c. opening a new store b. applying for a job

Transcription

1 Economics and Economic Decision Making Unit Test One PART I [2 pts. each] Multiple Choice--Write the letter of your choice on the answer sheet. 1) How do consumers exercise their power in the American economy? a. deciding what to purchase c. opening a new store b. applying for a job d. selling their car 2) The money used to buy the tools and equipment needed for production is known as a. the factors of production. c. wealth. b. financial capital. d. capital goods. 3) What is the economic model that illustrates the interdependence of producers and consumers? a. Possible Production Abilities b. Economic Freedoms c. Circular Flow of Economic Activity d. Flow of Economics 4) Which of the following is an example of liquid assets? a. Stocks & bonds b. a Monet painting c. an antique automobile d. mint condition baseball cards 5) A hammer would be considered both a a. durable & consumer good b. durable & capital good c. non-durable & consumer good d. non-durable & capital good 6) The government agency that has the power to regulate the stock market and halt trading is the a. Securities and Exchanges Commission. b. Stocks and Investing Committee. c. Greenspan Inc. d. Corporation Commission. 7) It is illegal to discriminate on the basis of age, sex, race, religion, or disability in employment. This federal law is a way for the United States to achieve which goal? a. Economic Efficiency c. Price Stability b. Economic Security d. Economic Equity 8) The United States can best be described as having a a. pure free enterprise system. b. traditional system. c. command economy. d. modified, or mixed, system. 1

2 9) The purpose of government in a command economy is to a. ensure the availability of consumer products. b. encourage entrepreneurs. c. make major economic decisions. d. promote economic freedom. 10) An economy at its production possibility frontier is operating a. without division of labor. b. as a free enterprise economy. c. at full potential. d. with slow economic growth. 11) In a market economy, people tend to produce according to a. habit and traditions c. needs rather than wants b. government orders d. the profit motive 12) Which of the following would be least important in a traditional economy? a. consumer wants c. habit b. religious rules d. law 13) FDIC, Social Security and Unemployment Insurance all represent the socioeconomic goal of a. Economic Interdependence c. Economic Equity b. Economic Freedom d. Economic Security 14) Which business organization makes up almost three-fourths of all businesses in America but makes approximately five percent of the national cash? a. corporation c. partnership b. franchises d. sole-proprietorship 15) What are the roles of the government in a market economy? a. big brother and big sister b. tax collector and punisher c. consumer, producer, organizer, and friend d. protector, provider, consumer, regulator, and promoter 16) The main difference between communism and capitalism is a. communism cannot be successful b. there are no bureaucratic tie-ups in a capitalist system c. in capitalism private citizens own the productive resources d. that communist led countries never trade with capitalist countries 17) Which of the following business owners can be sued in a court in the United States a. Sole Proprietors b. Partners c. Corporations d. Both a. & b. 2

3 18) Capable of dramatic change in a short time and basic needs of citizens are guaranteed are advantages to what economic system? a. Capitalism c. Market Economy b. Command Economy d. Traditional Economy Use the Economic Model to the right to answer questions 19 & ) The proper labels of boxes A, B, C, and D respectively are a. Consumer, Factor Market Producer, Product Market b. Producer, Product Market, Consumer, Factor Market c. Consumer, Product Market, Producer, Factor Market d. Consumer, Producer, Product Market, Factor Market. C B A 20) Who is the buyer in Box B, and what is purchased? a. Producers buying g&s b. Consumers buying g&s c. Producer buying llc d. Consumers buying llc D Use the NYSE Charts to answer questions ) How many shares were traded on this day? a. 1,018,560,000 b. 7,337,895 c. 3,653,400 d. 5,717,022 22) According to this information, what is the current selling price of this stock? a. $18.53 b. $98.42 c. $ d. $ ) What is the value of the bonus check this corporation shares with its owners? a. $2.80 c. $0 b. $0.43 d. $5.27 3

4 24) The Securities and Exchange Commission a. is the agency that insures savings accounts b. sells securities on the stock exchange c. operates as a money market fund d. administers all federal securities laws 25) People who are bullish on the stock market expect a. stock prices to increase b. stock prices to decrease c. prices in commodities to increase d. an uncertain market 26) Spending money for clothing rather than for a movie is an example of a. trade off b. conspicuous consumption c. opportunity cost d. capital goods Matching-match each numbered description with the lettered item in the word bank. Write the correct letters on your answer sheet. [2 pts. each] Word Bank A. Capital Good B. Command Economy C. Consumer Good D. Corporation E. Dividend F. Factor Market G. Financial Capital H. Market I. Service J. Needs K. Partnership L. Product Market M. Profit Motive N. Revenue O. Scarcity P. Traditional Economy Q. Voluntary Exchange R. Want 27) The condition that results from society not having enough resources to produce all the things people would like to have. 28) A market where productive resources are bought and sold. 29) Work or action performed for someone, usually for money. 30) Items intended for final use by individuals; i.e. Picture Frame 31) The money given to each shareholder as a way of sharing the corporate profits with the owners or stockholders, it is not mandatory. 32) The act of buyers and sellers freely and willingly engaging in market transactions. 33) The driving force that encourages people and organization to improve their material wellbeing. 34) The tools, equipment, or other manufactured goods used to produce other goods and services. 35) The expression of a need. 4

5 Part II Short Answer Sets-Choose 2 of the following short answer sets; write on a separate sheet of paper. Then staple the papers to your answer sheet. [15 pts each] ******WRITE USING COMPLETE SENTENCES****** A. Making Choices TVs A I H B Candy Bars 1) What does this graph represent (name and define it)? [5] 2) Describe what the diagonal line represent? [3] 3) What is the opportunity cost of moving from point A to point B? [2] 4) Explain the problem with producing at point H? [2] 5) How could a producer achieve production at point I? [3] B. Economic Systems: Traditional, Command, & Market Economies 1) For each of the above named systems, identify who/what is in charge in each system and where the economic systems can be found in the world today. [3] 2) How are Traditional and Command economies similar? [3] 3) What are some of the key disadvantages of a market economy? [3] 4) How does the United States have some characteristics of a Command economy? [3] 5) Which economic system would you choose to live in and why? [3] 5

6 C. Growth and Expansion 1) Explain the two ways a sole proprietorship can expand and still remain privately owned? [4] 2) Why would a company horizontally merge with another? (create an example too) [4] 3) What are the advantages to vertically merging with companies? (create an example too) [4] 4) What are the advantages of turning a private company into a public one by selling stock? [3] D. Public Companies 1) Explain how a company begins trading stock on the NYSE (make sure to utilize SEC and IPO). [4] 2) Going public brings the risks of insider trading and embezzling; define each briefly. [3] 3) How does a stock increase in value? [4] 4) What are the advantages and risks for a company to offer a dividend check? [4] 6

7 NAME: DATE: ECONOMICS & ECONOMIC DECISION MAKING UNIT TEST #1 1) 10) 19) 28) 2) 11) 20) 29) 3) 12) 21) 30) 4) 13) 22) 31) 5) 14) 23) 32) 6) 15) 24) 33) 7) 16) 25) 34) 8) 17) 26) 35) 9) 18) 27) Part I: Part II: Bonus: Total: NAME: DATE: ECONOMICS & ECONOMIC DECISION MAKING UNIT TEST #1 1) 10) 19) 28) 2) 11) 20) 29) 3) 12) 21) 30) 4) 13) 22) 31) 5) 14) 23) 32) 6) 15) 24) 33) 7) 16) 25) 34) 8) 17) 26) 35) 9) 18) 27) Part I: Part II: Bonus: Total: 7