Study guide

1. Secondary markets for stocks and bonds exist to allow a. those who own stocks and bonds to trade with those who want to own them. b. over-the-counter markets to issue IPOs c. governments to issue stock d. consumers to take out loans 2. Before a resource can be considered scarce, it must meet the following criteria: a. Be limited in quantity, have more than one use, and be desirable. b. Be limited in quantity, have two or more benefits, and be everywhere. c. That is nonsense because scarcity does not exist. d. People must want to buy it, and it has many uses. 3. Without capital markets, entrepreneurs would need to _____________ to expand. a. Save enough money b. Sell bonds c. Sell stock d. Buy stock 4. According to the data from the United Nations, Country X has all the natural resources needed to create a thriving modern economy. Since country X is not thriving, it may be missing a. skill labor, capital, or entrepreneurship b. nothing, the people are lazy c. land d. money 5. Land includes the following: a. water as well as all the trees and minerals in the ground. b. just the soil c. land and treesd. none of the above 6. Capital includes items such as a. people working b. land and water c. equipment used to produce goods and services d. only money 7. If Mr. Jones decides to give his grandson $10 for every A he makes on his report card, this would be an example of an economic a. negative incentive b. extra c. positive incentive d. reward 8. Being written up for tardiness is an example of a a. negative incentive b. extra incentive c. positive incentive d. reward Incentive 9. In economics, we refer to a person deciding to trade pizza for candy as a. voluntary exchange b. reward c. communism d. fear 10. Which of the following forms of money is the most portable? a. bar of gold b. chicken c. debit card d. a bag of $100 bills weighing 50lbs 11. Labor Unions can impact the economy by a. restricting supply b. slowing down output c. calling for a strike d. all of the above 12. One of the ways money loses its value is due to a. paper gets old b. price of gold drops c. inflation d. it never loses its value 13. If a leader of a country decides to produce more guns than butter, its likely a __________ system. a. command b. market c. mixed d. none of the above 14. Economic freedom for consumers and producers, a more comprehensive selection of goods and services, and the belief in Laissez Faire (no government) all characterize a _________ system. a. Command b. Free Market c. Mixed d. None of the above 15. Consumers and producers engaging in economic activity without government interference depicts a. the "Invisible Hand" as explained by Adam Smith b. communism by Karl Marx c. another day of hustling by capitalist pigs d. none of the above 16. All economic systems attempt to answer the following questions: a. What to produce? b. How to produce it? c. For whom to produce? d. All of the above 17. Why does the government usually regulate natural monopolies? a. to ensure that marginal revenue is the same as price b. to make sure that companies profit from their research c. to make sure it doesn't get too much power d. to prevent price discrimination 18. What might happen if a monopolist increased its product output each week? a. the price of the good would not change, but revenue would increase b. the price of the good would drop, and revenue would decrease c. the price of the good would drop, and revenue would increase d. the price of the good would not change, and revenue would stay the same 19. Which of these is not a characteristic of pure competition? a. unique product b. many sellers c. well-informed consumers d. easy market exit20. The theoretical principle of this system suggests that all the people own the means of production. a. Socialism b. Capitalism c. Communism d. None of the above 21. What role does the Securities and Exchange Commission fulfill regarding corporations? a. it regulates the stock market b. it sells securities c.it sells bonds d. it issues licenses to businesses 22. Country X decided to divide the proceeds from its oil revenue amongst its citizens. The economic value practiced in this case is a. Freedom b. Growth c. Equity d. Sharing 23. During the pandemic, the Bidden administration issued stimulus checks to all Americans with an annual gross income of less than $150 000. The broad economic goals practiced in this case is a. economic stability b. full employment c. generosity d. welfare 24. Why is liability the most significant disadvantage of a sole proprietorship? a. The owner could lose his personal property if the business fails. b. The owner may have difficulty getting loans from banks. c. The owner might be unable to pay their employees. d. The owner may not be able to complete work on time. 25. Bob buys a dozen hot wings each weekend for $12. This weekend the price for one dozen will be $6. Bob decided to purchase three dozen instead of one. Which economic theory does this illustrate? a. the law of demand b. the law of supply c. the law of diminishing returns d. none of the abov