Introduction to Economics Final Exam
Course Introduction
Introduction to Economics provides a comprehensive overview of the fundamental principles and concepts that underlie economic theory and practice. This course explores the basic problem of scarcity, the allocation of resources, and the mechanisms by which markets operate. Topics include supply and demand, market equilibrium, efficiency, pricing, and government intervention, as well as an introduction to macroeconomic concepts such as economic growth, inflation, and unemployment. Students will learn how individuals, businesses, and governments make choices in response to incentives, and how these decisions affect overall economic outcomes both locally and globally.
Recommended Textbook Fundamentals of Economics 6th Edition by
William Boyes
Available Study Resources on Quizplus
18 Chapters
2262 Verified Questions
2262 Flashcards
Source URL: https://quizplus.com/study-set/1437
Page 2
Chapter 1: Economics and the World Around You
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/28532
Sample Questions
Q1) Choices are not made because of limited
A) resources.
B) income.
C) wants.
D) time.
E) availability of goods.
Answer: C
Q2) Which of the following is considered to be physical capital?
A) Stocks
B) Bonds
C) Machinery
D) Money
E) Finished products
Answer: C
Q3) The primary goal of economics is to help people make money.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Markets and the Market Process
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/28533
Sample Questions
Q1) Consider the market described by the schedule in Table 2.4. At a price of $5 per unit,
A) the quantity purchased is 1,000 units.
B) the quantity traded is 1,000 units.
C) there is a surplus of 900 units.
D) the quantity sold is 1,800 units.
E) there is excess demand.
Answer: C
Q2) Which of the following statements concerning markets is false?
A) Buyers and sellers communicate with each other directly or indirectly about the quality and quantity of the product.
B) Buyers and sellers discuss, either face to face or through an agent or broker, what they are willing to pay and receive for a good or service.
C) Black markets deal with exchanges that violate the law.
D) Markets are always formally organized, like the stock market.
E) Underground market is the term given to unrecorded transactions, whether legal or illegal.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Applications of Demand and Supply
Available Study Resources on Quizplus for this Chatper
97 Verified Questions
97 Flashcards
Source URL: https://quizplus.com/quiz/28534
Sample Questions
Q1) In Figure 3.4, the reason for the wage differential could be the fact that
A) market A is the market for a risky occupation.
B) market B consists of unskilled labor.
C) market A consists of workers with more human capital.
D) market B consists of workers with less human capital.
E) all of these are true.
Answer: E
Q2) An increase in the minimum wage, which is above the equilibrium wage, will result in A) firms hiring less workers
B) more people going to look for a job
C) adverse affects on low-skilled workers
D) more teenagers looking for jobs
E) All of these.
Answer: E
Q3) Creative destruction is the process in which temporary losses are outweighed by long run gains.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: The Firm and the Consumer
Available Study Resources on Quizplus for this Chatper
122 Verified Questions
122 Flashcards
Source URL: https://quizplus.com/quiz/28535
Sample Questions
Q1) When the price of a good increases by 50 percent, quantity demanded decreases by 2 percent. What is the price elasticity of demand?
A) 1/25
B) 2
C) 25
D) 50
E) It is impossible to determine from the information given.
Q2) If a manager is assessing how much more money a business will generate if the business is open additional hours, he or she is assessing marginal revenue.
A)True
B)False
Q3) Some ink jet printers are very reasonably priced. However, replacement ink is very expensive. This is because once you purchase a printer, your demand for that brand of ink cartridges is very inelastic.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Costs and Profit Maximization
Available Study Resources on Quizplus for this Chatper
119 Verified Questions
119 Flashcards
Source URL: https://quizplus.com/quiz/28536
Sample Questions
Q1) Refer to Figure 5.2. If the firm is producing Q<sub>3</sub> units of output, we know that the firm
A) could increase profit by producing and selling less.
B) could increase profit by producing and selling more.
C) is maximizing profit or minimizing losses.
D) is earning a normal profit.
E) has made a loss on each unit produced before Q<sub>3</sub>.
Q2) In Table 5.3, the average fixed cost of the first unit of output is
A) $48.
B) $96.
C) $98.
D) $100.
E) impossible to determine from the information given.
Q3) The long run is a
A) period of three years or longer.
B) period long enough to allow firms to change plant size and capacity.
C) period long enough to allow firms to make economic decisions.
D) period that affects larger rather than smaller firms.
E) race of 10 kilometers or more.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Competition
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/28537
Sample Questions
Q1) When increasing size leads to lower per unit costs, we say there are
A) Diseconomies of scale
B) Economies of scale
C) Untapped resources
D) Unique resources
E) Sunk costs
Q2) Nash equilibrium occurs when a unilateral move by a participant makes the participant better off.
