Economics
Final Examination – June 2002
Name ______Date ______
Teacher ______Class Period ______
CITY SCHOOL DISTRICT
ROCHESTER, NEW YORK
ECONOMICS
FINAL EXAMINATION
JUNE 2002
PART I
Students will need a machine-scorable answer sheet for Part I. Responses for Part II may be written in that booklet.
I agree that the test mods used for the administration of
this test were those listed on the IEP.
(Student)
(Teacher)
Part I
(ANSWER ALL QUESTIONS IN THIS PART)
Directions: This part contains fifty-five (55) multiple-choice questions. Mark your answers on the answer sheet provided. Choose the BEST ANSWER for each question. Make sure that if you change an answer, you thoroughly erase your first answer.
1. Which term describes the phase of economic growth in the business cycle?
A. peak C. recession
B. expansion D. all of above
2. How does unemployment hurt the economy as a whole?
A. the nation loses goods and services
B. businesses lose sales
C. the government supports the unemployed and their dependents
D. all of the above
3. If substitutes are not readily available for a product, it has
A. inelastic demand. C. an income effect.
B. elastic demand. D. a substitution effect.
4. What term is used to describe a period of business slowdown?
A. peak C. contraction
B. expansion D. trough
5. What sets prices in a perfectly competitive market?
A. supply and demand C. the Invisible Hand
B. the stock market D. costs and benefits
6. If competition is inconvenient and impractical, what kind of monopoly tends to develop?
A. natural monopoly C. technological monopoly
B. geographic monopoly D. government monopoly
7. What is the goal of an easy-money policy?
A. to increase aggregate demand
B. to create jobs and promote growth
C. to reduce unemployment
D. all of the above
8. An item is money if it serves as a
A. store of value. C. standard of value.
B. medium of exchange. D. all of the above
9. What type of business organization are you most likely to use if you want complete control and exclusive right to all profits?
