. all of the above __________________________________________________________________________________

c. friend's house

400

You buy a used Apple MacBook for 500 dollars. The cost of this laptop is: __________________________________________________________________________________ a. 500 dollars __________________________________________________________________________________ b. 500 dollars plus tax __________________________________________________________________________________ c. 500 dollars plus tax plus the grief your parents give you about buying the laptop __________________________________________________________________________________ d. Whatever you would have done with the $500 if you hadn’t bought the laptop. __________________________________________________________________________________

d. Whatever you would have done with the $500 if you hadn’t bought the laptop.

500

Which of the following is free? __________________________________________________________________________________ a. a airline ticket to New York that you received as a gift from a family member __________________________________________________________________________________ b. a t-shirt that you received for helping volunteer __________________________________________________________________________________ c. "buy one, get one free" iPod __________________________________________________________________________________ d. none of the answer choices are free __________________________________________________________________________________

d. none of the answer choices are free

Economics Basics

100

Which one of the following statements is TRUE about economics? __________________________________________________________________________________ a. It is the study of money. __________________________________________________________________________________ b. It is the study of the stock market. __________________________________________________________________________________ c. It is the study of individual use of scarce resources. __________________________________________________________________________________ d. It is the study of how individuals use their time and money. __________________________________________________________________________________

c. It is the study of individual use of scarce resources.

200

Adam Smith is associated with what economic concept?__________________________________________________________________________________ a. Invisible Hand __________________________________________________________________________________ b. Fiscal Policy __________________________________________________________________________________ c. Monetary Policy __________________________________________________________________________________ d. Principal of Exchange __________________________________________________________________________________

a. Invisible Hand

300

People choose because __________________________________________________________________________________ a. wants compete for limited resources __________________________________________________________________________________ b. resources are insufficient to fulfill people's wants __________________________________________________________________________________ c. people can't have everything they want __________________________________________________________________________________ d. all of the answer choices __________________________________________________________________________________

d. all of the answer choices

400

According to economics, the best description of wealth is: __________________________________________________________________________________ a. lots of money __________________________________________________________________________________ b. subjective evaluation of well-being __________________________________________________________________________________ c. money accumulated over a long period of time __________________________________________________________________________________ d. inherited money __________________________________________________________________________________

b. subjective evaluation of well-being

500

Which of the following is an economic decision?__________________________________________________________________________________ a. lie or tell the truth __________________________________________________________________________________ b. go to your friends to play video games or stay home and study for your Econ final __________________________________________________________________________________ c. squash a bug or not __________________________________________________________________________________ d. be nice to Mr. Martinez or not __________________________________________________________________________________

b. go to your friends to play video games or stay home and study for your Econ final

Benefit/Cost Analysis & Marginal Analysis

100

Marginal means __________________________________________________________________________________ a. what you spread on toast __________________________________________________________________________________ b. one more unit of something __________________________________________________________________________________ c. costs that can't be recovered __________________________________________________________________________________ d. giving some of one thing to get more of another __________________________________________________________________________________

b. one more unit of something

200

The cost of a decision made in the past is a __________________________________________________________________________________ a. transaction cost __________________________________________________________________________________ b. sunk cost __________________________________________________________________________________ c. marginal cost __________________________________________________________________________________ d. search cost __________________________________________________________________________________

b. sunk cost

300

Which is the correct order?__________________________________________________________________________________ a. identify goal; find and list alternatives; consider & evaluate criteria; choose; re-evaluate __________________________________________________________________________________ b. compare advantages and disadvantages of alternative; choose an alternative; identify decision, list alternatives; re-evaluate __________________________________________________________________________________ c. choose; identify goal; re-evaluate alternatives; consider disadvantages and advantages __________________________________________________________________________________ d. consider alternatives; choose; identify decision; use criteria to evaluate alternatives; re-evaluate __________________________________________________________________________________

a. identify goal; find and list alternatives; consider & evaluate criteria; choose; re-evaluate

