Economics Final Exam Study Guide 2022 Which is true about the economic policy known as laissez-faire: - correct answer1: The doctrine which states that government should not intervene in the marketplace
2: Adam Smith created and promoted the concept of laissez-faire
Which statement about the Unites States' free enterprise system is NOT true? - correct answer Entrepreneurs are guaranteed unrestricted freedom and financial success
In a free market economy, private property is: - correct answer encouraged
Which agency is responsible for enacting policies to save lives, prevent injuries, and protect the health of workers? - correct answer Occupational Safety and Health Administration (OSHA) Entrepreneurs and companies that offer the same goods and services are in a state of: - correct answer Competition Which economist argued in favor of the policy known as laissez-faire? - correct answer Adam Smith In a free enterprise system, what occurs when there is a demand for a product or service that does not presently exist in the market? - correct answer an innovative entrepreneur or company will eventually produce it Workers recently complained about dangerous conditions inside a factory. The air conditioner was not working properly and temperatures were known to exceed 100 degrees. Which government agency is responsible for investigating this condition? - correct answer OSHA If a nation is currently operating at a point inside its production possibilities curve, it: - correct answer Has unemployed workers and/or inefficiently employed resources Which of the following refers to the tendency to buy more of a good when its price falls in relation to similar goods? - correct answer Substitution effect 1 / 3
Part of the reason that NBA superstar Kobe Bryant earns millions of dollars each year while teachers may earn $40,000 is that: - correct answer1: Demand for Kobe Bryant's talents is very high since he can generate so much revenue for a firm 2: The supply of superstar basketball players is very low, while the supply of competent teachers is much larger 3: Consumers enjoy basketball to the point that they are willing to spend lots of money and time attending games and watching commercials If the price of a product increases, this will reduce the amount of it that gets purchased because: - correct answer Consumers will substitute other products for the one whose price has risen Tesla is a car company that typically makes sports cars valued at $100,000. Recently, Tesla has created a new vehicle for $30,000. What do you think happened as a result of this announcement? - correct answer Demand for Tesla vehicles increased with the price decrease When a change in an individual’s consumption results from a change in their salary, this is known as: - correct answer Income Effect Which of the following economic factors can cause a change in the demand for a product? - correct
answer1: Consumer Income
2: Consumer expectations
3: Consumer tastes
Our demand for apple juice is elastic. This means that if the price of apple juice increases: - correct answer consumers will buy less or find a juice to substitute for it A leftward shift in the supply curve indicates: - correct answer decrease in the quantity supplied at each price Imagine the price of mozzarella cheese decreased, but farmers were able to increase production of mozzarella cheese by using the same resources presently available. How would this effect the supply of pizza? - correct answer the supply would increase 2 / 3
As the price of a good increases, the quantity supplied will: - correct answer increase Imagine that a book publisher raises the price of a novel that normally costs $5.95 to $9.95 to cover the author's expenses. How will this affect the supply of novels? - correct answer the supply will increase The economic concept explaining why a business provides more of a good or service at higher prices than they would be willing or able to at lower prices is known as: - correct answer Law of Supply Market equilibrium refers to a specific situation in which the market price: - correct answers at a level where there is neither a shortage nor a surplus At a price of $299.99, the manufacturer of a smoothie maker is willing to produce 29,000 units per quarter. At a price of $350.00, it is likely that the manufacturer will be willing to produce: - correct answer more than 29,000 units per quarter At a price of $299.99, the manufacturer of a smoothie maker is willing to produce 29,000 units per quarter. If the CEO of the smoothie maker decides to sell the smoothie maker for $350.00 this will
create a: - correct answer Surplus of makers
At a price of $5.95, a brand-new fiction novel has recently been published. If the novel is offered for sale at a price of $2.95, then the publisher can expect the demand for the book to: - correct answer Increase When the actual price of a good or service is lower than the equilibrium price, this creates: - correct answer Excess demand Market disequilibrium occurs when: - correct answer the quantity supplied does not equal the quantity demanded A complement can be described as: - correct answer an instance when the use of one good increase the use of another good
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