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Q.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

Q.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

Q.3)	What are the three basic economic questions?

A.	What, where, whom

B.	What, how, whom

C.	How, whom, when

D.	What, why, whom

Q.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

Q.5)	Definition of Land?

A.	Anything from the earth

B.	The space we occupy

C.	Gifts of nature

D.	All of the above

Q.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

Q.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

Q.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

Q.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

Q.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

Q.11)	What is PPF?

A.	Possible Production Frontier

B.	Production Possibilities Frontier

C.	Probable Projection Frontier

D.	Projected Possibilities Frontier

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.18)	Name three types of businesses

A.	Traditional, command, market

B.	Command, market, competitive

C.	Traditional, market, competitive

D.	Command, traditional, competitive

Q.19)	Name the types of businesses

A.	Proprietorship, corporation, industrial

B.	Partnership, industrial, commercial

C.	Corporation, proprietorship, commercial

D.	Proprietorship, partnership, corporation

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.35)	If prices and revenue move in opposite directions demand is?

A.

increased

B.

decreased

C.	unit elastic

D.	unit inelastic

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.42)	What is the FED

A.	The central bank

B.	The federal bank

C.	The commision bank

D.	The world bank

Q.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

Q.44)	How many district banks?

A.

13

B.

12

C.

22

D.

16

Q.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

Q.46)	Who is the chairman of the FED?

A.	Bob Bernanke

B.	Ben Bernanke

C.	Big Bird Bernanke

D.	Bubba Sparks Bernanke

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.53)	Name the three types of taxes?

A.	Proportional, proposed, regressive

B.	Regressive, proportional, probable

C.	Regressive, retaining, proposed

D.	Progressive, proportional, regressive

Q.54)	What are the two principles of taxation?

A.	Ability-to-pay, determination

B.	Benefit, ability-to-pay

C.	Profit, productivity

D.	Projection, benefit

Q.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

Q.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

Q.57)	Who is Adam Smith?

A.	A german economist

B.	A sweedish economist

C.	A scottish economist

D.	A english economist

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.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

Q.71)	What is the FDA?

A.	Flooding Damage Association

B.	Federal Drug Administration

C.	Food and Drug Administration

D.	Federal Department of Aviation

Q.72)	What is the FAA?

A.	Farm and Animal Association

B.	Federal Aviation Administration

C.	Federal Armory Association

D.	Farming and Aviation Administration

Q.73)	What is the FCC?

A.	Foreign Counsel Committee

B.	Federal Currency Commission

C.	Foreign Currency Commission

D.	Federal Communications Commission

Q.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

Q.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

Q.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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