Economics 6 - 9 Test

What type of economic system is based upon custom, heredity, and caste?

• Command

• Free enterprise

• Mixed

• Traditional

What is the study of the choices that individuals and societies make in the production, distribution, and consumption of goods?

What is a list of numbers that compares price with quantity demanded?

If Firm A can produce 50 shoes or 40 coats with the same amount of resources from which Firm B can produce 45 coats or 65 shoes, which firm has the comparative advantage in coats?

What governmental agency investigates trade practices?

What was the first act implemented in 1890 to regulate monopolistic trusts?

What antitrust act was passed in 194 that addressed practices not addressed in earlier laws?

What three things is mass production based on?

What is the production of goods in which a country or region has absolute or comparative advantage?

What do consumers send to producers to let them what goods are wanted at what prices?

What term deals with the study of specific components within a major economy?

A natural monopoly occurs when a single firm can fill the demand for a good more efficiently.

• True

• False

Supply is the relationship between a goods price and the amount that producers are willing to make available.

• True

• False

Proficiency is the quality of producing effectively with a minimum of waste.

• True

• False

What type of investment allows an individual to receive a fixed amount of dividends before other investors?

• Common stock

• Preferred stock

• Bonds

• Mutual funds

What did the apostle Paul say was the root of all evil?

What term refers to one who borrows money?

What term refers to one who lends money or capital?

What corporation created by Congress insures the money in each type of bank account?

What United States Department is responsible for coining and printing American money?

What is legal tender that is backed by only a government's promise?

What does CD stand for? (and no I don't mean Compact Disc)

The three main components of the Federal Reserve System are the Federal Open Market Committee, the Federal Reserve banks, and the Board of Governors.

• True

• False

Throughout history, many governments have deflated their currencies by adding lead, copper, and iron to gold and silver coins.

• True

• False

Which group favored a "natural economy"?

• Imperialists

• Protectionists

• Physiocrats

• Mercantilists

What type of economic system is controlled by a centralized authority?

• Command

• Free enterprise

• Mixed

• Traditional

What is a group of firms that produce similar products or provide similar services?

• Industry

• Enterprise

• Business

• Union

When the demand for a good increases, the good's equilibrium price tends to increase.

• True

• False

The value of a good varies according to its utility and its scarcity.

• True

• False

The total cost is the sum cost of all the factors of production used in making goods.

• True

• False

A service is a tangible item for which people will pay.

• True

• False

A consumer is an individual who provides goods.

• True

• False

What quality should money possess that shows its stability in value.

• Constancy

• Divisibility

• Durability

• Portability

The U.S. money supply is managed by the Treasury Department.

• True

• False

When too much money is in circulation, the result is inflation.

• True

• False

Absolute advantage is the ability of an entity to produce a good or provide a service at an opportunity cost that is lower than that of another producer.

• True

• False

The result of a price ceiling would be a shortage.

• True

• False

What type of investment allows an individual to vote at company meetings?

• Common stock

• Preferred stock

• Bonds

• Mutual funds

What are the three principal purposes of money?

• Return rate

• Medium of exchange

• Become investor savings

• Provide a measure of value

• Allow for investments

• Provide a store of value

Select the characteristics of the Perfect Competition Model

• Significant entry barriers

• Produce a standardized Product

• No close substitutes for a firm's product

• Large number of independent buyers and sellers

In market economies, most of the savings needed to fund R&D comes from the public sector.

• True

• False

What type of good does not last more than three years?

• Inferior good

• Non-durable good

• Normal good

• Durable good

Select each characteristic featured in an Oligopoly.

• Produce a standardized product

• Few firms in entire industry

• Significant entry barriers

• Large number of firms

What is the value asserted to the worth of a coin or bill?

• Absolute value

• Face value

• Intrinsic value

• Constant value

What states that when the price of a good falls, consumers tend to buy more of that good?

• Elasticity effect

• Substitute effect

• Income effect

• Demand effect

If the supply of tennis rackets increased while the demand remained steady, stores would likely increase the prices of rackets.

• True

• False

If Gordon McConnell's accounting business had expenses equaling $90,000 and revenues totaling $115,000 last year, but could have had a salary of $80,000 working for someone else, what was his opportunity cost?

• $45,000

• $55,000 $55,000

• $105,000

• $125,000

What is the American automobile industry an example of?

• Perfect competition

• Monopoly

• Monopolistic competition

• Oligopoly