Economics Final Exam Quiz

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 Economics Final Exam Quiz
This is a quiz based off of some very standard economic basics

  
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  • 1. 
    What is Economics?
    • A. 

      The study of how people try to satisfy what appears to be seemingly unlimited and competing wants through the careful use of relatively scarce resources

    • B. 

      Employment, gross domestic product, inflation, economic growth, and the distribution of income

    • C. 

      Deals with behavior and decision making by small units, such as individuals and firms

    • D. 

      A rise in the general level of prices occurs, workers need more money to pay for good clothing and shelter


  • 2. 
    What is Scarcity?
    • A. 

      Giving something up to have something else

    • B. 

      Extra cost of producing one additional unit of production

    • C. 

      The condition that results from society not having enough resources to produce all the things people would like to have

    • D. 

      A rise in the general level of prices occurs, workers need more money to pay for good clothing and shelter


  • 3. 
    What are the three basic economic questions?
    • A. 

      What, where, whom

    • B. 

      What, how, whom

    • C. 

      How, whom, when

    • D. 

      What, why, whom


  • 4. 
    What are the four factors of production?
    • A. 

      Land, capital, money, entrepreneurs

    • B. 

      Land, capital, labor, entrepreneurs

    • C. 

      Capital, money, supply, demand

    • D. 

      Labor, capital, supply, demand


  • 5. 
    Definition of Land?
    • A. 

      Anything from the earth

    • B. 

      The space we occupy

    • C. 

      Gifts of nature

    • D. 

      All of the above


  • 6. 
    Definition of Capital?
    • A. 

      The tools, equipment used in the production of goods

    • B. 

      The machinery, and factories used in the production of goods

    • C. 

      The tools, and machinery used in the production of goods

    • D. 

      A and B

    • E. 

      B and C


  • 7. 
    Definition of Labor?
    • A. 

      People with all of the efforts, abilities, and skills

    • B. 

      The people who are for hire for work

    • C. 

      People with all of the workmanship, skills, and work

    • D. 

      The act of performing work at any given time


  • 8. 
    Definition of Entrepreneur?
    • A. 

      A risk taker in search of profits who's initila investment must be returned

    • B. 

      A investor in search of profits who does something new with existing resources

    • C. 

      A investor in search of profits who's initial investment must be returned

    • D. 

      A risk taker in search of profits who does something new with existing resources


  • 9. 
    What are the many payments for the factors of productions called?
    • A. 

      Land - wages, labor - interest, capital - rent, entrepreneurs - profit

    • B. 

      Land - rent, labor - wages, capital - interest, entrepreneurs - profit

    • C. 

      Land - profit, labor - rent, capital - wages, entrepreneurs - interest

    • D. 

      Land - interest, labor - rent, capital - profit, entrepreneurs - wages


  • 10. 
    What is opportunity cost?
    • A. 

      The cost assosiated with any opportunity

    • B. 

      Giving the cost in order to have the opportunity

    • C. 

      The cost required in order to succeed

    • D. 

      Giving something up to have something else


  • 11. 
    What is PPF?
    • A. 

      Possible Production Frontier

    • B. 

      Production Possibilities Frontier

    • C. 

      Probable Projection Frontier

    • D. 

      Projected Possibilities Frontier


  • 12. 
    What do the points along the frontier represent?
    • A. 

      Maximum combination of output if all resources are fully employed

    • B. 

      Minimum combination of output if all resources are fully employed

    • C. 

      Maximum combination of input if all resources are fully employed

    • D. 

      Minimum combination of input if all resources are fully employed


  • 13. 
    On the PPF how can a nation achieve growth?
    • A. 

      By having more resources or increased productivity

    • B. 

      By having an increase in supply and demand

    • C. 

      By having less resources or declined productivity

    • D. 

      By having an increase in resources and decrease in productivity


  • 14. 
    What does a point inside the curve on a PPF represent?
    • A. 

      Production at greater than its minimum potential

    • B. 

      Production as less than its minimum potential

    • C. 

      Production at greater than its maximum potential

    • D. 

      Production as less than its maximum potential


  • 15. 
    What is the classic example of a PPF?
    • A. 

      A mythical country called omega producing two goods, guns:butter

    • B. 

      A mythical country called alpha producing two goods, bread:butter

    • C. 

      A mythical country called omega producing two goods, bread:butter

    • D. 

      A mythical country called alpha producing two goods, guns:butter


  • 16. 
    What is the circular flow model?
    • A. 

      A model which shows the wealth that an economy generates

    • B. 

