Goal 8: Analyze features of the economic system of the US. Ch. 20-22,24. Economic Notes. Around 8-12 Questions
1. 1. Identify the type of economy featured inthe United States.
A. Command EconomyB. Market EconomyC. Mixed EconomyD. Traditional Economy
2. Which is the strongest motivating forcewithin a market economy system?
A. Governmental AgenciesB. Individual Self-InterestsC. Labor UnionsD. The United States Constitution
3. The factors of production are owned by______in a command economy.
A. The GovernmentB. Individual CitizensC. Owners of PropertyD. The Mass Media
4. A mixed economy combines two differenteconomic types. Which two economic typesare combined?
A. Market Traditional EconomiesB. Command Market Economies
C. Traditional & Factor EconomiesD. Market and Traditional Economies
5. A traditional economy is defined as:
A. A structure run by the government thatoffers little freedom of choice to citizensB. A market run by a single seller
C. A market with no competition wherebartering occurs to obtain goods
D. An economy where every private sellercompetes for profit margins
6. Which of the following BEST DEFINES theunderlying principles of the free enterprisesystem?
A. Anyone can go into business with apartner
B. Anyone can go into business withexpress permission from thegovernment
C. Anyone can go into business for himselfor herself
D. Anyone can go into business so long asthey obtain a business degree from anaccredited school
7. Which feature defines a sole proprietorship?
A. One owner of a businessB. Two owners of a business
C. Stockholders own a businessD. The business is under a franchisingagreement
8. What is one advantage of forming acorporation?
A. The owners are regulated less by thegovernment and need fewer licenses toconduct their business
B. A corporation can hire more employees
C. A corporation cannot be held legallyliable for actions that a privateindividual would
D. Owners of a corporation are subject toless liability if the business fails
9. Eduardo is forming a business. His friendRosalinda asked Eduardo why he wasforming a business, and Eduardo said hehoped to make a profit. Rosalinda then askedEduardo what profit is. How could Eduardobest answer her?
A. “It’s the money a business makes andreceives each month.”
B. “It’s the money a business makes after ithas paid all of its expenses.”
C. “It’s a marginal good leveraged on theassets of multiple financialinstruments.”
D. “It’s the total amount of revenues.”
10. Fill in the blank:______between sellers keepsthe costs of production low and the quality ofgoods and service delivery high.
A. CompetitionB. ExchangesC. ProfitsD. Interdependence
11. With each slice of pizza you eat, you become less hungry & therefore receive less satisfaction. What law does this scenario best represent?
A. law of supplyB. law of demandC. law of diminishing marginal returnsD. law of substituting goods
12. What economic model best represents thefactor and product markets?
A. The Invisible HandB. The Circular FlowC. The Economic FlowD. The Business Cycle
13. Darius works at a law firm for 10 hours aweek. He is paid $10 per hour. When Dariusworks, what market is he participating in?
A. The Factor MarketB. The Product MarketC. The Free MarketD. The Command Market
14. What effect does competition betweenbusinesses have on consumers?
A. It gives buyers better value for theirmoneyB. It forces buyers to travel longerdistances to purchase goods
C. It increases prices for consumersD. It decreases the need for advertisements
15. How are prices set in a competitive market?
A. Prices are set by efficient use ofresourcesB. Prices are set by a single seller
C. Prices are set by supply and demandD. Prices are set by a select fewcorporations
16. If a fast-food restaurant creates a machineto speed up cooking times of French fries(which decreases costs of the goods), which ofthe following will most likely occur?
A. Supply will increaseB. Supply will decreaseC. Demand will increaseD. Demand will decrease
17. A local newspaper reports that eatingbroccoli will increase strength, stamina, andperformance in sports. This will most likelycause a ______for broccoli.
A. Supply increaseB. Supply decreaseC. Demand increaseD. Demand decrease
18. An equilibrium price is best defined as:
A. The price where supply and demand arein a central position
B. The price where the consumer can bestafford the product, good, or service
C. The price where the quantity demandedand the amount supplied are equal toeach other
D. The price where the producer earns thelargest amount of profit
19. Which example best illustrates the law ofsupply and demand?
A. An oil shortage drives up the price ofgasoline
B. Concern over the environmental impactof automobiles leads to an increase inride-sharing
C. Increased numbers of thefts leadautomotive insurance companies toraise insurance premiums
D. Slower sales cause a car company toraise the price of their luxury cars
20. When quantity demanded is greater thanquantity supplied, what situation occurs?
A. ScarcityB. ShortageC. SurplusD. Elasticity
21. Which is an example of a price floor that isset in place by the government?
A. Equilibrium PriceB. Minimum WageC. Rent ControlD. Legal Tender
22. Which best defines an oligopoly?
A. When a market is dominated by a singleseller of a good.
B. When a market is dominated by a fewlarge sellers of a good.
C. When a market is dominated by a largenumber of sellers of a good.
D. When a market is dominated by thegovernment.
23. If prices are set higher than theequilibrium price, what economic termdescribes the resulting extra goods?
A. A surplusB. A scarcityC. A shortageD. Elasticity
24. What is the name of laws that attempt toprevent monopolies from forming?
A. Anti-trust lawsB. Anti-monopoly lawsC. Administrative lawsD. Constitutional laws
25. What concept makes stockholders onlyresponsible for a portion of the debts of acorporation?
A. Absolute liabilityB. Conditional liabilityC. Direct liabilityD. Limited liability
26. Some companies pay shareholders a______at regular intervals, based onthe number of shares they hold.
A. DividendB. Time DepositC. ReturnD. Bond
27. Which best fits the relationship?Government Bonds : ______:: Less Risk : More Risk
A. StocksB. LiquidityC. InflationD. Long-term financial instruments
28. Adrienne buys a gallonof milk. Which function of money is used byAdrienne’s purchase of the milk?
A. Measure of ValueB. Medium of ExchangeC. Store of ValueD. Standard of Deferred Payment
29. To avoid credit card interest charges, aconsumer would:
A. Default immediatelyB. Pay off the full balance monthly
C. Make the minimum monthly paymentD. Pay half the monthly balance
30. Because of specialization, Country A relies on Country B to provide goods and services consumed in Country C. Which term is used to describe this scenario?
A. economic interdependenceB. specializationC. competitionD. economic system
1. C
2. B
3. A
4. B
5. C
6. C
7. A
8. D
9. B
10. A
11. C
12. B
13. C
14. A
15. C
16. A
17. C
18. C
19. A
20. B
21. B
22. B
23. A
24. A
25. D
26. A
27. A
28. B
29. B
30. A