A)True
B)False
Q3) Creative destruction harms workers in activities that become obsolete or inefficient.
A)True
B)False
Q4) Examples of cartels include all the following except:
A) OPEC
B) NCAA
C) Sunkist Growers
D) TSA
E) All of these are cartels.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Business, Society, and the Government
Available Study Resources on Quizplus for this Chatper
157 Verified Questions
157 Flashcards
Source URL: https://quizplus.com/quiz/28538
Sample Questions
Q1) Nobel Prize-winning economist Ronald Coase perceives market failures as a problem associated with
A) property rights.
B) most-favored customers.
C) facilitating practices.
D) synthetic coalitions.
E) public goods.
Q2) Government intervenes in the market process to enhance competition.
A)True
B)False
Q3) The fact that the average smoker dies seven years earlier than the average nonsmoker creates a positive externality for nonsmokers who enjoy social security benefits funded by the smokers.
A)True
B)False
Q4) Inefficiencies with government allocation often arise not because legislators are incompetent or ignorant, but because of problems associated with individual incentives.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Government Intervention Versus Free Markets
Available Study Resources on Quizplus for this Chatper
103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/28539
Sample Questions
Q1) At equilibrium, the yearly rate of increase in the price of a nonrenewable natural resource will equal the rate of return on investments of equivalent risk.
A)True
B)False
Q2) In the market system, people employ their talents and resources where they have the lowest value.
A)True
B)False
Q3) The largest publicly sponsored health care program is
A) Medicare.
B) Medicaid.
C) Head Start.
D) social security.
E) Health maintenance organization (HMO).
Q4) If the interest rate falls, the supply of lumber in the future will shift in.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: An Overview of the National and International Economies
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/28540
Sample Questions
Q1) The complete circular flow model shows that
A) business firms are the revenue source for consumers.
B) government uses the tax revenue from households and businesses to supply public services.
C) factors of production are demanded only by the government.
D) net exports are always equal to zero.
E) the goods and services produced by business firms are sold through resource markets.
Q2) Fiscal policy is best defined as the manipulation of the balance of payments.
A)True
B)False
Q3) Which of the following would not be an example of a product that the United States would import from a developing country?
A) Coffee
B) Nuclear missiles
C) Cell phones
D) Bananas
E) Gold
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Macroeconomic Measures
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/28541
Sample Questions
Q1) The circular flow model shows that one sector's inventory represents other sectors' price base.
A)True
B)False
Q2) Other things being equal, an increase in Italian demand for U.S. computers would lead to an appreciation of the U.S. dollar relative to the Euro.
A)True
B)False
Q3) The balance of payments is
A) the difference between the dollar value of exports and the dollar value of imports.
B) the same as the sum of the merchandise and services accounts.
C) a record of a country's trade in goods, services, and financial assets with the rest of the world.
D) a summary statement of the merchandise, services, and unilateral transfers accounts.
E) a record of the amount of U.S. dollars held abroad.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Unemployment, Inflation, and Business Cycles
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/28542
Sample Questions
Q1) The most dramatic hyperinflation in recent years, and one of the most dramatic ever, occurred in
A) Argentina
B) Chile
C) Brazil
D) Zimbabwe
E) Mexico
Q2) Variable interest rates
A) protect lenders against the risks associated with unexpected inflation.
B) protect debtors against the risks associated with expected inflation.
C) shift the risk associated with inflation from the debtor to the creditor.
D) eliminate all risk associated with inflation.
E) protect the government against increases in the federal budget deficit.
Q3) In which of the following decades did the United States experience the highest rate of peacetime inflation?
A) 1930s
B) 1950s
C) 1960s
D) 1970s
E) 1980s
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Macroeconomic Equilibrium: Aggregate
Demand and Supply
Available Study Resources on Quizplus for this Chatper
117 Verified Questions
117 Flashcards
Source URL: https://quizplus.com/quiz/28543
Sample Questions
Q1) Refer to Table 12.3. Between year 1 and year 2, the real wage
A) decreased by 50 percent.
B) increased by 50 percent.
C) increased by 33.3 percent.
D) decreased by 33.3 percent.
E) decreased by 25 percent.
Q2) A rightward shift of the aggregate demand curve with no change in aggregate supply signals an economic expansion.
A)True
B)False
Q3) Which of the graphs in Figure 12.1 is consistent with long-run equilibrium analysis?
A) A
B) B
C) C
D) D
E) None of these
Q4) Demand-pull inflation occurs when there is a decrease in aggregate supply.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Fiscal Policy
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/28544
Sample Questions
Q1) Budget deficits tend to grow during recessions because real GDP growth is
A) positive, which increases tax receipts in relation to government expenditures.