      A model which shows the wealth that the world generates

    • C. 

      A model that shows the recirculation of money in an economy

    • D. 

      A model that shows the debt that an economy generates


  • 17. 
    What are the functions of the entrepreneur?
    • A. 

      They provide the money necessary for the resources of land, labor, and capital

    • B. 

      They provide the procedures that combines the resources of land, labor, and capital into new products

    • C. 

      They provide the initiative that combines the resources of land, labor, and capital into new products

    • D. 

      They provide the drive necessary for the resources of land, labor, and capital


  • 18. 
    Name three types of businesses
    • A. 

      Traditional, command, market

    • B. 

      Command, market, competitive

    • C. 

      Traditional, market, competitive

    • D. 

      Command, traditional, competitive


  • 19. 
    Name the types of businesses
    • A. 

      Proprietorship, corporation, industrial

    • B. 

      Partnership, industrial, commercial

    • C. 

      Corporation, proprietorship, commercial

    • D. 

      Proprietorship, partnership, corporation


  • 20. 
    Define paradox of value?
    • A. 

      Apparent contradiction between the low value of nonessentials and high value of essentials

    • B. 

      Apparent agreement about the nonessentials being less needed and the essentials being greatly needed

    • C. 

      Apparent contadiction between the high value of nonessentials and low value of essentials

    • D. 

      Apparent agreement about the nonessentials being greatly needed and the essetials being less needed


  • 21. 
    What is the classic example of paradox of value?
    • A. 

      Water in great excess being worth less than diamonds in scarce excess being worth more

    • B. 

      Water in scarce excess being worth more than diamonds in great excess being worth less

    • C. 

      Water in great excess being worth more than diamonds in scarce excess being worth less

    • D. 

      Water in scarce excess being worth less than diamonds in great excess being worth more


  • 22. 
    What are the goals of the American Free Enterprise?
    • A. 

      Economic freedom, voluntary exchange, private property rights, profit motive, and competition

    • B. 

      Economic freedom, lack on monopolies, private property rights, profit motive, and competition

    • C. 

      Economic freedom, voluntary exchange, prevailence of rights, profit motive, and competition

    • D. 

      Economic freedom, voluntary exchange, private property rights, profit margain reduction, and competition


  • 23. 
    What is the law of demand?
    • A. 

      Rule stating that the quantity demanded of a good or service does not vary with its availability

    • B. 

      Rule stating that the quantity demanded of a good or service does not vary with its price

    • C. 

      Rule stating that the quantity demanded of a good or service varies inversely with its availability

    • D. 

      Rule stating that the quantity demanded of a good or service varies inversely with its price


  • 24. 
    What is the law of supply?
    • A. 

      The principle that suppliers will normally offer less for sale at high prices and more at lower prices

    • B. 

      The principle that suppliers will normally offer more for sale at high prices and less at lower prices


  • 25. 
    What causes the demand curve to shift?
    • A. 

      The increase/decrease in need

    • B. 

      The increase/decrease in volume

    • C. 

      The increase/decrease in price

    • D. 

      The increase/decrease in production


  • 26. 
    What causes the increase in supply?
    • A. 

      The increase/decrease in demand

    • B. 

      The increase/decrease in production

    • C. 

      The increase/decrease in volume

    • D. 

      The increase/decrease in price


  • 27. 
    What is equilibrium?
    • A. 

      A situation in which prices are very unstable

    • B. 

      A situation in which prices are very unreliable

    • C. 

      A situation in which prices are relatively stable

    • D. 

      A situation in which prices always fluctuate


  • 28. 
    What is Shortage?
    • A. 

      A situation in which the quantity demanded is greater than the quantity supplied at a given price

    • B. 

      A situation in which the quantity demanded is less than the quantity supplied at a given price

    • C. 

      A situation in which the quantity demanded is not offered by the manufacturer

    • D. 

      A situation in which the quantity demanded can not meet the supply provided


  • 29. 
    What is Surplus?
    • A. 

      A situation in which the quantity supplied is not met by the manufacturer

    • B. 

      A situation in which the quantity demanded is greater than the quantity demanded at a given price

    • C. 

      A situation in which the quantity supplied is less than the quantity demanded at a given price

    • D. 

      A situation in which the quantity supplied is greater than the quantity demanded at a given price


  • 30. 
    What is a price ceiling?
    • A. 

      A minimum legal price in order to maintain agreement

    • B. 

      A maximum legal price in order to maintain agreement

    • C. 

