 1.

What is Economics?
Discuss

o A.

The study of how people try to satisfy what appears to be seemingly unlimited
and competing for wants through the careful use of relatively scarce resources

o B.

Employment, gross domestic product, inflation, economic growth, and the

distribution of income

o C.

Deals with behavior and decision making by small units, such as individuals and
firms

o D.

A rise in the general level of prices occurs, workers need more money to pay for
good clothing and shelter

 2.
What is Scarcity?
Discuss

o A.

Giving something up to have something else

o B.

Extra cost of producing one additional unit of production

o C.

The condition that results from society not having enough resources to produce
all the things people would like to have

o D.

A rise in the general level of prices occurs, workers need more money to pay for
good clothing and shelter
 3.
What are the three basic economic questions?
Discuss

o A.

What, where, whom

o B.

What, how, whom

o C.

How, whom, when

o D.

What, why, whom

 4.
What are the four factors of production?

o A.

Land, capital, money, entrepreneurs

o B.

Land, capital, labor, entrepreneurs

o C.

Capital, money, supply, demand

o D.

Labor, capital, supply, demand

 5.
Definition of Land?
Discuss

o A.
 Anything from the earth

o B.

The space we occupy

o C.

Gifts of nature

o D.

All of the above

 6.
Definition of Capital?

o A.

The tools, equipment used in the production of goods

o B.

The machinery, and factories used in the production of goods

o C.

The tools, and machinery used in the production of goods

o D.

A and B

o E.

B and C

 7.
Definition of Labor?

o A.

People with all of the efforts, abilities, and skills

o B.
 The people who are for hire for work

o C.

People with all of the workmanship, skills, and work

o D.

The act of performing work at any given time

 8.
Definition of Entrepreneur?
Discuss

o A.

A risk taker in search of profits who's initial investment must be returned

o B.

An investor in search of profits who does something new with existing resources

o C.

A investor in search of profits who's initial investment must be returned

o D.

A risk taker in search of profits who does something new with existing resources

 9.
What are the many payments for the factors of productions called?

o A.

Land - wages, labor - interest, capital - rent, entrepreneurs - profit

o B.

Land - rent, labor - wages, capital - interest, entrepreneurs - profit

o C.

Land - profit, labor - rent, capital - wages, entrepreneurs - interest

o D.
 Land - interest, labor - rent, capital - profit, entrepreneurs - wages

 10.
What is opportunity cost?
Discuss

o A.

The cost assosiated with any opportunity

o B.

Giving the cost in order to have the opportunity

o C.

The cost required in order to succeed

o D.

Giving something up to have something else

 11.
What is PPF?

o A.

Possible Production Frontier

o B.

Production Possibilities Frontier

o C.

Probable Projection Frontier

o D.

Projected Possibilities Frontier

 12.
What do the points along the frontier represent?

o A.
 A Maximum combination of output if all resources are fully employed

o B.

A minimum combination of output if all resources are fully employed

o C.

A Maximum combination of input if all resources are fully employed

o D.

A Minimum combination of input if all resources are fully employed

 13.
On the PPF how can a nation achieve growth?

o A.

By having more resources or increased productivity

o B.

By having an increase in supply and demand

o C.

By having less resources or declined productivity

o D.

By having an increase in resources and decrease in productivity

 14.
What does a point inside the curve on a PPF represent?

o A.

Production at greater than its minimum potential

o B.

Production as less than its minimum potential

o C.
 Production at greater than its maximum potential

o D.

Production as less than its maximum potential

 15.
What is the classic example of a PPF?
Discuss

o A.

A mythical country called omega producing two goods, guns:butter

o B.

A mythical country called alpha producing two goods, bread:butter

o C.

A mythical country called omega producing two goods, bread:butter

o D.

A mythical country called alpha producing two goods, guns:butter

 16.
What is the circular flow model?

o A.

A model which shows the wealth that an economy generates

o B.

A model which shows the wealth that the world generates

o C.

A model that shows the recirculation of money in an economy

o D.

A model that shows the debt that an economy generates

 17.
 What are the functions of the entrepreneur?
Discuss

o A.

They provide the money necessary for the resources of land, labor, and capital

o B.

They provide the procedures that combine the resources of land, labor, and
capital into new products

o C.

They provide the initiative that combines the resources of land, labor, and capital
into new products

o D.

They provide the drive necessary for the resources of land, labor, and capital

 18.
Name three types of businesses

o A.

Traditional, command, market

o B.

Command, market, competitive

o C.

Traditional, market, competitive

o D.

Command, traditional, competitive

 19.
Name the types of businesses

o A.

Proprietorship, corporation, industrial

 o B.

Partnership, industrial, commercial

o C.

Corporation, proprietorship, commercial

o D.

