Economics Review 2

Opportunity Costs

100

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

b. 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. an 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

Basic Economics

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

One of the most effective ways of helping an economy grow is to: __________________________________________________________________________________ a. improve the quality of human capital through education __________________________________________________________________________________ b. give people more time __________________________________________________________________________________ c. limit scarcity __________________________________________________________________________________ d. give people more money __________________________________________________________________________________

a. improve the quality of human capital through education

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

Economic resources includes: __________________________________________________________________________________ a. money, human capital, time, physical capital, entrepreneurship, land __________________________________________________________________________________ b. natural resources, physical capital, entrepreneurship, human capital __________________________________________________________________________________ c. labor, natural resources, money, equipment __________________________________________________________________________________ d. job skills, time, buildings, workers __________________________________________________________________________________

b. natural resources, physical capital, entrepreneurship, human capital

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

Financial Planning

100

True or False: You should follow the same budget to control your spending and to meet your financial goals. __________________________________________________________________________________ a. True __________________________________________________________________________________ b. False __________________________________________________________________________________

b. False A spending plan will need to be adjusted as income, expenses, and financial goals change.

200

Who is responsible for keeping track of your debit card purchases?__________________________________________________________________________________ a. The stores will send you statements after every purchase __________________________________________________________________________________ b. Your bank or credit union __________________________________________________________________________________ c. You __________________________________________________________________________________ d. The debit card company __________________________________________________________________________________

c. You

300

Which is a SMART goal? __________________________________________________________________________________ a. Save $150 to make a deposit on your spirit pack by February 4. __________________________________________________________________________________ b. Purchase a new pair of shoes by end of the semester. __________________________________________________________________________________ c. Invest 100 dollars in Sirius-XM stock. __________________________________________________________________________________ d. Buy a new laptop for college.

a. Save $150 to make a deposit on your spirit pack by February 4.

400

Of the following, which is the best strategy to reduce excessive debt? __________________________________________________________________________________ a. Pay off loans with the highest interest rate __________________________________________________________________________________ b. Make regular minimum payments on each loan and credit card until the balances are paid __________________________________________________________________________________ c. Use one large loan to pay off all of the other debts __________________________________________________________________________________ d. File Chapter 7 bankruptcy __________________________________________________________________________________

a. Pay off loans with the highest interest rate

500

What approximate interest rate would an investor need to earn in order to double the value of an investment in six years? __________________________________________________________________________________ a. 6% __________________________________________________________________________________ b. 10% __________________________________________________________________________________ c. 12% __________________________________________________________________________________ d. 72% __________________________________________________________________________________

c. 12%

Market Analysis & 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 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

The determinants of demand are: __________________________________________________________________________________ a. Government, Income, Number of sellers, Expectations, Weather __________________________________________________________________________________ b. Taste, Input Prices, Population, Substitutes, Expectations __________________________________________________________________________________ c. Government, Input Prices, Number of Sellers, Expectations, Weather __________________________________________________________________________________ d. Taste, Income, Population, Substitutes, Expectations __________________________________________________________________________________

d. Taste, Income, Population, Substitutes, Expectations

400

What are the determinants of supply? __________________________________________________________________________________ a. Government, Weather, Competition, Expectations, Preferences __________________________________________________________________________________ b. Preferences, Expectations, Number of sellers, Complements __________________________________________________________________________________ c. Government, Input Prices, Number of sellers, Expectations, Weather __________________________________________________________________________________ d. Taste, Income, Prices, Population, Substitutes __________________________________________________________________________________

c. Government, Input Prices, Number of sellers, Expectations, Weather

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