      A maximum legal price that can be charged for a product

    • D. 

      A minimum legal price that can be charged for a product


  • 31. 
    What is a price floor?
    • A. 

      Highest legal price that can be paid for a good or service

    • B. 

      Lowest legal price that can be paid for a good or service

    • C. 

      Highest legal price that can be charged in order to maintain agreement

    • D. 

      Lowest legal price that can be charged in order to maintain agreement


  • 32. 
    What is elastic?
    • A. 

      When a given change in price causes a relatively larger change in quantity demanded

    • B. 

      When a given change in quantity demanded causes a relatively larger change in price

    • C. 

      When a given change in price causes a relatively smaller change in quantity demanded

    • D. 

      When a given change in quantity demanded causes a relatively smaller change in price


  • 33. 
    What is inelastic?
    • A. 

      When a given change in quantity demanded causes a relatively smaller change in price

    • B. 

      When a given change in price causes a relatively larger change in the quantity demanded

    • C. 

      When a given change in price causes a relatively smaller change in the quantity demanded

    • D. 

      When a given change in quantity demanded causes a relatively larger change in price


  • 34. 
    What is unit elastic?
    • A. 

      If change in quantity demanded causes a proportional change in price

    • B. 

      If change in price does not cause a proportional change in quantity demanded

    • C. 

      If change in price causes a proportional change in quantity demanded

    • D. 

      If change in quantity demanded does not cause a proportional change in price


  • 35. 
    If prices and revenue move in opposite directions demand is?
    • A. 

      Increased

    • B. 

      Decreased

    • C. 

      Unit elastic

    • D. 

      Unit inelastic


  • 36. 
    What is microeconomics?
    • A. 

      The area of economics that deals with the behavior and decision making by small units

    • B. 

      The area of economics that deals with the behavior and decision of the whole world

    • C. 

      The branch of economics that deals with the economy as a whole

    • D. 

      The branch of economics that deals with the monetary value


  • 37. 
    What is macroeconomics?
    • A. 

      The branch of economics that deals with the monetary value

    • B. 

      The area of economics that deals with behavior and decision making by small units

    • C. 

      The branch of economics that deals with the economy as a whole

    • D. 

      The are of economics that deals with the behavior and decision making of your personal life


  • 38. 
    What is a collusion?
    • A. 

      A formal agreement to set prices or to otherwise behave in a cooperative manner

    • B. 

      An agreement to have a meeting discussing prices

    • C. 

      An informal agreement to set prices or to otherwise behave in a uncooperative manner

    • D. 

      A disagreement upon having a meeting discussing prices


  • 39. 
    What are the three functions of money?
    • A. 

      Measure of value, store of value, and direction of value

    • B. 

      Medium of exchange, measure of value, and store or value

    • C. 

      Measure of value, medium of exchange, and compliance of value

    • D. 

      Medium of exchange, store of value, direction of value


  • 40. 
    What are the characteristics of money?
    • A. 

      Durability, divisibility, limited availability, countability

    • B. 

      Divisibility, durability, portability, countability

    • C. 

      Limited availability, portability, durability, countability

    • D. 

      Portablility, durability, divisibility, limited availability


  • 41. 
    What is commodity money?
    • A. 

      Money that has a primary value in being a commodity

    • B. 

      Money that has been borrowed from the bank as a loan

    • C. 

      Money that has an alternative use as an economic good, or commodity

    • D. 

      Money that has an alternative use as a external way of paying for goods or services


  • 42. 
    What is the FED
    • A. 

      The central bank

    • B. 

      The federal bank

    • C. 

      The commision bank

    • D. 

      The world bank


  • 43. 
    What is the FOMC?
    • A. 

      Federal Opinion Money Committee

    • B. 

      Federal Open Minded Committee

    • C. 

      Federal Open Market Committee

    • D. 

      Federal Option Money Committee


  • 44. 
    How many district banks?
    • A. 

      13

    • B. 

      12

    • C. 

      22

    • D. 

      16


  • 45. 
    What are the three tools of the FED?
    • A. 

      Open market operations, discount rate, and reserve requirement

    • B. 

      Open market operations, increased rate, and reserve requirement

    • C. 

      Closed market operations, increased rate, and reserve requirement

    • D. 

      Closed market operations, discount rate, and reserve requirement


  • 46. 
    Who is the chairman of the FED?
    • A. 

      Bob Bernanke

    • B. 

      Ben Bernanke

    • C. 

      Big Bird Bernanke

    • D. 