Proprietorship, partnership, corporation

 20.
Define paradox of value?
Discuss

o A.

The apparent contradiction between the low value of nonessentials and high
value of essentials

o B.

An Apparent agreement about the nonessentials being less needed and the
essentials being greatly needed

o C.

The apparent contradiction between the high value of nonessentials and low
value of essentials

o D.

Apparent agreement about the nonessentials being greatly needed and the
essentials being less needed

 21.
What is the classic example of paradox of value?
Discuss

o A.

Water in great excess being worth less than diamonds in scarce excess being
worth more

o B.
 Water in scarce excess being worth more than diamonds in great excess being
worth less

o C.

Water in great excess being worth more than diamonds in scarce excess being
worth less

o D.

Water in scarce excess being worth less than diamonds in great excess being
worth more

 22.
What are the goals of the American Free Enterprise?

o A.

Economic freedom, voluntary exchange, private property rights, profit motive,

and competition

o B.

Economic freedom, lack on monopolies, private property rights, profit motive, and
competition

o C.

Economic freedom, voluntary exchange, prevailence of rights, profit motive, and

competition

o D.

Economic freedom, voluntary exchange, private property rights, profit margain

reduction, and competition

 23.
What is the law of demand?
Discuss

o A.

Rule stating that the quantity demanded of a good or service does not vary with
its availability

o B.
 Rule stating that the quantity demanded of a good or service does not vary with
its price

o C.

Rule stating that the quantity demanded of a good or service varies inversely
with its availability

o D.

Rule stating that the quantity demanded of a good or service varies inversely
with its price

 24.
What is the law of supply?

o A.

The principle that suppliers will normally offer less for sale at high prices and
more at lower prices

o B.

The principle that suppliers will normally offer more for sale at high prices and
less at lower prices

 25.
What causes the demand curve to shift?
Discuss

o A.

The increase/decrease in need

o B.

The increase/decrease in volume

o C.

The increase/decrease in price

o D.

The increase/decrease in production

 26.
What causes the increase in supply?
Discuss

o A.

The increase/decrease in demand

o B.

The increase/decrease in production

o C.

The increase/decrease in volume

o D.

The increase/decrease in price

 27.
What is equilibrium?
Discuss

o A.

A situation in which prices are very unstable

o B.

A situation in which prices are very unreliable

o C.

A situation in which prices are relatively stable

o D.

A situation in which prices always fluctuate

 28.
What is Shortage?
Discuss

o A.
 A situation in which the quantity demanded is greater than the quantity supplied
at a given price

o B.

A situation in which the quantity demanded is less than the quantity supplied at a
given price

o C.

A situation in which the quantity demanded is not offered by the manufacturer

o D.

A situation in which the quantity demanded can not meet the supply provided

 29.
What is Surplus?
Discuss

o A.

A situation in which the quantity supplied is not met by the manufacturer

o B.

A situation in which the quantity demanded is greater than the quantity

demanded at a given price

o C.

A situation in which the quantity supplied is less than the quantity demanded at a
given price

o D.

A situation in which the quantity supplied is greater than the quantity demanded
at a given price

 30.
What is a price ceiling?
Discuss

o A.

A minimum legal price in order to maintain agreement

 o B.

A maximum legal price in order to maintain agreement

o C.

A maximum legal price that can be charged for a product

o D.

A minimum legal price that can be charged for a product

 31.
What is a price floor?
Discuss

o A.

Highest legal price that can be paid for a good or service

o B.

Lowest legal price that can be paid for a good or service

o C.

Highest legal price that can be charged in order to maintain agreement

o D.

Lowest legal price that can be charged in order to maintain agreement

 32.
What is elastic?

o A.

When a given change in price causes a relatively larger change in quantity

demanded

o B.

When a given change in quantity demanded causes a relatively larger change in

price

o C.
 When a given change in price causes a relatively smaller change in quantity
demanded

o D.

When a given change in quantity demanded causes a relatively smaller change

in price

 33.
What is inelastic?
Discuss

o A.

When a given change in quantity demanded causes a relatively smaller change

in price

o B.

When a given change in price causes a relatively larger change in the quantity
demanded

o C.

When a given change in price causes a relatively smaller change in the quantity
demanded

o D.

When a given change in quantity demanded causes a relatively larger change in

price

 34.
What is unit elastic?
Discuss

o A.

If change in quantity demanded causes a proportional change in price

o B.

If change in price does not cause a proportional change in quantity demanded

o C.
 If change in price causes a proportional change in quantity demanded

o D.

If change in quantity demanded does not cause a proportional change in price

 35.
If prices and revenue move in opposite directions demand is?
Discuss

o A.

Increased

o B.

Decreased

o C.

Unit elastic

o D.

