American Social Issues - Economics - Overla
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Questions and Answers
- 1.
A local grocery store orders 200 cases of Pepsi each week and sells them at a price of $6.00 per case. At the end of the first week, they hace only sold 160 cases. What economic situation is the grocery store facing and what will have to happen to price in order for equilibruim to be attained?
- A.
Surplus; price will rise.
- B.
Surplus; price will fall
- C.
Shortage; price will rise
- D.
Shortage; price will fall
- E.
Nothing since the market is in equilibrium
Correct Answer
B. Surplus; price will fallExplanation
The grocery store is facing a surplus situation because they have ordered more cases of Pepsi than they have sold. In order to attain equilibrium, the price will have to fall. This is because the surplus indicates that there is an excess supply of Pepsi, and in order to encourage more sales and reduce the surplus, the store will need to lower the price. By lowering the price, it becomes more attractive to consumers and they are more likely to purchase the remaining cases, bringing the market back into equilibrium.Rate this question:
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- 2.
Which of the following can lead to an increase in the supply for good X?
- A.
A decrease in the number of sellers of good X.
- B.
An increase in the price of inputs used to make good X.
- C.
An increase in consumers' income, assuming good X is a normal.
- D.
Both A and B
- E.
None of the above
Correct Answer
D. Both A and BExplanation
A decrease in the number of sellers of good X can lead to an increase in the supply of good X because with fewer sellers, there is less competition in the market, allowing the remaining sellers to increase their supply to meet the demand. An increase in the price of inputs used to make good X can also lead to an increase in the supply of good X because higher input costs may incentivize producers to increase their supply in order to maintain their profit margins. Therefore, both A and B can individually lead to an increase in the supply for good X.Rate this question:
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- 3.
An increase in the price of electricity will:
- A.
Increase the demand for kerosene heaters.
- B.
Increase the demand for light bulbs.
- C.
Increase the demand for stereos.
- D.
Increase the demand for TVs.
Correct Answer
A. Increase the demand for kerosene heaters.Explanation
An increase in the price of electricity will lead to higher costs for heating homes, prompting consumers to seek alternative sources of heat. Kerosene heaters are a popular choice as they provide a cost-effective solution for heating. Therefore, an increase in the price of electricity will result in an increased demand for kerosene heaters as people try to reduce their reliance on electricity for heating purposes.Rate this question:
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- 4.
Which of the following events will cause an increase in the market demand for Guinness (a brand of beer)?
- A.
A decrease in the price of Guinness
- B.
An increase in the price of Heineken (another brand of beer)
- C.
An increase in the price of Planters peanuts (a complementary good).
- D.
Both A and B
- E.
None of the above will cause an increase in demand
Correct Answer
D. Both A and BExplanation
A decrease in the price of Guinness and an increase in the price of Heineken will cause an increase in the market demand for Guinness. When the price of Guinness decreases, it becomes more affordable and attractive to consumers, leading to an increase in demand. Additionally, if the price of Heineken increases, consumers may switch to Guinness as a substitute, further increasing the demand for Guinness. Therefore, both A and B are correct as they both contribute to an increase in the market demand for Guinness.Rate this question:
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- 5.
Consists of the production and exchange of goods and services among a group of people.
- A.
Command economy
- B.
Traditional economy
- C.
Market economy
- D.
Economy
Correct Answer
D. EconomyExplanation
The term "economy" refers to the overall system of production and exchange of goods and services within a particular group of people. It encompasses the various economic activities and transactions that take place, such as buying, selling, and trading. The concept of economy is broader than the other options listed, as it includes all types of economic systems, including command, traditional, and market economies. Therefore, "economy" is the correct answer as it encompasses the definition provided in the question.Rate this question:
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- 6.
The following two things are true with this economy: 1. The government passes laws that regulate wages in the economy (minimum wage laws). 2. Businesses within the economy set their own prices This is an example of:
- A.
Mixed economy
- B.
Traditional economy
- C.
Command economy
- D.
Market economy
Correct Answer
A. Mixed economyExplanation
This is an example of a mixed economy because it combines elements of both government regulation and market forces. The government's minimum wage laws regulate wages, indicating some level of government intervention in the economy. On the other hand, businesses are allowed to set their own prices, suggesting the presence of market forces. Therefore, this economy exhibits characteristics of both government control and market freedom, making it a mixed economy.Rate this question:
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- 7.
Person A trades goods and services with Person B. Person B then provides Person A with three pounds of fish. This is an example of:
- A.
Mixed economy
- B.
Traditional economy
- C.
Command economy
- D.
Market economy
Correct Answer
B. Traditional economyExplanation
This scenario exemplifies a traditional economy. In a traditional economy, trade and economic activities are based on customs, traditions, and cultural norms. People exchange goods and services based on long-established practices, rather than relying on market forces or government intervention. In this case, Person A and Person B engage in a direct barter system, trading goods and services without the involvement of a market or central authority.Rate this question:
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- 8.
