| A | B |
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| The situation in which some necessities have little value while some non-necessities have a much greater value is known as | paradox of vaule. |
| The study of economics is important because it enables us to | become better decision makers. |
| An economy at its production possibilities frontier is operating | at full potential. |
| The money used to buy the tools and equipment needed for production is known as | finincial capital. |
| DBQ In the time period covered by the production possibilities curve, the company decides to make 4 gallons of red paint. How many gallons of blue paint can the company make with the available time and resoruces? | 2 |
| The purpose of government in a nd economy is to | make major economic decisions. |
| Which group of people ultimately determines the products that a free enterprise economy produces? | consumers |
| The United States can best be described as having a | modified private enterprise system. |
| The government's role in a mixed economy is that it is the | regulator charged with preserving competition. |
| DBQ Based on what you know about historical events, why did government spending per capita increase sharply in the early to mid 1940's, as shown in the graph? | spending on World War II |
| Money loses its value when it | becomes too plentiful. |
| Bonds | pay a fixed interest rate over a specific period of time. |
| DBQ Of the stocks shown in the quotation , whichhad the highest price per share within the last 52 weeks? | ExxonMobile XOM |
| DBQ Suspose you deposited $10 into your savings account each month, as indicated in the table. Your account pays 4%, compounded monthly. How much will you have in your account at the end of 15 years? | $2,461 |
| DBQ Based on the illustration, you would earn more in any of the three retirement plans than you would on basic savings because you would | pay yearly taxes on savings. |
| Economic growth benefits the government by | enlarge the tax base. |
| DBQ Which consumer category in the table experienced the greatest inflation between 1999 and 2001? | medical |
| Unemployment that is directly related to swings in the business cycle is | cyclical unemployment |
| DBQ Which letter on the graph represents a recession in the business cycle? | X |
| DBQ The graph shows that $1 in 1980 could purchase about as much as what amount in 1900? | 10 cents |
| The Fed's Federal Open Market Committee | is the Fed's primary monetary policymaking body. |
| DBQ Which of the following results shouldbe included where the question mark appears in the illustration? | unemployment |
| Today the dominant economic force in the world is | capitalism. |
| Absolute advantage and comparative advantage are terms related to | nations engaged in trade. |
| Trade barriers are enacted to | protect domestic industry. |
| One effect of NAFTA was to | reduce tariffs among the United States, Canada, and Mexico |
| A modified free enterprise economy has all of the following EXCEPT | the guarentee of a job for anyone willing and able to work. |
| The fundamental problem that economics tries to solve is how to | satisfy unlimited wants with limited resources. |
| The free eneterprise economy thrives on all of the following EXCEPT | central government planning |
| The study of the economic behavior of individuals and firms is called | microeconomics. |
| A modest price increase for local cable television service has had little or no effect on the demand, indicating that the demand for the product is | inelastic. |
| At a given price, a surplus occurs when | the quantity supplied is greater than the quantity demanded. |
| Which of the following is NOT a basic economic question? | WHEN to produce |
| What is the fundamental problem of economics? | Scarcity |
| Which of the following lists the four factors of production? | land, labor, capital, entrpreneurs |
| The Law of Demand states that | more will be purchases at low prices than high ones. |
| Buying only one instead of two sodas at lunch time describes what concept? | diminishing marginal utility |
| Which of the following would cause a change in the quantity demanded for a product? | decreasing the price of that product |
| All of the following are examples of comlements EXCEPT | butter and margerine. |
| All ot the following products have reletively inelastic demand EXCEPT | stereo equipment |
| Which product is likely to have the most elastic curve? | ice cream cones |
| In a market economy, a high price is a signal for | producers to produce more and buyer to buy less. |
| If there is a shortage in a market the price is likely to | increase. |
| Which of the following is an example of a price ceiling? | rent control |
| Price ceilings that are artificially low are likely to create | a shortage. |
| Why might a government interfere in a market economy by setting prices? | to achieve the goals of equity and security |
| A monolopy based on the absence of others sellers in a certain location is called | a geographic monolopy. |
| A monolopy's prices are determined by | the monolopy. |
| The government takes part in the United States economy to | all of the above. |
| Paying $1,000 tax on $10,000 of taxable income, $4,000 on $20,000 of taxable income, and $20,000 on $60,0-00 of taxable income in an example of a tax system that is | progressive. |
| The individual income tax ia a(n) | progressive tax. |
| High return on an investment is associated with | high risk. |
| The dilemma faced by the Fed when considering monetary policy is the choice between | inflation and interest rates. |
| Foreign exchange is necessary in international trade because | each country has its own monetary system. |
| Which of the following is NOT an important characteristic of the free enterprise economy? | government intervention |
| A risk-taker in search of profits is known as a(n) | entrepreneur. |
| Which term best describes the consumer act of replacing one item with another less costly item? | substitution effect |
| An advantage of mutual fund for small investor is the | ability to diversify an investment |
| Tools that the Fed can use to conduct monetary policy include all of the following EXCEPT | Regulation Z |
| What would the resume contain that indicates potential future income? | College degree |