      Bubba Sparks Bernanke


  • 47. 
    What is inflation?
    • A. 

      A fall in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelter

    • B. 

      A rise in the general level of prices occurs, workers need less money to pay for goods, clothing and shelter

    • C. 

      A fall in the general level of prices occurs, workers need less money to pay for goods, clothing and shelter

    • D. 

      A rise in the general level of prices occurs, workers need more money to pay for goods, clothing, and shelter


  • 48. 
    What is recession?
    • A. 

      A period during which real GDP increases for 2 quarters in a row, or 6 consecutive months

    • B. 

      A period during which real GDP declinces for 6 quarters in a row, or 2 consecutive months

    • C. 

      A period during which real GDP declines for 2 quarters in a row, or 6 consecutive months

    • D. 

      A period during which real GDP increases for 6 quarters in a row, or 2 consecutive months


  • 49. 
    What is "easy money"?
    • A. 

      The FED allows the money supply to grow and the interest rates to fall, which normally stimulates the economy

    • B. 

      The FED stops the money supply from growing and the interest rates to grow, which normally stimulates the economy

    • C. 

      The FED allows the money supply to grown and the interest rates to grow, which normally deprives the economy

    • D. 

      The FEW stops the money supply from growing and the interest rates to fall, which normally deprives the economy


  • 50. 
    What is "tight money" policy?
    • A. 

      The FED restricts the growth of the money supply, which drives interest rates up

    • B. 

      The FED allows the growth of the money supply, which drives the interest rates down

    • C. 

      The FED restricts the growth of the money supply, which drives the interest rates down

    • D. 

      The FED allows the growth of the money supply, which drives the interest rates up


  • 51. 
    What is a business cycle?
    • A. 

      Small systematic ups and downs of real GDP

    • B. 

      Small inverse ups and downs of real GDP

    • C. 

      Largely systematic ups and downs of real GDP

    • D. 

      Largely inverse ups and downs of real GDP


  • 52. 
    What are the 4 stages of a business cycle?
    • A. 

      Peak, trough, expansion, recovery

    • B. 

      Recession, peak, trough, expansion

    • C. 

      Recession, peak, trough, recovery

    • D. 

      Peak, recession, recovery, expansion


  • 53. 
    Name the three types of taxes?
    • A. 

      Proportional, proposed, regressive

    • B. 

      Regressive, proportional, probable

    • C. 

      Regressive, retaining, proposed

    • D. 

      Progressive, proportional, regressive


  • 54. 
    What are the two principles of taxation?
    • A. 

      Ability-to-pay, determination

    • B. 

      Benefit, ability-to-pay

    • C. 

      Profit, productivity

    • D. 

      Projection, benefit


  • 55. 
    What is personal income tax?
    • A. 

      The total amount of income going to consumers before individual income taxes are subtracted

    • B. 

      The total amount of income going to consumers after individual income taxes are subtracted

    • C. 

      A portion of the amount of income going to consumers after individual taxes are subtracted

    • D. 

      A portion of the amount of income going to comsumers befoe individual taxes are subtracted


  • 56. 
    What is disposable income?
    • A. 

      A portion of income the consumer sector has at its disposal after personal income taxes

    • B. 

      The total income the consumer sector has at its disposal before personal income taxes

    • C. 

      The total income the consumer sector has at its disposal after personal income taxes

    • D. 

      A portion of income the consumer sector has at its disposal before personal income taxes


  • 57. 
    Who is Adam Smith?
    • A. 

      A german economist

    • B. 

      A sweedish economist

    • C. 

      A scottish economist

    • D. 

      A english economist


  • 58. 
    What does the word "Laissez Faire" mean?
    • A. 

      The philosophy that government should not interfere with business activity

    • B. 

      The law stating that the government can at any time interfere with a businesses activity

    • C. 

      The philosophy that individuals should not interfere with government activity

    • D. 

      The law stating that the government cannot at any time interfere with a businesses activity


  • 59. 
    What is the law of variable proportions?
    • A. 

      States that in the long run, input will change as one output varies while the others are held constant

    • B. 

      States that in the short run, input will change as one output varies while the others are held constant

    • C. 

      States that in the short run, output will change as one input varies while the others are held constant

    • D. 

      States that in the long run, output will change as one input varies while the others are held constant


  • 60. 
    What is the civilian labor workforce?
    • A. 

      Men and women 16 years old and over who are not working or cannot get a job

    • B. 

      Men and women 18 years old and over who are either working or actively looking for a job

    • C. 

