LUOA Economics Quarter 1 Review 2024-2025. Questions & Correct Verified Answers. Graded A, Exams of Economics

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LUOA Economics Quarter 1 Review 2024-2025.

Questions and Correct Verified Answers.

Graded A

A middleman between two parties conducting a financial transaction is called a ________________. - ANSfinancial intermediary A table that shows the quantity supplied at different prices, all things remaining the same - ANSSupply schedule According to Adam Smith, a notable advantage of division of labor is that it facilitates ________. - ANSthe invention of new machinery According to Economics in One Lesson, minimum wage laws are a(n) ________ weapon for combating low wages. - ANSlimited According to Economics in One Lesson, one method the government used to raise crop prices was to give "_____________ to farmers to enable them to hold their crops off the market." - ANSgovernment loans According to Economics in One Lesson, people who advocate establishing a price floor argue that they're not trying to boost the price but are only trying to _________ it. - ANSstabilize According to Economics in One Lesson, what is the consequence of limiting the profits of those who make essential commodities, but not limiting the profits of

those who make luxuries or semi-luxuries? - ANSThe production of the price- controlled essential commodities is discouraged. According to Economics in One Lesson, what problem is Robinson Crusoe constantly faced with as he tries to satisfy all his needs on his deserted island? - ANSThe problem of alternative applications of time and labor According to Hazlitt, which of these are the real results of machines? - ANSIncreasing economic welfare Increasing production An increase in goods and services produced is one reason a nation's gross domestic product (GDP) might increase from one year to the next. What is the other reason a nation's GDP might increase? - ANSInflation has increased the value of the goods and services produced. As an individual, you are most productive when _____________. - ANSyou reach a particular goal with minimum effort or cost Communism and socialism are examples of ________ economic systems. - ANSMarxist Determine whether each item is a scarce good or a free good. - ANSScarce Goods Bananas Books Clean Air

Free Goods Garbage Determine whether each resource is a natural resource or a capital resource. - ANSNatural Resources Correct answer: Iron Correct answer: Oil Capital Resources Correct answer: Hammer Correct answer: Gasoline Determine whether each resource is a natural resource or a human resource. - ANSNatural Resources Correct answer: Apple Correct answer: Gold Human Resources Correct answer:

Lawyer Correct answer: Doctor Determine whether each scenario would create a positive or negative change in demand for pizza. - ANSPositive Change in Demand for Pizza An increase in the number of consumers An increase in the price of burgers Negative Change in Demand for Pizza A shift in consumer preferences toward healthier foods A decrease in the price of hot dogs Determine whether each scenario would increase or decrease the equilibrium price of corn. - ANSIncrease in Equilibrium Price: There is a positive change in demand. There is a negative change in supply. Decrease in Equilibrium Price: There is a positive change in supply. There is a negative change in demand.

Determine whether each scenario would result in a positive or negative change in the supply of corn - ANSPositive Change in Supply The development of new irrigation techniques that increase the amount of corn that can be grown per acre Negative Change in Supply An expectation among producers that corn won't be very profitable in the near future A decrease in the number of corn sellers An increase in the cost of tractors used in corn fields Determine whether each statement is a positive statement or a normative statement. - ANSPositive Statements Correct answer: The unemployment rate is currently 3.7%. Correct answer: Google earned $257 billion in 2021. Normative Statements Correct answer: The city government needs to create more local jobs. Correct answer: Corporations like Google should pay higher income taxes. Factors of production are bought and sold in the ____ market. - ANSFactor Hazlitt argues that the best way to raise wages is to raise labor productivity. Which of the following are methods for accomplishing this? (Choose all that apply.) - ANSNew inventions and improvements

More efficient management on the part of employers Better education and training Hazlitt's single economic lesson is this: "The art of economics consists in looking not merely at the immediate but at the ___ effects of any act or policy; it consists in tracing the ___ of that policy not merely for one group but for all groups." - ANSlonger, consequences If a lemonade stand generates $100 in total revenue with $50 in total cost, then its profit will be $____. - ANS If a new technology was created to help farmers grow more crops, which of the following economic systems would be LEAST likely to use it? - ANSTraditional economy If a video game generates $10,000 in profit on total revenue of $30,000, then the game's total cost was $________. - ANS20, If all the owners in Major League Baseball secretly agreed to never pay any player more than $10 million per year, this would be an example of ___________. - ANScollusion If an action has a marginal benefit of $100 and a marginal cost of $25, what is the net benefit? - ANS$ If an action has a net benefit of $80 and a marginal benefit of $100, what is the marginal cost? - ANS$