In this country the government makes ALL the decisions as to what is produced, how much is charged, who gets what is produced, etc. This is an example of
- A.
Mixed economy
- B.
Traditional economy
- C.
Command economy
- D.
Market economy
Correct Answer
C. Command economyExplanation
A command economy is an economic system in which the government has complete control over the production, distribution, and pricing of goods and services. In this type of economy, the government makes all the decisions regarding what is produced, how much it is charged, and who receives the produced goods. It is characterized by central planning and the absence of private ownership.Rate this question:
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- 9.
Bob is a coal miner. He participates a what economic activity level:
- A.
Primary
- B.
Secondary
- C.
Tertiary
- D.
Quaternary
Correct Answer
A. PrimaryExplanation
Bob is a coal miner, which means he is involved in the extraction and production of a natural resource, coal. This aligns with the primary economic activity level, which involves the direct extraction or harvesting of raw materials from the earth. Primary activities are typically associated with industries such as agriculture, mining, fishing, and forestry.Rate this question:
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- 10.
Jean is a veterinarian. She participates at what economic activity level:
- A.
Primary
- B.
Secondary
- C.
Tertiary
- D.
Quaternary
Correct Answer
C. TertiaryExplanation
Jean is a veterinarian, which means she is involved in providing services related to animal healthcare. This falls under the tertiary sector of the economy, which is characterized by the provision of services rather than the production of goods. The primary sector involves the extraction of raw materials, the secondary sector involves manufacturing, and the quaternary sector involves knowledge-based activities. Since Jean is providing veterinary services, she is operating at the tertiary level.Rate this question:
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- 11.
Albert is a carpenter who works in a cabinet makers shop. He participates at what economic activity level:
- A.
Primary
- B.
Secondary
- C.
Tertiary
- D.
Quaternary
Correct Answer
B. SecondaryExplanation
Albert is a carpenter who works in a cabinet makers shop, which indicates that he is involved in the production of goods. The secondary economic activity involves the manufacturing and processing of raw materials into finished products, which aligns with Albert's role as a carpenter in the shop. Therefore, Albert's participation at the secondary economic activity level is the correct answer.Rate this question:
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- 12.
Eli is an investment banker who manages the investment portfolios for a 1/2 dozen large corporations. He participates at what economic activity level:
- A.
Primary
- B.
Secondary
- C.
Tertiary
- D.
Quaternary
Correct Answer
D. QuaternaryExplanation
Eli's role as an investment banker, managing investment portfolios for large corporations, falls under the quaternary economic activity level. The quaternary sector involves activities that focus on the creation, manipulation, and dissemination of knowledge and information. In Eli's case, his work involves analyzing financial data, making investment decisions, and providing financial advice to clients, which all require a high level of expertise and knowledge in the financial sector.Rate this question:
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- 13.
Switch grass is a biodegradable fuel source that is used to produce ethenol. It is a _________________ resource.
- A.
Renewable
- B.
Non-renewable
- C.
Inexhaustible
Correct Answer
A. RenewableExplanation
Switch grass is a renewable resource because it can be replenished or replaced naturally within a relatively short period of time. It is a type of grass that grows quickly and can be harvested multiple times, making it a sustainable fuel source. Unlike non-renewable resources such as fossil fuels, switch grass can be continuously grown and used for the production of ethanol, making it an environmentally friendly and renewable option for fuel production.Rate this question:
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- 14.
Many people are installing geo-thermal units in their homes for heating and cooling purposes. A geo-thermal unit takes energy from inside the earths surface, it is a ___________ resource
- A.
Renewable
- B.
Non-renewable
- C.
Inexhaustible
Correct Answer
C. InexhaustibleExplanation
A geo-thermal unit takes energy from inside the earth's surface, which is an inexhaustible resource. This means that the energy source is virtually limitless and will not run out over time. Unlike non-renewable resources such as fossil fuels, which are finite and will eventually be depleted, the energy from the earth's surface can be continuously utilized without causing depletion or exhaustion. Therefore, installing geo-thermal units is a sustainable and environmentally friendly choice for heating and cooling purposes.Rate this question:
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- 15.
The United States and the rest of the world burn through an incredible amount of oil each year. This is unfortunate because oil is a ______________ resource.
- A.
Renewable
- B.
Non-renewable
- C.
Inexhaustible
Correct Answer
B. Non-renewableExplanation
Oil is a non-renewable resource because it is formed over millions of years from the remains of plants and animals that lived long ago. Once it is extracted and used, it cannot be replaced within a human lifetime. The high demand for oil and its finite supply make it unsustainable in the long run. As a result, it is important to find alternative energy sources and reduce our dependence on oil to preserve the environment and ensure energy security.Rate this question:
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- 16.
The economic system based on private or corporate ownership of, production and distribution is?
- A.
Socialism
- B.
Capitalism
- C.