400

Imperfect information happens when __________________________________________________________________________________ a. the anticipated increase in wealth is lower than the actual wealth __________________________________________________________________________________ b. you pass along details and the information gets mixed up __________________________________________________________________________________ c. someone gives wrong information on purpose __________________________________________________________________________________ d. the anticipated increase in wealth may be higher than the actual wealth __________________________________________________________________________________

d. the anticipated increase in wealth may be higher than the actual wealth

500

In the economic way of thinking, if the marginal cost of an action is greater than the marginal benefit then __________________________________________________________________________________ a. DO IT __________________________________________________________________________________ b. DON'T DO IT __________________________________________________________________________________ c. SLEEP ON IT __________________________________________________________________________________ d. ASK SOMEONE FOR ADVICE __________________________________________________________________________________

b. DON'T DO IT

Inflation & GDP

100

Inflation does NOT hurt... __________________________________________________________________________________ a. people on fixed incomes __________________________________________________________________________________ b. lenders __________________________________________________________________________________ c. savers __________________________________________________________________________________ d. borrowers __________________________________________________________________________________

d. it helps borrowers

200

Which one of the following is NOT associated with cost-push theory?__________________________________________________________________________________ a. wage-price spiral __________________________________________________________________________________ b. supply-side cost shocks __________________________________________________________________________________ c. demand-side theory __________________________________________________________________________________ d. profit-push inflation __________________________________________________________________________________

c. demand-side theory

300

The purchase of new housing by households is counted in: __________________________________________________________________________________ a. Consumption __________________________________________________________________________________ b. Investment __________________________________________________________________________________ c. Government __________________________________________________________________________________ d. Exports __________________________________________________________________________________

b. Investment

400

When the economy isn't experiencing economic growth, we are in a recession when GDP is decreasing for how long? __________________________________________________________________________________ a. 2 quarters __________________________________________________________________________________ b. 3 quarters __________________________________________________________________________________ c. 4 quarters __________________________________________________________________________________ d. 6 quarters __________________________________________________________________________________

a. 2 quarters

500

You decide to invest in your future and became a full time college student. You have to pay a lot of expenses out of pocket to attend your state funded college. What part of the GDP equation does this fall under?: __________________________________________________________________________________ a. Government __________________________________________________________________________________ b. Investment __________________________________________________________________________________ c. Consumption __________________________________________________________________________________ d. Not counted __________________________________________________________________________________

c. Consumption

Market Analysis & Market System & Supply and Demand

100

According to the law of demand, a price increase will cause a(n): __________________________________________________________________________________ a. increase in supply __________________________________________________________________________________ b. decrease in supply __________________________________________________________________________________ c. increase in quantity demanded __________________________________________________________________________________ d. decrease in quantity demanded __________________________________________________________________________________

d. decrease in quantity demanded

200

New housing is built near FHS which causes the local 7-11 store to be a little busier. How does that relate to supply & demand?__________________________________________________________________________________ a. Demand curve shifts right __________________________________________________________________________________ b. Demand curve shifts left __________________________________________________________________________________ c. Supply curve shifts right __________________________________________________________________________________ d. Supply curve shifts left __________________________________________________________________________________

a. Demand curve shifts right

300

Which is the strength of the market system economy?__________________________________________________________________________________ a. equity __________________________________________________________________________________ b. security __________________________________________________________________________________ c. stability __________________________________________________________________________________ d. efficiency __________________________________________________________________________________

d. efficiency

400

Which conditions must exist to achieve effiency in a market economy?__________________________________________________________________________________ a. Competition __________________________________________________________________________________ b. Information __________________________________________________________________________________ c. Both the answer choices __________________________________________________________________________________ d. None of the answer choices __________________________________________________________________________________

c. Both the answer choices

500

When buyer's strongly respond to a price change, then that is referring to: __________________________________________________________________________________ a. law of demand __________________________________________________________________________________ b. law of supply __________________________________________________________________________________ c. price elasticity of demand __________________________________________________________________________________ d. price elasticy of supply __________________________________________________________________________________

c. price elasticity of demand