Economics Final Exam UPDATED ACTUAL
QUESTIONS AND CORRECT ANSWERS
What is the basic problem that all economies must deal with? - Correct answers✔✔how to
satisfy unlimited wants with limited resources
When a society invests in education, how is it improving its productivity? - Correct
answers✔✔by investing in human capital
Which American socioeconomic class is impacted by scarcity? - Correct answers✔✔the poor,
middle class, and the rich
Which describes a method for allocating scarce resources? - Correct answers✔✔The Payne
County Commission decides to distribute more property taxes to the Public School system for
new computers
Why is the price system a more efficient system for allocating scarce resources than by
authoritarian means, such as in command economies? - Correct answers✔✔Prices and the ability
to make a profit will increase the supply of the scarce resources, thereby lowering prices and
increasing demand
Which economic question does this headline answer? - Correct answers✔✔For whom will it be
produced?
An increase in the capital utilized in the production process leads to what? - Correct
answers✔✔an increase in workers' productivity
All of these inventions aided society in improving which economic area? - Correct
answers✔✔Productivity
, The purchase of the tires in the scenario represent the - Correct answers✔✔the factor market
In the Resource (Factor) Market, who demands the factors of production? - Correct
answers✔✔Businesses / Firms and Government
In a market economy, a high price will usually cause - Correct answers✔✔producers to supply
more and consumers to buy less
When makers of a product increase their price, consumers are often unwilling to continue to
purchase the product (or at least as much of the product). This is known as - Correct
answers✔✔the law of demand
Heather is seeking to start a business. She is concerned with having enough money to start the
business, even after taking a loan from the bank. She is willing to take on partners but she still
wants to have control over most aspects of the company. Which form of business organization
would be best to set up? - Correct answers✔✔Partnership
How MIGHT stock issues be preferable to borrowing money for firms looking to finance
operations? - Correct answers✔✔Firms might want to avoid paying interest charges
How does the CPI relate to the annual inflation rate? - Correct answers✔✔The annual inflation
rate is calculated based on changes in the CPI from one year to the next
Which statement supports why GDP is a good indicator of economic growth? - Correct
answers✔✔GDP quantifies the production of goods and services and accurately indicates the
size of the economy
QUESTIONS AND CORRECT ANSWERS
What is the basic problem that all economies must deal with? - Correct answers✔✔how to
satisfy unlimited wants with limited resources
When a society invests in education, how is it improving its productivity? - Correct
answers✔✔by investing in human capital
Which American socioeconomic class is impacted by scarcity? - Correct answers✔✔the poor,
middle class, and the rich
Which describes a method for allocating scarce resources? - Correct answers✔✔The Payne
County Commission decides to distribute more property taxes to the Public School system for
new computers
Why is the price system a more efficient system for allocating scarce resources than by
authoritarian means, such as in command economies? - Correct answers✔✔Prices and the ability
to make a profit will increase the supply of the scarce resources, thereby lowering prices and
increasing demand
Which economic question does this headline answer? - Correct answers✔✔For whom will it be
produced?
An increase in the capital utilized in the production process leads to what? - Correct
answers✔✔an increase in workers' productivity
All of these inventions aided society in improving which economic area? - Correct
answers✔✔Productivity
, The purchase of the tires in the scenario represent the - Correct answers✔✔the factor market
In the Resource (Factor) Market, who demands the factors of production? - Correct
answers✔✔Businesses / Firms and Government
In a market economy, a high price will usually cause - Correct answers✔✔producers to supply
more and consumers to buy less
When makers of a product increase their price, consumers are often unwilling to continue to
purchase the product (or at least as much of the product). This is known as - Correct
answers✔✔the law of demand
Heather is seeking to start a business. She is concerned with having enough money to start the
business, even after taking a loan from the bank. She is willing to take on partners but she still
wants to have control over most aspects of the company. Which form of business organization
would be best to set up? - Correct answers✔✔Partnership
How MIGHT stock issues be preferable to borrowing money for firms looking to finance
operations? - Correct answers✔✔Firms might want to avoid paying interest charges
How does the CPI relate to the annual inflation rate? - Correct answers✔✔The annual inflation
rate is calculated based on changes in the CPI from one year to the next
Which statement supports why GDP is a good indicator of economic growth? - Correct
answers✔✔GDP quantifies the production of goods and services and accurately indicates the
size of the economy