Feudalism
Correct Answer
B. CapitalismExplanation
Capitalism is the correct answer because it is an economic system where the means of production and distribution are privately or corporately owned. In capitalism, individuals and businesses have the freedom to own and control resources, make decisions about production and distribution, and engage in trade for profit. This system promotes competition, market forces, and the pursuit of individual self-interest, which are key characteristics of capitalism.Rate this question:
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- 17.
This phrase means the government should not interfere in the economy
- A.
Free enterprise
- B.
Freedom speech
- C.
Freedom of the press
Correct Answer
A. Free enterpriseExplanation
The phrase "free enterprise" refers to an economic system where individuals and businesses have the freedom to engage in economic activity without excessive government intervention or control. It emphasizes the idea that the government should not interfere in the economy, allowing individuals to make their own decisions regarding production, distribution, and consumption of goods and services. This concept promotes competition, innovation, and individual economic freedom.Rate this question:
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- 18.
Competition is a feature of
- A.
Socialism
- B.
Capitalism
- C.
Feudalism
Correct Answer
B. CapitalismExplanation
Competition is a feature of capitalism because in a capitalist system, businesses and individuals are motivated to compete with one another in order to gain market share and maximize profits. Competition drives innovation, efficiency, and productivity as businesses strive to offer better products or services at lower prices. In contrast, socialism and feudalism are characterized by different economic systems where competition is either minimized or non-existent. In socialism, the means of production are owned and controlled by the state, and in feudalism, the economy is based on a hierarchical system of land ownership and obligations.Rate this question:
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- 19.
A form of socialism based on the writtings of Marx and Engels that predominated in the former Soviet Union and Eastern Europe at one time and predominates in China and Cuba is
- A.
Feudalism
- B.
Mercantilism
- C.
Communism
Correct Answer
B. Mercantilism -
- 20.
Goods or services that are necessary for living such as food, clothing, shelter are
- A.
Needs
- B.
Wants
- C.
Advertising
Correct Answer
A. NeedsExplanation
The given question is asking for the category that includes goods or services necessary for living such as food, clothing, and shelter. These items are essential for survival and are considered basic requirements for human beings. Therefore, they fall under the category of "needs."Rate this question:
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- 21.
Goods and services that are not necessary for living such as toys, games, entertainment are
- A.
Needs
- B.
Wants
- C.
Advertising
Correct Answer
B. WantsExplanation
Goods and services that are not necessary for living, such as toys, games, and entertainment, fall under the category of wants. Wants are desires or preferences that individuals have, but they are not essential for survival or meeting basic needs. Unlike needs, wants are driven by personal choice and can vary from person to person. Advertising, on the other hand, refers to the promotion of goods and services through various mediums to create awareness and generate demand among consumers.Rate this question:
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- 22.
Many times people think they need things that they in face want due to the power of
- A.
Scarcity
- B.
Advertising
- C.
Distribution
Correct Answer
B. AdvertisingExplanation
Advertising has the power to create a sense of need or desire for certain products or services. It can influence people's perceptions and make them believe that they need something, even if it is not necessarily true. Through persuasive techniques and strategic messaging, advertising can create a sense of scarcity or exclusivity, making people feel like they must have a particular item or experience. This can lead individuals to believe that they need something that they actually just want, based on the influence of advertising.Rate this question:
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- 23.
This is an important part of economics that helps insure people's needs and wants are met
- A.
Scarcity
- B.
Advertising
- C.
Distribution
Correct Answer
C. DistributionExplanation
Distribution is the correct answer because it refers to the process of allocating goods and services to consumers in order to meet their needs and wants. In economics, distribution plays a crucial role in ensuring that resources are distributed efficiently and equitably among individuals and households. It involves various activities such as transportation, warehousing, and retailing, which help to deliver products from producers to consumers. By managing the distribution of goods and services, the economy can better meet the demands of people and ensure that their needs and wants are satisfied.Rate this question:
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- 24.
This refers to how many of a certain good or service are available for people to purchase
- A.
Supply
- B.
Demand
- C.
Price
Correct Answer
A. SupplyExplanation
Supply refers to the quantity of a certain good or service that is available for people to purchase. It represents the amount of a product that producers are willing and able to offer for sale at different prices. The concept of supply is influenced by factors such as production costs, technological advancements, and the availability of resources. In the context of this question, supply is the correct answer as it accurately describes the availability of goods or services for consumers to buy.Rate this question:
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- 25.
Which of these probably has the least affect how well a product sells?
- A.
The quality of the product- how good it is
- B.
How well it is advertised
- C.
Where the employees went to school
Correct Answer
C. Where the employees went to schoolExplanation
The quality of a product and how well it is advertised are both important factors that can significantly impact how well a product sells. However, where the employees went to school is unlikely to have a direct influence on the sales of a product. While education and qualifications are important for certain positions within a company, they do not necessarily determine the success of a product in the market. Other factors such as product features, pricing, customer satisfaction, and market demand are more likely to play a significant role in determining sales performance.Rate this question:
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Apr 16, 2024Quiz Edited by
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Mar 16, 2012Quiz Created by
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