Econ Final

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  1. What could be the effects of a good training program for factory employees?
    Increase Productivity
  2. What is the key component of a free enterprise system?
  3. What does the circular flow of economic activity describe?
    Economic independence between businesses and households.
  4. What is one major goal of the US economy?
    Freedom to operate a business.
  5. Personal freedom to own property, start a business, and make economic decisions characterizes what type of economic system?
  6. The skills and knowledge gained by students in school and through work study are referred to as?
    Human Capital
  7. The inability of a store to get the quantity of a product that it can sell indicates an increase in what?
  8. Name two types of business organizations that have unlimited liability?
    Sole Proprietorship and Partnerships
  9. When the US government purchases a submarine form a company, the government has made a major transaction in what type of market?
  10. Sharon decided to open a dry cleaning business. She borrowed some money from her sister and took a loan from a bank. She hired one helper. What is a major disadvantage of her business?
    Unlimited Liability
  11. What is true about a shareholder in a corporation?
    The shareholder is part owner
  12. In a free market what will happen to the supply to typists if as the wages paid to typists increase?
    More people will seek jobs as typists.
  13. What is the result when the government tax revenues exceed spending?
    Surplus in Federal Budget
  14. When citizens demand more government services, public officials must consider a lot of things except the campaign strategy for next year?
    A lot of things except campaign strategy
  15. When there is an increase in the market supply and decrease in demand of certain product what will be the affect upon future production?
    It will slow down
  16. What can cause the price of a companies stock to decrease?
    More people wanted to sell their stock
  17. What is a disadvantage of buying on credit?
    People spend money they don’t have
  18. What is the most important factor affecting consumer spending?
    Average Consumer Income
  19. Define Productivity.
    Efficient output of goods and services
  20. Because resources are limited and wants are unlimited people must do what?
    Decide how to use their resources efficiently
  21. What are wages most influenced by in a market economy?
    the productivity of labor
  22. What is the name for an economic system in which government makes economic decisions?
  23. Where there is free competition the market works mainly according to what?
    The laws of supply and demand
  24. What are the factors of production?
    Land, Labor, Capital, and Entrepreneurship
  25. When a city gives up the building of a new park for the improvement od schools it is called an:
  26. What influences consumers to pay a higher price foe a product or find a substitute?
  27. What is another name for factors of production?
    Productive Resources
  28. Ford can produce more cars per year now than in 1940 because why?
    Technology Advances
  29. Define voluntary exchange.
    People freely engage in market transactions
  30. List the productive resources.
    Land, Labor, Capital, and Entrepreneurship
  31. Sharon decided to open a dry cleaning business. She borrowed some money from her sister and took a loan from a ban. She hired one helper. What’s one major disadvantage of her business?
    Unlimited Liability
  32. What is an advantage of a corporation?
    Limited Liability
  33. What types of business organizations are you likely to use if you want complete control and exclusive rights to all profits?
    Sole Proprietorship
  34. Sometimes a company agrees, for a fee, to let another person or group set up an enterprise that uses the original company’s name to sell goods and services. What type of organization is this?
  35. What is a major advantage of a corporation?
    Limited Liability
  36. Name three disadvantages of a corporation…
    Double taxation, less direct control, difficult to start
  37. What is one disadvantage of US corporations opening divisions in developing countries?
    Increased trade barriers
  38. What is the principle incentive for taking risks to be in business?
  39. Why do doctors typically earn more than farmers?
    Because doctors are relatively scarcer give the demand for their services
  40. Because US citizens don’t save a large portion of their income, what do businesses wishing to borrow capital tend to do?
    Look for forging lenders
  41. What will happen when a tariff is imposed on a good?
    The price for the imported good will rise
  42. How would American farmers benefit from beef exports to Europe?
    Larger markets for their product
  43. What types of taxes are regressive?
    Sales tax on food
  44. What investment types involve the least amount of risk?
    Saving account
  45. In the American economy, the goal of economic equality is most connected with?
    giving participants a fair chance to succeed
  46. What causes a price decrease in a corporations stock?
    more people want to sell their stock
  47. In a free market what is the most profitable way to set prices?
    set the prices above the production cost but below the other supplier
  48. A business which has a local owner who pays royalties to a national corporation for support, marketing, and assistance is called what?
  49. What is the oldest form of business organization and the most common?
    sole proprietorship
  50. List advantages of a corporation.
    Has limited liability
  51. What markets are where productive resources are sold?
    product market
  52. When a choice has to be made between two or more selections, what is lost or trade off is called what?
    opportunity cost
  53. What basic economic problem do both high-income and low-income nations have?
    Scarcity of resources
  54. Define Specialization.
    A technic use to increase the amount of goods produced in a company
  55. What group is most likely to benefit from a tariff imposed by the USA on imported fruit?
    Domestic orange growers (farmers)
  56. The idea that producers make goods that consumers like are willing to pay for is a principle of what economic system?
