Economics Semester Exam Latest 2022

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Which of the following is considered a natural resource? - ANSWER Water A business produces picnic tables and benches. The business currently produces 20 tables and 10 benches per week. An increase... in demand for benches has the business considering a change to 15 tables and 15 benches per week. What is the trade-off the business must make? - ANSWER The choice between the net profit of the new production schedule and the net profit of the old production schedule How can a community manage its factors of production to ensure continued availability of labor? - ANSWER Provide proper wages and access to public goods A consumer must decide between purchasing a new television or a new computer. If the consumer chooses the television, then what is the opportunity cost of this decision? - ANSWER The opportunity cost is the consumer's benefit from purchasing the computer. Mixed Economy - ANSWER An economy that takes elements from both a market economy and a command economy to allocate resources and determine the production of goods and services Traditional Economy - ANSWER An economy where culture determines both the allocation of resources and the production of goods and services Command Economy - ANSWER An economy where a central government determines both the allocation of resources and the production of goods and services Market Economy - ANSWER An economy where price signals, resulting from supply and demand forces within the economy, determine the allocation of resources and the production of goods and services Why does the government oversee the provision of public goods? - ANSWER Public goods are goods and services that are non-excludable and non-rivalrous; therefore, it is not profitable or in the best interest of private businesses to provide these goods. In the circular flow diagram, what do firms receive from product markets? - ANSWER Revenue For a relatively elastic portion of a demand curve, a 100%100% increase in price will be accompanied by _____. - ANSWER A percent decrease in quantity demanded greater than 100% If income levels of consumers within a given economy increase, what would happen to the demand curve for cell phones, a normal good, and the demand curve for instant noodles, an inferior good? - ANSWER The demand curve for cell phones would shift to the right, and the demand curve for instant noodles would shift to the left. At what output level should a perfectly competitive firm choose to produce at? - ANSWER The firm should choose to produce 1,200 units of output. Which two programs best boost capital accumulation in the economy and incentivize commerce? Why does the government contribute so significantly to these services? - ANSWER Education and roadways best boost capital accumulation in the economy and incentivize commerce. The government contributes so significantly to these services to guarantee access regardless of income, providing a safety net. Which of the following is a primary difference between a privately held corporation and a public corporation? - ANSWER Shares of public corporations are traded on stock exchanges. Give an example of one way that a local government could pass a law that would both help a local business and hurt the same local business. - ANSWER A local government could add a sales tax and use the new revenue to beautify the area around the business. What is true about money? - ANSWER Money maintains purchasing power over time. What impacts did the decentralization of the U.S. banking system during the Free Banking Era have on the currency in the United States? Select the two correct answers. - ANSWER The purchasing power currencies issued by state banks varied wildly from state to state. Monetary reserves decreased. An investor purchased 50 shares of stock in a company in 2015. At the time the investor purchased the stock, the value of the stock was priced at $5$5 per share. The investor sold all 50 shares of stock in 2019. The value of the stock at the time of sale was $6.50$6.50 per share. What is the capital gain the investor earned on this investment? - ANSWER $75 Using the expenditure approach, the Real GDP of a given economy was calculated as 250 million dollars in 2019. In 2020, the economy experienced the following: * An increase of 20 million dollars in compensation * A decrease of 5 million dollars in investment. * An increase of 10 million dollars in government spending. * The value of all exports decreased by 5 million dollars. * The value of all imports increased 15 million dollars. What is the Real GDP of the given economy in 2020? - ANSWER 255 million dollars Which type of unemployment is the product of a healthy economy? - ANSWER Unemployment as a result of people moving from one job to another. What is true about human capital? - ANSWER Improvements to human capital leads to improvements in productivity and improvements in standard of living. How does Medicaid compare to Medicare? Explain. - ANSWER Medicaid is funded by state and federal governments and provides health coverage based on financial need. Medicare is a federal government health-care insurance program for people 65 years or older and those with certain disabilities under age 65. Were Social Security and Medicare the largest contributors of revenue for the federal government in Fiscal Year 2019? Explain. - ANSWER No, because individual income taxes contributed about $1.718 trillion in Fiscal Year 2019 while Social Security and Medicare taxes only contributed $1.242 trillion. What is the discount rate? - ANSWER The discount rate is the interest rate at which the Federal Reserve charges to financial institutions on loans issued at the discount window. What monetary policies should the Federal Reserve enact to combat higher inflation rates for consumer goods and services? - ANSWER Enact contractionary monetary policies to decrease the money supply. If Country A uses all of the resources at its disposal, it can produce a maximum of 500 watches or 200 televisions. Within the same time frame, if Country B uses all of its resources, it can produce a maximum of 200 watches or 100 televisions. Which of the following must be true? - ANSWER Country A has the absolute advantage and the comparative advantage in watch production. Which of the following will likely occur if Israel imposes a quota on automobiles imported from the United States? - ANSWER Israeli consumers will purchase fewer automobiles, and Israeli producers will manufacture more automobiles. Which of the following resulted from the recent renegotiation of NAFTA? - ANSWER Agricultural trade was improved across all member nations. The United Kingdom currently has a trade deficit with New Zealand. If the U.K. pound sterling appreciates relative to the New Zealand dollar, which of the following correctly explains the effect on the trade deficit? - ANSWER The trade deficit will increase, since an appreciating pound means more goods will be imported from New Zealand. What is an example of a successful free market economy? - ANSWER Hong Kong Which of the following trade policies is a protectionist least likely to support? - ANSWER Trade unions [Show More]

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