Midterm Review

goods and services flow

When the price of a product increases, the demand for its substitutes

What is the measure of how consumers react to a change in price?

In order for something to be considered scarce, it must be

Which of the following is an attempt by a
firm to increase the demand for its
product?

A headline reads: "High Tech Firms Begin Producing New Generation of Computers." What basic economic question is being adressed in this headline?

Susan offers to trade her old iPod for Claudia’s cell phone and Claudia accepts. Assuming both products work perfectly, we can conclude that

What is a payment made my an employer to an employee?

On the island of Yap, large circular stones
are used for money. The main reason why
this type of money serves its function as a
medium of exchange is because it is

At a restauraunt you may find a host, waiter, bus person, cook, and dishwasher. This is an example of the economic principle of

Look at Graph 2 and assume this is a graph for gallons of milk- An implementation of a price ceiling at $4 would create

What is a mutual fund?

What is the unit of study in
microeconomics?

What is an example of Good Debt?

An individual decides to pay $8 to see a
movie instead of buying an $8 meal. What
is the opportunity cost of the movie?

Of the following, which situation would
cause the shift of the supply curve to shift to the right?

Which statement is true in the circular flow diagram?

Land, Labor, Capital and Entrepreneurs are the

Which of the following would likely have a variable interest rate?

When a consumer buys a car from a dealership, this is an example of a transaction on which market?

Entrepreneurship and labor interact in
which of the following ways?

What is a Security?

Which of the following is the BEST example of a high risk portfolio?

What is the purpose of a company issuing stock?

A condition that exists because humans have unlimited wants and limited resources is called

minimum wage is a type of

Which of the following would generally NOT be considered scarce?

Which is LEAST LIKELY to cause an increase in demand

The MOST important factor affecting
consumer spending is

Prices act as signals in the market
because

People against raising the minimum wage
argue that when a legal minimum wage is
established above the equilibrium wage in
the labor market

A payment paid by a company to its shareholders is called

In the year 2000, Microsoft founder Bill
Gates was the world’s richest person. The
origins of Gates’ vast financial fortune
stemmed from his

When the U.S. government purchases a
submarine from a company, the
government has made a major
transaction in the

What is the Dow Jones Industrial Index?

A risk-taker in search of profits is known as a(n)

Which transaction below will take place in the product market on a circular flow diagram?

Look at graph 1- One possible reason for the graph to move from the blue line to the red line could be

A production possibilities curve shows

Which provides the greatest incentive for entrepreneurs to take risks?

A production possibilities curve illustrates the ____________ facing a person, business or government that has two options.

Which of the following BEST describes scarcity?

What is the point at which the quantity demanded and the quantity supplied are equal called?

Economics is

Use the information from the scenario
below to answer the following question.
Amanda decided to open a carpet
cleaning business. She hired ten
employees, rented a small commercial
office with storage, and took out a
business loan to buy three vans and
carpet cleaning equipment. Two of
Amanda’s employees ordered supplies
and processed the paperwork; one
employee was responsible for marketing
and the rest actually cleaned carpets.
After one year, Amanda’s Carpet
Cleaning cleared $40,000 after expenses.
Which of the following BEST represents
capital investment?

Which shows the correct order of investments going from MOST risky to LEAST risky?

When economists refer to “demand,” they
mean which of the following?

The machines and robots at the KIA plant are an example of what?

Assume that hamburgers and chicken sandwhiches are substitutes. If the price of hamburgers falls, one would expect the

Which of the following is NOT true about investing?