more final exam review

A resource is

• The result of choices made by business firms.

• The result of scarcity in the economic system.

• Anything people use to make or obtain what they need or want.

• A physical object that can be purchased.

Specialization increases productivity because

• Workers gain expertise in their assigned tasks.

• It reduces the number of workers needed.

• Workers are not so tired or bored.

• It increases the number of workers needed.

One example of an entrepreneur is

• A writer who runs a business proofreading essays for college students.

• A doctor at West GA Medical Center who specializes in plastic surgery.

• Chipper Jones leaving the Braves for the Red Sox so he can make more money.

• A store manager who is hired by CVS because he is good at managing the financial records.

The feature that distinguishes the U.S. economy from the pure market model is

• Private ownership of the factors of production

• Contractual relationships between businesses and individuals

• Self-interest and incentives

• Limited government involvement

Why does the U.S. government provide public goods?

• Because we have a command economy

• Because all people pay taxes

• Because they cannot limit public goods to those who pay taxes

• Because it is too expensive

All else being equal, if the supply of hot dogs is reduced, what will happen to the price of hot dogs?

• It will increase

• It will decrease

• It will remain the same

• One cannot tell from the information provided

Senator Harksten fears that flower growers in his district will not be able to afford to stay in business given the low price for tulips. He proposes that a minimum price be established for tulips that is above the current equilibrium price. Which of the following would best describe this law and its effect?

• It is a price ceiling that will cause a surplus

• It is a price floor that will cause a surplus

• It is a price ceiling that will cause a shortage

• It is a price floor that will cause a shortage

If the price of cameras goes down, what will happen to the demand for camera lenses (they are complements)?

• It will decline

• It will increase

• It will be unaffected

• This cannot be known from the available information

What is NOT a factor that supply depends on?

• Income of consumers

• Cost of production

• New technology

• Number of firms

Which sentence describes market conditions at the equilibrium, or market clearing price?

• Supply is greater than demand

• Demand is greater than supply

• Price ceilings determine supply and demand

• Supply and demand are equal