A. sole proprietorship C. corporation
B. general partnership D. limited partnership
10. The minimum wage is an example of a
A. price floor. C. black-market.
B. price ceiling D. rationing system.
11. All economies today are actually
A. mixed. C. traditional.
B. command. D. market.
12. Which of the following is an example of a proportional tax?
A. flat rate tax C. sales tax
B. federal income tax D. categorical tax
13. Children are likely to carry on the economic roles of their parents in a
A. command economy. C. traditional economy.
B. mixed economy. D. market economy.
14. The income tax is an example of a
A. progressive tax. C. regressive tax.
B. proportional tax. D. all of the above
15. Which of the following is a result of a tight-money policy?
A. people are willing to borrow money
B. businesses cut back production
C. consumers are willing to buy new homes
D. businesses expand
16. In a command economy, decisions are based on
A. orders of central planners. C. tradition and custom.
B. consumer demands. D. wants rather than needs.
17. To decrease the money supply, the Fed can
A. decrease the reserve requirement.
B. buy more Treasury bills.
C. increase the reserve requirement.
D. request permission from Congress.
18. An entrepreneur is an individual who
A. does not believe in the profit motive.
B. organizes and operates a business for profit.
C. manages a store for another person.
D. has limited liability.
19. The opportunity cost of comparison-shopping is
A. time you could have spent doing something else.
B. price you pay for the item you choose.
C. money advertisers spend to attract your attention to their products.
D. money you save by making a rational choice.
20. The principle of scarcity in an economy refers to
A. supply and demand.
B. profit and loss.
C. unlimited wants and limited resources.
D. competition.
21. Which of the following economic groups is most affected by inflation?
A. union members C. the middle class
B. people on fixed incomes D. wealthy people
22. The value of time, money, goods and services given up in an economic choice is an
A. economic tradeoff. C. item cost.
B. opportunity cost. D. economic cost.
23. A disadvantage of a corporation is that it
A. has limited liability. C. is taxed heavily.
B. can issue stock to raise capital. D. can continue indefinitely.
24. One advantage of a controlled economy is
A. the incentive to work hard. C. speed of rerouting resources.
B. consumer choices. D. the opportunities for wealth.
25. A tax on goods brought into the United States from other countries is called a(n)
A. subsidy. C. quota.
B. tariff. D. export.
26. An example of a regressive tax is a(n)
A. proportional tax. C. tax deduction.
B. sales tax on food. D. customs duty.
27. When inflation occurs, the purchasing power of the dollar
A. goes down. C. goes up.
B. is not affected. D. cannot be measured.
28. The consumer price index compares
A. quality of goods. C. price levels.
B. income levels. D. quantity of goods.
29. According to the law of supply, as the price rises for a good,
A. quantity supplied decreases. C. quantity supplied increases.
B. consumers stop buying it. D. manufacturers stop producing it.
30. Who owns the factors of production and makes economic decisions in a market economy?
A. individuals C. economists
B. government D. communities
31. A general rise in prices is called
A. deflation. C. inflation.
B. money GDP. D. stagflation.
32. What strategy might unions use if they are unable to agree with management?
A. pickets C. boycotts
B. strikes D. all of the above
33. Scarcity can be dealt with by
A. doing without goods and services.
B. making better use of available resources.
C. creating more of the needed resources.
D. all of the above
34. When the number of workers in an occupation is limited and demand for these workers is high, then wages tend to be
A. high. C. steady.
B. low. D. variable.
35. According to the model, the equilibrium price for peaches is
A. $1.00.
B. $2.00.
C. $3.00.
D. $4.00.
36. A limit on the amount of goods that can be imported into a country is called a
A. cartel. B. tariff. C. subsidy. D. quota.
37. During an economic depression, which can be expected to increase?
A. bank deposits C. unemployment
B. number of new businesses D. home constructions
38. If the price of butter increases, people will buy more margarine. This is due to
A. price discrimination. C. increased demand for butter.
B. the substitution factor. D. decrease in the supply of margarine.
39. Which situation best illustrates the concept of interdependence among nations?
A. adoption of a policy of economic nationalism
B. establishment by a nation of high protective tariffs
C. sale of goods by one nation to obtain scarce resources from another nation
D. expansion of international sporting events
40. If high school basketball games and college basketball games are close substitutes, an increase in the price of tickets for college basketball games will
A. increase demand for college basketball tickets.
B. increase demand for high school basketball tickets.
C. increase the supply for high school basketball tickets.
D. decrease the supply of college basketball tickets.
41. “Economic demand” for a product refers to how much of the product
A. is available for purchase from business at each price.
B. people are willing and able to buy at each price.
C. people want, whether they can buy it or not.
D. consumers can afford.
42. Which of the following would be the normal pattern for a complete business cycle?
A. prosperity, depression, recession, prosperity
B. depression, recession, prosperity
C. prosperity, depression, recovery
D. prosperity, recession, depression, recovery, prosperity
43. The land and the natural resources it contains are one of the factors of production. Which of the following is a natural resource?
A. a computer C. a pencil
B. a bridge over a river D. iron ore
44. According to the law of supply and demand, prices should go
A. down as supply goes down. C. down as supply increases.
B. up as supply increases. D. up as demand decreases.
45. If the quantity of a product that consumers want exceeds the quantity that producers are supplying, what is most likely to happen?
