EPF FINAL EXAM

Economics is the study of __________?

• People’s standard of living.

• The way businesses produce goods.

• The way people make decisions in a scarce world.

• How goods should be produced.

Entrepreneurs are considered the driving force in an economy because they

• own a lot of land.

• are the greatest number of people in an economy

• take risks and invest money in new ideas

• provide most of the labor.

Factors of production include which of the following?

• Land, labor, capital, and entrepreneurship

• Technology products and entrepreneurship

• Goods and services

• All of the products produced in an economy

The value of the next best alternative that has to be given up for the action that is chosen is the

• Factor of production.

• Opportunity cost.

• Trade-off.

• Productivity.

Using resources in such a way as to maximize the production of goods and services is called

• Efficiency

• Underutilization

• thinking at the margin

• growth

Which of the following would reduce the supply of microcomputers?

• a technological improvement that lowers the cost of producing the computers

• higher wage rates for the workers that assemble the computers

• a reduction in the price of computer chips used to produce the computers

• a reduction in the price of computers.

A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:

• A) the supply curve.

• B) the demand curve, as consumers try to economize because of the shortage.

• C) both the supply and demand curves.

• D) the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.

Which of the following is not a “lagging” economic indicator?

• A) GDP

• B) CPI

• C) Fed Reserve Rate

• D) Unemployment Rate

In a business cycle, a period from peak to trough may be referred to as:

• A) an expansion.

• B) a recurrence.

• C) a contraction.

• D) a stagflation.

When the Federal Reserve can spur economic activity by lowering interest rates it is described as:

• A) Expansionary Monetary policy

• B) Expansionary Fiscal policy

• C) Contractionary Monetary Policy

• D) Contractionary Fiscal policy