AnswersSEPHS - SOC240 - Economics FallCumulative Exam

Cumulative Exam — Cumulative exam Answers

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How does a socialist government with a command economy manage its economy?

A
The government lets producers set wages for workers.
B
The government owns all homes and other forms of housing.
C
The government allows consumers to make their own choices.
D
The government controls factories and other forms of production.
2
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What do the indicators used by economists reveal?

A
changes in production and demand
B
changes in employment levels
C
changes in prices
D
changes in the health of an economy
3

When it spends money on education, a government is trying to

A
find a way to meet a social need.
B
encourage immediate economic growth.
C
meet a social need and improve the economy.
D
find a way to spend budget surpluses.
4

Why do most nations use fiat money today?

A
Governments are able to exert control over the value of fiat money.
B
Fiat money is stable and will not lose value during economic downturns.
C
Fiat money will maintain its value despite fluctuating exchange rates.
D
Governments know that fiat money derives its value from gold and silver.
5

Which occurs during disequilibrium? Check all that apply.

A
Supply and demand meet.
B
Supply is less than demand.
C
Supply and demand set prices.
D
Supply is greater than demand.
E
Supply and demand set production.
6

The chart shows the marginal cost of producing apple pies.This chart demonstrates that the marginal cost

Question illustration
A
initially decreases as production increases.
B
initially increases as production increases.
C
eventually decreases as production increases.
D
eventually increases as production decreases.
7

What is the best definition of profit?

A
Profit is the possible income from producing an additional item.
B
Profit is the price of producing one additional unit of a good.
C
Profit is the additional income gained from selling an additional good.
D
Profit is the financial gain from business activity minus expenses.
8

Which are indicators that economists use to measure how an economy grows? Select two options.

A
monitoring election results
B
measuring how much the economy produces
C
monitoring the popularity of different music groups
D
studying the economy of another country
E
tracking the unemployment rate
9

Economists use changes in GDP to measure

A
the balance of trade with other countries.
B
any economic growth or shrinkage.
C
the causes of unemployment.
D
the distances between cities.
10

President Roslin of Country XYZ knows that a new policy is needed to help solve the problem of rising unemployment in her nation. Her next step is to

A
develop a plan.
B
implement a plan.
C
identify the problem.
D
solve the problem.
11

Jacob is considering buying a new car. Which nonrenewable resource should influence the decision?

A
labor
B
water
C
minerals
D
petroleum
12

Which best defines a service?

A
a task that is performed in exchange for payment
B
an object that is acquired
C
a plan that is executed
D
an image that is drawn
13

The graph shows a point of equilibrium.What is the price at which equilibrium is achieved?

Question illustration
A
$8
B
$9
C
$10
D
$30
14

Look at the following chart.

Question illustration
A
analyzing the climate to see which fruit would grow better.
B
studying the profitability of growing apples versus oranges.
C
researching what competitors are doing.
D
choosing to grow both fruit varieties or only apples.
15

The Fed may respond to a recession by

A
discouraging consumer borrowing.
B
decreasing interest rates.
C
decreasing government spending.
D
decreasing available credit.
16

What is true of the M1 category of money?

A
It is not usually in circulation.
B
It cannot be quickly exchanged.
C
It can be easily liquidated.
D
It is in investment accounts.
17

[BLANK]

A
indexes
B
quotes
C
futures
D
trades
18

It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________.

A
opportunity cost; production cost
B
production cost; resource cost
C
production cost; opportunity cost
D
resource cost; production cost
19

The graph shows a demand curve with the price of a good compared to the quantity demanded.What does this graph demonstrate?

Question illustration
A
the amount of microwaves produced increases the price
B
the amount of microwaves produced decreases the price
C
the price decreases with a larger quantity demanded
D
the price increases with a larger quantity demanded
20

Corporate taxes are a type of

A
income tax.
B
property tax.
C
sales tax.
D
excise tax.

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