A. Prices will rise. C. A glut will occur.
B. Prices will fall. D. Wages will increase.
46. What are the three stages of production that can be predicted by the law of diminishing returns?
A. increasing returns, decreasing returns and fluctuating returns
B. increasing returns, diminishing returns and negative returns
C. stable returns, diminishing returns and negative returns
D. stable returns, decreasing returns and fluctuating returns
47. Which of the following is true about excise taxes?
A. They are regressive.
B. The federal government levies them on such products as gasoline.
C. They are levied on the manufacture, sale or consumption of certain goods and services.
D. all of the above
48. The equilibrium price is the point at which
A. quantity supplied equals quantity demanded.
B. suppliers make a profit.
C. suppliers lose money.
D. demand causes prices to rise.
49. A new invention is most likely to be resisted in a
A. traditional economy. C. modified market economy.
B. command economy. D. market economy.
50. The degree to which changes in price cause changes in quantity demanded is known as
A. elasticity of demand. C. substitution.
B. a demand schedule. D. elasticity of supply.
51. Partnerships are different from sole proprietorships in that they
A. require less capital. C. are easier to organize.
B. have limited liability. D. combine the capital of two people.
52. One way the government can use fiscal policy to combat unemployment is by
A. increasing taxes.
B. reducing government spending.
C. eliminating tax credits on investments.
D. decreasing taxes.
53. Patents and copyrights create
A. temporary monopolies. C. natural monopolies.
B. perfect competition. D. differentiated competition.
54. Which of the following can be a tool of fiscal policy?
A. spending C. borrowing
B. taxing D. all of the above
55. Gross Domestic Product is a measure of
A. the price level of goods and services sold.
B. total spending by federal, state and local governments.
C. the quantity of goods and services produced by private businesses.
D. the market value of the nation’s output of final goods and services.
SSE-94 (10/24/03) Page 28
Economics
Final Examination – June 2002
Name ______Date ______
Teacher ______Class Period ______
CITY SCHOOL DISTRICT
ROCHESTER, NEW YORK
ECONOMICS
FINAL EXAMINATION
JUNE 2002
PART II AND PART III
This booklet contains Part II and Part III of the exam.
Complete all parts of the booklet as directed.
Complete the heading at the top of this page.
Write your Essays on the separate essay paper provided
TEACHER USE ONLYPossible Points / Credits Earned
Part I / 55
Part II / 15
Part III – Scaffold
Essay / 15
15
TOTAL POINTS / 100
PART II - THEMATIC ESSAY QUESTION
Directions: Write a well-organized essay that includes an introduction, several paragraphs addressing the task and a conclusion.
Theme: Scarcity
Throughout history, every civilization has had to deal with the problem of scarcity. In the United States scarcity has fueled the problem of rising gasoline prices.
Task In your essay:
Define scarcity.
Explain two different causes of scarcity in the United States related to gas prices.
Explain two different ways to deal with scarcity of gasoline.
Refer to the rubric on the next page as a guide.
THEMATIC ESSAY RUBRIC
13 - 15 POINTS
Shows a clear and deep understanding of theme
Addresses all aspects of the task
Shows an ability to analyze, compare and contrast issues and events
Writes a cohesive, cogent essay that uses a rich array of detail
Summarizes key arguments and points made in the essay
Includes a strong introduction and conclusion
10 - 12 POINTS
Understands the theme and defines it well
Discusses most aspects of the task. Supported with accurate facts, examples and details, but may be somewhat uneven in treatment
Analyzes issues and events
Writes a well-developed essay that includes many details
Includes a good introduction and conclusion
7 - 9 POINTS
Presents an acceptable definition of the theme
May fail to address all aspects of the task. Minimal factual errors may be present
Is able to analyze issues and events, but not in depth
Writes a coherent essay with some detail
Restates the theme in the introduction and concludes with a simple restatement of task
4 - 6 POINTS
Attempts to address the theme, but uses vague and/or inaccurate information
Develops faulty analysis of the theme
Narrative goes off on tangents: essay lacks focus
1 – 3 POINTS
Shows limited understanding of the theme; omits concrete examples
Details are weak or non-existent
Lacks an analysis of the issue and events beyond stating vague and/or inaccurate facts
Strings random facts together in a weak narrative that lacks focus
Has no introduction or conclusion
0 POINTS
Fails to address the theme
Blank paper
PART III – Document-Based Question
This task is based on the accompanying documents (1-8). This task is designed to test your ability to work with documents. Some of these documents have been edited for the purpose of this task. As you analyze the documents, take into account both the source of each document and any point of view that may be presented in the document.