B) negative, which reduces tax receipts in relation to government expenditures.
C) zero, which causes neither tax receipts nor government expenditures to grow.
D) negative, which reduces transfer payments in relation to tax receipts.
E) positive, which reduces both tax receipts and transfer payments.
Q2) The misery index is defined as
A) potential GDP minus real GDP.
B) the sum of the unemployment rate and the inflation rate.
C) the difference between potential GDP and actual GDP.
D) the unemployment rate minus the inflation rate.
E) the inflation rate minus the unemployment rate.
Q3) To avoid another catastrophe like the Great Depression, the federal government has limited its activities largely to national defense and foreign policy.
A)True
B)False
Q4) The misery index is defined as the inflation rate minus the unemployment rate.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Money and Banking
Available Study Resources on Quizplus for this Chatper
116 Verified Questions
116 Flashcards
Source URL: https://quizplus.com/quiz/28545
Sample Questions
Q1) The banking system created at the end of the American Revolution has been a consistent, stable force for economic growth.
A)True
B)False
Q2) Which of the following is not part of the other checkable deposits component of M1?
A) Credit union share draft accounts
B) Demand deposits at mutual savings banks
C) Negotiable orders of withdrawal accounts
D) Stock negotiating accounts
E) Automatic transfer system accounts
Q3) Which of the following constitutes a currency drain from the banking system?
A) Purchases of government securities
B) New demand deposits
C) Banks lending out all excess reserves
D) Lost or misplaced currency
E) Lower required reserve holdings
Q4) Required reserves are equal to total reserves minus excess reserves.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Monetary Policy
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/28546
Sample Questions
Q1) The Federal Reserve system is divided into how many districts?
A) 50
B) 12
C) 7
D) 6
E) 2
Q2) Refer to Figure 15.3. Other things being equal, if real GDP is equal to $900 billion, then the
A) money demand curve will be to the left of the one shown in the figure.
B) quantity of money demanded will be less than $400 billion and can be illustrated by a downward movement along the money demand curve.
C) quantity of money demanded will be greater than $400 billion and can be illustrated by an upward movement along the money demand curve.
D) investment demand curve will be to the left of the one illustrated in the figure.
E) money demand curve will be to the right of the one illustrated in the figure.
Q3) The U.S. Constitution provided for the creation of the Federal Reserve.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Macroeconomic Policy, Business Cycles, and Growth
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/28547
Sample Questions
Q1) Economic growth is the sum of the growth rate of total factor productivity and the growth rate of resources.
A)True
B)False
Q2) Political business-cycle theory asserts that political manipulation of the business cycle is an ineffective way to increase economic growth.
A)True
B)False
Q3) Which of the following is a barrier to economic growth in developing countries?
A) A shortage of labor
B) A declining population
C) Lack of investment in research and development
D) Lack of natural resources
E) A declining labor force
Q4) A recessionary real shock is associated with an outward shift of the short-run Phillips curve and a leftward shift of the short-run aggregate supply curve.
A)True
B)False
Page 18
To view all questions and flashcards with answers, click on the resource link above.
Chapter 17: Issues in International Trade and Finance
Available Study Resources on Quizplus for this Chatper
126 Verified Questions
126 Flashcards
Source URL: https://quizplus.com/quiz/28548
Sample Questions
Q1) The "creation of domestic jobs" argument for protection holds that domestic firms will produce the goods that otherwise would have been produced abroad, thus
A) increasing the opportunity cost of producing the good abroad.
B) decreasing the opportunity cost of producing the good abroad.
C) employing domestic workers instead of foreign workers.
D) employing foreign workers instead of domestic workers.
E) achieving full employment in domestic industries.
Q2) The United States does not employ export tariffs because
A) the GATT prohibits them.
B) of producer pressures.
C) the U.S. Constitution prohibits them.
D) of consumer pressures.
E) the Smoot-Hawley Tariff Act prohibits them.
Q3) Governments subsidize increasing-returns-to-scale industries to help those industries become large enough to compete in global markets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Globalization
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/28549
Sample Questions
Q1) In each of the 1990s financial crises, it became clear that the domestic currency was undervalued.
A)True
B)False
Q2) Which of the following statements is incorrect?
A) Globalization has resulted in faster economic growth and reductions in poverty.
B) To avoid globalization in order to avoid financial crises is to remain in poverty as the rest of the world grows richer.
C) A closed economy can follow very bad economic policies for a long time.
D) Globalization allows the rest of the world to respond to bad economic policies in a way that highlights the bad policy.
E) A country with sound economic policy and good investment opportunities is rewarded with large flows of savings from the rest of the world to increase the cost of developing the local economy.
Q3) Financial crises result in declining stock markets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 20