      Men and women 18 years old and over who are not working or cannot get a job

    • D. 

      Men and women 16 years old and over who are either working or actively looking for a job


  • 61. 
    Who is excluded from the civilian labor workforce?
    • A. 

      Government officials, prison population, and armed forces

    • B. 

      Armed forces, prison population, and other institutionalized persons

    • C. 

      Government officials, institutionalized persons, and armed forces

    • D. 

      Prison population, non-us citizens, and armed forces


  • 62. 
    Define merger?
    • A. 

      A combination of two or more buisnesses to form a single firm

    • B. 

      A combination of three or more buisnesses to form a single firm

    • C. 

      A combination of four of more buisnesses to form a single firm


  • 63. 
    What is a horizontal merger?
    • A. 

      When two or more firms that produce the same kind of product join

    • B. 

      When two or more firms that produce a different kind of product join

    • C. 

      When three or more firms that produce the same kind of product join

    • D. 

      When three of more firms that produce a different kind of product join


  • 64. 
    What is a vertical merger?
    • A. 

      When three or more firms involved in the same steps of manufacturing or marketing join

    • B. 

      When two or more firms involved in the same steps of manufacturing or marketing join

    • C. 

      When three or more firms involved in different steps of manufacturing or marketing join

    • D. 

      When two or more firms involved in different steps of manufacturing or marketing join


  • 65. 
    What does the word utility mean?
    • A. 

      Ability of capacity of a good or service to be used in the manufacturing of a product

    • B. 

      Lack of capability a good or service might have to be used in the manufacturing of a product

    • C. 

      Ability or capacity of a good or service to be useful and give satisfaction to someone

    • D. 

      Lack of capability a good or service might have to be useful and give satisfaction to someone


  • 66. 
    What is a fixed cost?
    • A. 

      Cost of production that changes when output changes

    • B. 

      Cost of purchasing that does not change when output changes

    • C. 

      Cost of production that does not change when output changes

    • D. 

      Cost of purchasing that changes when output changes


  • 67. 
    What is variable cost?
    • A. 

      Cost that varies as output changes

    • B. 

      Cost that does not vary as output changes

    • C. 

      Cost that varies as production changes

    • D. 

      Cost that does not vary as output changes


  • 68. 
    What is total cost?
    • A. 

      Variable plus fixed cost

    • B. 

      All cost associated with production

    • C. 

      All cost except for the cost of manufacturing

    • D. 

      A and b


  • 69. 
    What are marginal costs?
    • A. 

      Extra cost of pruducing one additional unit of production

    • B. 

      Additional cost associated with lack of demand

    • C. 

      Cost above and beyond normal associated costs

    • D. 

      Cost formed by excess production


  • 70. 
    What is the SEC?
    • A. 

      Securities and Exchange Commission

    • B. 

      Safety and Exemption Committee

    • C. 

      Security of Environment Commission

    • D. 

      Safety of Elephant Cocks


  • 71. 
    What is the FDA?
    • A. 

      Flooding Damage Association

    • B. 

      Federal Drug Administration

    • C. 

      Food and Drug Administration

    • D. 

      Federal Department of Aviation


  • 72. 
    What is the FAA?
    • A. 

      Farm and Animal Association

    • B. 

      Federal Aviation Administration

    • C. 

      Federal Armory Association

    • D. 

      Farming and Aviation Administration


  • 73. 
    What is the FCC?
    • A. 

      Foreign Counsel Committee

    • B. 

      Federal Currency Commission

    • C. 

      Foreign Currency Commission

    • D. 

      Federal Communications Commission


  • 74. 
    What was the Sherman Anti-trust Act?
    • A. 

      An act which put in place the monopolistic ideals of many buisnesses today

    • B. 

      An act to protect trade and commerce against unlawful restraint and monopoly

    • C. 

      An act that abolished the right to trade with foreign countries anything that was made on U.S soil

    • D. 

      An act that caused trade and commerce to nearly cease


  • 75. 
    What is a durable good?
    • A. 

      Any good that lasts three years or more when used on a regular basis

    • B. 

      Any good that last ten years or more when used on a regular basis

    • C. 

      Any good that lasts three years or more when not used

    • D. 

      Any good that lasts ten years or more when not used


  • 76. 
    What is a non-durable good?
    • A. 

      Any good that when used on a regular basis lasts less than ten years

    • B. 

      Any good that when not used lasts less than three years

    • C. 

      Any good that when used on a regular basis lasts less than three years

    • D. 

      Any good that when not used last less than ten years


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