Unit inelastic

 36.
What is microeconomics?

o A.

The area of economics that deals with the behavior and decision making by
small units

o B.

The area of economics that deals with the behavior and decision of the whole
world

o C.

The branch of economics that deals with the economy as a whole

o D.

The branch of economics that deals with the monetary value

 37.
What is macroeconomics?
Discuss

o A.

The branch of economics that deals with the monetary value

o B.

The area of economics that deals with behavior and decision making by small
units

o C.

The branch of economics that deals with the economy as a whole

o D.

The are of economics that deals with the behavior and decision making of your
personal life

 38.
What is a collusion?
Discuss

o A.

A formal agreement to set prices or to otherwise behave in a cooperative manner

o B.

An agreement to have a meeting discussing prices

o C.

An informal agreement to set prices or to otherwise behave in a uncooperative

manner

o D.

A disagreement upon having a meeting discussing prices

 39.
 What are the three functions of money?
Discuss

o A.

Measure of value, store of value, and direction of value

o B.

Medium of exchange, measure of value, and store or value

o C.

Measure of value, medium of exchange, and compliance of value

o D.

Medium of exchange, store of value, direction of value

 40.
What is commodity money?
Discuss

o A.

Money that has a primary value in being a commodity

o B.

Money that has been borrowed from the bank as a loan

o C.

Money that has an alternative use as an economic good, or commodity

o D.

Money that has an alternative use as a external way of paying for goods or
services

 41.
What is the FED

o A.

The central bank

 o B.

The federal bank

o C.

The commision bank

o D.

The world bank

 42.
What is the FOMC?

o A.

Federal Opinion Money Committee

o B.

Federal Open Minded Committee

o C.

Federal Open Market Committee

o D.

Federal Option Money Committee

 43.
How many district banks?

o A.

13

o B.

12

o C.

22
 o D.

16

 44.
What are the three tools of the FED?
Discuss

o A.

Open market operations, discount rate, and reserve requirement

o B.

Open market operations, increased rate, and reserve requirement

o C.

Closed market operations, increased rate, and reserve requirement

o D.

Closed market operations, discount rate, and reserve requirement

 45.
Who is the chairman of the FED?
Discuss

o A.

Bob Bernanke

o B.

Ben Bernanke

o C.

Big Bird Bernanke

o D.

Bubba Sparks Bernanke

 46.
 What is inflation?
Discuss

o A.

A fall in the general level of prices occurs, workers need more money to pay for
goods, clothing, and shelter

o B.

A rise in the general level of prices occurs, workers need less money to pay for
goods, clothing and shelter

o C.

A fall in the general level of prices occurs, workers need less money to pay for
goods, clothing and shelter

o D.

A rise in the general level of prices occurs, workers need more money to pay for
goods, clothing, and shelter

 47.
What is recession?

o A.

A period during which real GDP increases for 2 quarters in a row, or 6

consecutive months

o B.

A period during which real GDP declinces for 6 quarters in a row, or 2

consecutive months

o C.

A period during which real GDP declines for 2 quarters in a row, or 6 consecutive
months

o D.

A period during which real GDP increases for 6 quarters in a row, or 2

consecutive months

 48.
 What is "tight money" policy?
Discuss

o A.

The FED restricts the growth of the money supply, which drives interest rates up

o B.

The FED allows the growth of the money supply, which drives the interest rates
down

o C.

The FED restricts the growth of the money supply, which drives the interest rates
down

o D.

The FED allows the growth of the money supply, which drives the interest rates
up

 49.
What is a business cycle?

o A.

Small systematic ups and downs of real GDP

o B.

Small inverse ups and downs of real GDP

o C.

Largely systematic ups and downs of real GDP

o D.

Largely inverse ups and downs of real GDP

 50.
What are the 4 stages of a business cycle?

o A.
 Peak, trough, expansion, recovery

o B.

Recession, peak, trough, expansion

o C.

Recession, peak, trough, recovery

o D.

Peak, recession, recovery, expansion

 51.
Name the three types of taxes?

o A.

Proportional, proposed, regressive

o B.

Regressive, proportional, probable

o C.

Regressive, retaining, proposed

o D.

Progressive, proportional, regressive

 52.
What are the two principles of taxation?

o A.

Ability-to-pay, determination

o B.

Benefit, ability-to-pay

o C.
 Profit, productivity

o D.

Projection, benefit

 53.
What is personal income tax?
Discuss

o A.

The total amount of income going to consumers before individual income taxes
are subtracted

o B.

The total amount of income going to consumers after individual income taxes are
subtracted

o C.

A portion of the amount of income going to consumers after individual taxes are
subtracted

o D.

A portion of the amount of income going to comsumers befoe individual taxes are
subtracted

 54.
What does the word "Laissez Faire" mean?
Discuss

o A.