  57. What occurs in market economy when prices rise?
    • Suppliers will increase what they produce• Potential suppliers will be attracted to the market• Total output will increase
  58. What are the differences between stocks and bonds?
    Unlike bonds stocks give the holder part company ownership
  59. Which business form can change its ownership through stock transfers?
    • Corporation
  60. Why is investing in the stock market risky?
    • There is no guarantee that stock value will rise
  61. What is the most likely reason that sugar farming in the US is dominated by a “limited number” of large corporations?
    • Sugar industry has not been profitable enough to attracts small independent invertors
  62. How do inventors earn profits by purchasing and selling stock?
    By selling stocks after they increase in value
  63. What is the primary purpose of NAFTA (North American Free Trade Agreement)?
    To reduce trade barriers among the US Canada and Mexico
  64. Why do many consumers use credit?
    It enables a persons to buy now and pay later
  65. If Billy took out a $5000 dollar loan at a simple interest rate of 9% what would be the principle and interest balance in 5 years?
  66. What is one disadvantage of US corporations opening divisions in developing countries?
    Nations can increase trade barriers
  67. In the 1980’s and 1990’s, our country experienced an unfavorable balance of trade with Asian countries, which sell us more electronic goods than we sell to them. When such trade imbalances occur, what has happened?
    The government has lowered minimum wage so the US products can be made as cheep as domestic goods
  68. A newspaper reports, “COFEE GROWERS’ MONOPOLY BROKEN INTO SEVERAL COMPETINGFIRMS.” If this true, we would expect the coffee-growing industry to…
    Increase output and decrease prices
  69. Why do some economists argue that the minimum wage should not be increased?
    Because firms will be obliged to lay off workers
  70. Give an example of structure unemployment in an economy.
    Someone whose jobs skills don’t match the economy’s needs
  71. Armed is a skilled carpenter who lives in Minnesota. He builds homes form April to November. What has the greatest impact on why Armand’s company shuts down for the winter?
    Extreme weather conditions
  72. What determines the division of the economy’s output among groups and individuals in a market system?
    incomes of individuals
  73. When a company attempts to control all of the business in a particular area, why would the government intervene?
    Because the situation would create a monopoly
  74. Give an example of a capital outflow form the US economy.
    The US sends wheat to Europe
  75. Market size can be affected by…
    • Decision of private businesses, government policies, and new technology
  76. “What will happen to U.S. imports to Japan if the dollar becomes expensive in terms of Japanese yen?” Is this a relevant question for the study of macroeconomics?
  77. Give an example of the use of technology to increase productivity.
    Using robots in the automobile industry
  78. In which economic system does the government own the means of production?
  79. Define Productivity.
    Efficient output of goods and services
  80. Describe “investment in human capital”.
    • ·        
    • Person goes to college
  81. Why is investing in stock risky?
    Because there is no guarantee the stock price will rise
  82. What is an important factor for economic growth?
    Availability of resources
  83. As more units of a product are consumed, the satisfaction from each additional unit…
  84. Define Corporation.
    Although many people are involved, it is treated by the law as one person
  85. In a market economy an increase in supply results in…
    • A lower market price for the good
  86. Define Non-Profit.
    A type of business whose goal is to benefit society
  87. Define Sole-Proprietorship.
    Owner receives all the profit, also takes all the risks
  88. Timothy works for many years at a highly successful computer corporation. After a while he decides to lave the company and open his own clothing store, To raise capital for the store, Timothy sells all the vested stock he acquired while working a the computer corporation. The clothing store can be considered…
    • A Sole Proprietorship
  89. Define Social Security.
    • A financial program that provides monthly payment to people who can’t work
  90. Define Fiscal Policy.
    • Government set of financial policies on taxation and spending
  91. An increase in real interest rates provides an incentive for people to take what economic action?
    To save more and borrow less
  92. If the US dollar gains strength against the Chinese Yen, we would expect a merchandise trade_________________?
    • Increase
  93. If there is an increase in the use of consumer credit, _______________will occur?
    Economic Expansion
  94. Define Commodity Money.
    • Using gold to make purchases
  95. Define Favorable Balance of Trade.
    Exporting more than imported
  96. Loans extend for longer periods of time often involve higher interest rates in order to…
    Compensate the lender for greater risk
  97. Example of Progressive Tax.
    Individual income tax
  98. How do owners of common stock benefit financially?
    Through dividends and capital gains
Card Set:
Econ Final
2014-12-18 21:25:53

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