Economics End-of-Course (Final Exam)

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Economics End-of-Course (Final Exam)
Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Which of the following is the kind of decision that can be made at the margin? a. whether or not to hire new workers b. whether or not to go on a vacation c. whether or not to build an extra room on a home d. whether to have a dog or a cat as a pet 2. How would you describe an economy that uses its resources to make the greatest possible number of goods and services? a. efficient c. globally aware b. using opportunity cost well d. underutilized 3. A nation’s automakers install new robotic machinery to build cars. Now, cars take only a day to make, and the factories can produce many more cars than before. This is an example of growth caused by a. land and natural resources. c. technology. b. human capital. d. production possibility curves. 4. What could cause a production possibilities curve to move down and to the left? a. A nation loses land after being defeated in a war. b. A baby boom 20 years ago resulted in a large number of young adults in the population today. c. An increase in the use of computer technology speeds up production. d. Thousands of investors from overseas invest money in a nation’s economy. 5. What is one of the most important advantages of a free market? a. It can change rapidly. c. It is easy to regulate. b. It protects the less fortunate. d. It encourages growth. 6. What might be a hardship for citizens of a centrally planned economy making a transition to a market-based system? a. Farmers would have to grow the crops that the government instructed them to. b. Only poor quality goods would be available to consumers, because manufacturers focused on quantity, not quality. c. Workers would lose job security and guaranteed incomes. d. Entrepreneurs would have fewer opportunities to start new businesses. 7. Which of the following goals is difficult to achieve in a pure free market system? a. economic efficiency c. economic freedom b. economic equity d. economic growth 8. A person believes that real equality can only exist when political equality is coupled with economic equality. This person believes that democratic means should be used to distribute wealth evenly throughout society. This person is a a. socialist. c. capitalist. b. communist. d. authoritarian. 9. What is a positive externality? a. a way to generate trade that will benefit people who are from other countries b. an economic side effect that generates unexpected benefits c. a cash flow that will benefit both the government and the businesses who interact with it d. an extra payment to welfare recipients 1

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____ 10. Which of the following is the best example of a public good? a. highway system c. country club b. shopping mall d. movie theater ____ 11. You will still be able to get public broadcasting whether or not you contribute to their fundraising campaign. You decide not to contribute. This is an example of the a. public good problem. c. externality problem. b. public sector problem. d. free-rider problem. ____ 12. What determines how a change in prices will affect total revenue for a company? a. elasticity of demand c. values of elasticity b. the company’s pricing policy d. the consumers’ incomes ____ 13. What does unitary elastic demand mean? a. The elasticity of demand is mathematically determined. b. The elasticity of demand is different at each unit on the price range. c. The demand is inelastic at a low price but becomes elastic as the price rises. d. The percentage change in quantity demanded is exactly equal to the percentage change in price. ____ 14. What do sellers do if they expect the price of goods they have for sale to increase dramatically in the near future? a. sell the goods now and try to...
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