If demand for candy goes down 20 percent when the price goes up 10 percent, then we would say that demand for candy is _________. - ANSelastic If demand for pancakes increases when the price of waffles increases, that means the two goods are _________. - ANSsubstitutes If demand for rice rises when consumers' incomes decrease, that means that rice is a(n) ________ good. - ANSinferior If Honda were the only producer of automobiles in the world, it would have a ________. - ANSmonopoly If the government sets a minimum price of $10.00 for a bushel of carrots, it has created a price _____. - ANSfloor If the market price for pizza is $10.00, and the equilibrium price is $5.00, there will be a(n) ________ of pizza. - ANSsurplus If the supply of trucks goes up two percent when the price goes up ten percent, then we would say that the supply of trucks is _________. - ANSinelastic In a command economy, who is primarily responsible for deciding how goods and services will be produced? - ANSGovernment In Economics in One Lesson, Hazlitt states that "effective economic demand" requires ________. - ANSpurchasing power

In economics, a social unit of individuals living in the same dwelling is known as a(n) - ANShousehold In his writings, Adam Smith argues that if people were allowed to act in their own self-interest, the marketplace would be directed by an "invisible ________." - ANShand In market economies, ___ decide what goods and services will be produced, while ___ decide how those goods and services will be produced. - ANSConsumers, Producers In the model of perfect competition, all buyers must know ___________. - ANSthe prices every seller is charging for their products In what year was The Wealth of Nations published? - ANS Linda owns a bakery in the mall, and the cost of her rent just went up by 10%. She can't afford to make less profit per unit because the bakery is barely scraping by as it is. Select Linda's best choice in this scenario. - ANSLinda should raise her prices to offset her increased rental costs. Many financial institutions help their clients plan for big events like retirement or purchasing a home. This service is called __________. - ANSfinancial advising Marginal cost is the change in total cost resulting from ________. - ANSa particular action

One of the biggest incentives for consumers is a low ______. - ANSPrice Producers will make more of a product if the price goes up and less of a product if the price goes down, all things remaining the same - ANSLaw of supply Proponents of mercantilism believed that wealth is ___ and _______. - ANSFixed and Limited Some economists claim that war benefits the world's economy by creating miracles of ________. - ANSproduction Spread-the-work schemes and the fear of machines both stem from the same fallacy that a more efficient way of doings things destroys _______. - ANSjobs The ability and willingness to produce and sell specific quantities of a good or service at different prices in a specific time period, all things remaining the same - ANSSupply The quantity of a product that producers are willing to sell at a particular price, all other things remaining the same - ANSQuantity supplied The sum total of all the buyers and sellers in an area is called a _________. - ANSmarket There are only five major film studios in the United States: Disney, Columbia, Paramount, Universal, and Warner Bros. What is this an example of? - ANSOligopoly

Unions are often organized into large federations, and they can leverage this size by asking members from all the unions to stop buying products from a particular company. These are known as - ANSboycotts What does gross domestic product (GDP) measure? - ANSa nation's economic output and income What is a capital gain? - ANSProfit made from the sale of an investment such as stock or real estate What is an incentive for savers that banks have some control over? - ANSHigh interest rate What is meant by the following phrase? "There is no such thing as a free lunch." - ANSThat there is always a cost for something, even if it's not a monetary cost What would MOST LIKELY happen if a shoe manufacturer discovered a machine that would allow him to make tennis shoes for half as much labor as before? - ANSThe manufacturer's profits would increase, and he would end up indirectly creating as many jobs as he ceased to give directly. When a positive change in demand occurs, the demand curve will shift _______. - ANSright When one organization has complete control over one industry, it is said to have a ________. - ANSmonopoly

When someone improves their skills through education or experience, it's known as a(n) ______ in human capital. - ANSinvestment When you buy a $5.00 bottle of shampoo at Walmart, you are a price _______. - ANStaker Which of the following are controls used to try to offset the negative effects of setting a maximum price? - ANSUniversal price-fixing Subsidies Cost-control Which of the following characteristics does an item need to have in order to be considered a natural resource? - ANSIt can be used to produce goods and services. It is found in nature. Which of the following is an example of a product that stopped being used due to health concerns? - ANSAsbestos Which of the following is an example of the broken window fallacy? - ANSEarthquakes are good because they create more work for construction firms. Which of the following is true about branding in the model of perfect competition? - ANSThere can't be any brands. Which of the following is true, according to a biblical worldview? - ANSHumans are fallen and inherently sinful.

Which of the following would result in a higher equilibrium price for pizza? Assume that pizza is a normal good. - ANSAn increase in the price of pizza dough Which of the following would result in a lower equilibrium price for milk? Assume that milk is a normal good. - ANSA decrease in consumers' incomes Which of these is the best example of a bad economic choice a business might make? - ANSOpening a store in a bad location Which of these is true, according to a biblical worldview? - ANSHumans are able to control their environment, including their economic systems. Why do choices always result in opportunity costs? - ANSBecause every time we choose one thing, we must give up something else Why is it important to take into account the Fall of Man when setting up economic systems? - ANSBecause it means that humans are inherently sinful and will eventually corrupt the marketplace Why is profit motive an important characteristic of a market economy? - ANSWithout a worthwhile reward, few people would take the risks required to develop new products.