The philosophy that government should not interfere with business activity

o B.

The law stating that the government can at any time interfere with a businesses
activity

o C.

The philosophy that individuals should not interfere with government activity
 o D.

The law stating that the government cannot at any time interfere with a
businesses activity

 55.
What is the law of variable proportions?

o A.

States that in the long run, input will change as one output varies while the others
are held constant

o B.

States that in the short run, input will change as one output varies while the
others are held constant

o C.

States that in the short run, output will change as one input varies while the
others are held constant

o D.

States that in the long run, output will change as one input varies while the others
are held constant

 56.
What is the civilian labor workforce?
Discuss

o A.

Men and women 16 years old and over who are not working or cannot get a job

o B.

Men and women 18 years old and over who are either working or actively looking
for a job

o C.

Men and women 18 years old and over who are not working or cannot get a job

o D.
 Men and women 16 years old and over who are either working or actively looking
for a job

 57.
Who is excluded from the civilian labor workforce?

o A.

Government officials, prison population, and armed forces

o B.

Armed forces, prison population, and other institutionalized persons

o C.

Government officials, institutionalized persons, and armed forces

o D.

Prison population, non-us citizens, and armed forces

 58.
Define merger?

o A.

A combination of two or more buisnesses to form a single firm

o B.

A combination of three or more buisnesses to form a single firm

o C.

A combination of four of more buisnesses to form a single firm

 59.
What is a horizontal merger?

o A.

When two or more firms that produce the same kind of product join

o B.
 When two or more firms that produce a different kind of product join

o C.

When three or more firms that produce the same kind of product join

o D.

When three of more firms that produce a different kind of product join

 60.
What is a vertical merger?
Discuss

o A.

When three or more firms involved in the same steps of manufacturing or

marketing join

o B.

When two or more firms involved in the same steps of manufacturing or

marketing join

o C.

When three or more firms involved in different steps of manufacturing or

marketing join

o D.

When two or more firms involved in different steps of manufacturing or marketing

join

 61.
What does the word utility mean?

o A.

Ability of capacity of a good or service to be used in the manufacturing of a

product

o B.

Lack of capability a good or service might have to be used in the manufacturing

of a product
 o C.

Ability or capacity of a good or service to be useful and give satisfaction to

someone

o D.

Lack of capability a good or service might have to be useful and give satisfaction
to someone

 62.
What is a fixed cost?

o A.

Cost of production that changes when output changes

o B.

Cost of purchasing that does not change when output changes

o C.

Cost of production that does not change when output changes

o D.

Cost of purchasing that changes when output changes

 63.
What is variable cost?

o A.

Cost that varies as output changes

o B.

Cost that does not vary as output changes

o C.

Cost that varies as production changes

o D.

Cost that does not vary as output changes

 64.
What is total cost?

o A.

Variable plus fixed cost

o B.

All cost associated with production

o C.

All cost except for the cost of manufacturing

o D.

A and b

 65.
What are marginal costs?

o A.

Extra cost of pruducing one additional unit of production

o B.

Additional cost associated with lack of demand

o C.

Cost above and beyond normal associated costs

o D.

Cost formed by excess production

 66.
What is the SEC?
Discuss

o A.
 Securities and Exchange Commission

o B.

Safety and Exemption Committee

o C.

Security of Environment Commission

o D.

Safety of Elephant Cocks

 67.
What is the FDA?

o A.

Flooding Damage Association

o B.

Federal Drug Administration

o C.

Food and Drug Administration

o D.

Federal Department of Aviation

 68.
What is the FAA?

o A.

Farm and Animal Association

o B.

Federal Aviation Administration

o C.
 Federal Armory Association

o D.

Farming and Aviation Administration

 69.
What is the FCC?

o A.

Foreign Counsel Committee

o B.

Federal Currency Commission

o C.

Foreign Currency Commission

o D.

Federal Communications Commission

 70.
What was the Sherman Anti-trust Act?

o A.

An act which put in place the monopolistic ideals of many buisnesses today

o B.

An act to protect trade and commerce against unlawful restraint and monopoly

o C.

An act that abolished the right to trade with foreign countries anything that was
made on U.S soil

o D.

An act that caused trade and commerce to nearly cease

 71.
 What is a durable good?

o A.

Any good that lasts three years or more when used on a regular basis

o B.

Any good that last ten years or more when used on a regular basis

o C.

Any good that lasts three years or more when not used

o D.

Any good that lasts ten years or more when not used

 72.
What is a non-durable good?
Discuss

o A.

Any good that when used on a regular basis lasts less than ten years

o B.

Any good that when not used lasts less than three years

o C.

Any good that when used on a regular basis lasts less than three years

o D.

Any good that when not used last less than ten years