Economics Questions and Answers

Typically, low inflation is a sign of: A. A healthy economy because it results from a steady rise in demand. B. A healthy economy because it results from a steady rise in supply. C. A struggling economy because it results from a steady fall in demand. D. A struggling economy because it results from a steady fall in supply.

Which of the following best describes the concept of scarcity? A. Resources are unlimited but there is a scarcity of uses for them. B. Resources are scarce when compared to the demand for them. C. There is a scarcity of funding for resource conservation. D. Resources and resource needs are equally scarce.

List the five factors that affect the labor market.

90% of millionaires make over $100,000 a year. A. True B. False

Interest rates generally reflect: A. the potential effects of inflation. B. the level of risk in an investment. C. the real value of the investment. D. the amount of money invested.

Why does the US import oil? A. Because it does not produce any oil at all. B. Because it needs higher quality oil than it produces. C. Because it has exported too much oil to nearby countries. D. Because it is cheaper to import oil than to produce it.

Which statement accurately describes a developing country? A. The country's population has a high growth rate. B. The country has a high standard of living. C. The country's population has a high life expectancy. D. The country has a high GDP per capita.

Which is a simple way of describing cost-benefit analysis? A. Measuring the overall health of an economy B. Predicting economic decisions without much information C. Making a decision by listing pros and cons D. Estimating prices to the nearest dollar

Demonstrating opportunity cost is done through production: A. analysis B. possibility C. calculation D. research

Expenditures as a percentage of the gross domestic product: A. were at the highest level during World War II. B. are higher now than they have ever been.

Goods that are considered to be needs tend to be: A. Elastic when the price changes. B. Inelastic when the price changes. C. Elastic when the supply changes. D. Inelastic when the supply changes.

What monetary policy involves decreasing the money supply?

This document is part of a A. W-2 form. B. W-4 form. C. 1040 form. D. tax return. | **Personal Allowances Worksheet (Keep for your records.)** | | | | | | --- | --- | --- | --- | --- | | **A** | Enter “1” for yourself if no one else can claim you as a dependent . | | **A** | | | • You are single and have only one job; or | | | | | **B** | Enter “1” if: | • You are married, have only one job, and your spouse does not work; or | **B** | | | | • Your wages from a second job or your spouse’s wages (or the total of both) are $1,500 or less. | | | | **C** | Enter “1” for your spouse. But, you may choose to enter “–0-” if you are married and have either a working spouse or more than one job. (Entering “–0-” may help you avoid having too little tax withheld.) | | **C** | | **D** | Enter number of dependents (other than your spouse or yourself) you will claim on your tax return . . . . | | **D** |

Efforts to punish another nation by imposing trade barriers is called?

Which of the following is an example of structural unemployment? A. A large fire burns down an automotive plant in Detroit, forcing the employees temporarily out of work. B. Three sales associates from Target are fired after stealing merchandise from the electronics department. C. John quits his job after getting accepted into law school. D. Though many companies are hiring in Seattle, Washington, unemployment is high in Tennessee.

Changes in monetary policy occur when the Federal Reserve ______.

Which phrase best completes the table? | Monopoly | | | --- | --- | | Benefits | Drawbacks | | Has lower production costs | Allows for little competition between businesses | | | May lead to price-fixing | A. Makes a greater variety of products available to consumers B. Has more money for research and development C. Promotes innovation and entrepreneurship D. Is less likely to be regulated by the government

"Which is the best definition of an economic continuum? A. A scale from 0-100 that ranks economies B. A scale from 1-10 that ranks economies C. A swing that determines the success of an economy D. A prediction about an economy"

"What describes gross domestic product (GDP)? A. Percentage of workers who are out of work. B. Increase in the average level of prices. C. Rate of growth of residential construction. D. Value of all goods and services produced in a country."

Which European country that we've studied is the closest to a pure command economy?

"High government expenditures can lead to a bigger A. revenue B. stimulus C. deficit D. surplus "

One result of the Smoot-Hawley Tariff Act of 1930, which increased tariffs on imports to the United States, was that _______.

What are five scarce resources?

# Game Theory and Strategic Choices - End of Chapter Problem Pfizer is one of the largest pharmaceutical companies in the world and has a patent on a drug that treats heartburn. If the patent is about to expire, then Pfizer has two options: It can continue to charge a high price for its product or charge a low price. After the patent expires, a drug company that produces generic drugs must decide whether to enter the market or not enter the market. The profits for each scenario are given in the accompanying payoff table. | | Generic manufacturer | Generic manufacturer | | --- | --- | --- | | | | 2020-04 | | Pfizer charges high price | Pfizer receives | Pfizer receives | | | $\$ 15$ billion profit | $\$ 30$ billion profit | | | Generic receives | Generic receives | | | $\$ 10$ billion profit | 50 profit | | Pfizer charges low price | Pfizer receives | Pfizer receives | | | $\$ 10$ billion profit | $\$ 25$ billion profit | | | Generic receives | Generic receives | | | - $\$ 2$ billion profit | 50 profit | a. The Nash equilibrium when Pfizer and the generic manufacturer are making these decisions simultaneously is that Pfizer charges a high price - and the generic manufacturer enters the market. b. Suppose Pfizer was able to allow the generic manufacturer to make a decision first and then responded to that decision with their pricing strategy. Compare the outcome in this scenario to the outcome in the simultaneous play game from part a. In the simultaneous play game Pfizer earns $\$ 15$ billion - By waiting for the generic manufacturer to make the first move Pfizer earns $\$ 15$ billion - Therefore, Pfizer does not - gain a second-mover advantage by waiting. c. Now, suppose Pfizer was able to select their pricing strategy first and allowed the generic manufacturer to respond to their decision. Compare the outcome in this scenario to the outcome in the simultaneous play game from part a. By making the first move Pfizer earns $\$ 25$ billion - Therefore, Pfizer does - gain a first-mover advantage. In a practice known as pay to delay, some manufacturers will pay a rival in exchange for a guarantee that the rival does not enter the market. d. In a sequential play game, what is the most that Pfizer would be willing to pay the generic manufacturer not to enter the market? Pfizer's maximum payment: $\$ 10$ billion

"If the MPC (Marginal Propensity to Consume) is 0.8, what change in investment spending is required to effect a total change in income of 60 billion? A. 12 billion B. 15 billion C. 20 billion D. 25 billion"

What are the 7 principles of microeconomics?

"Which is an example of an externality? A. The cost to restore habitat in previously destroyed areas. B. The use of the atmosphere for air pollution. C. Tax breaks for high-efficiency appliances. D. Roads maintained with a tax on gasoline."

"How do you find shortage or surplus on a graph? A. Shortage is above the equilibrium price. B. Surplus is below the equilibrium quantity. C. Shortage is below the demand curve. D. Surplus is the area above the supply curve."

"How does scarcity determine the economic value of an item? A. By the amount of goods that are produced B. By the capital required to build the factory C. By the unlimited wants of the consumers D. By the resources consumed in production"

"Which of these is the best example of an externality? A. You decide to stop snacking between meals. B. Your shoe store stops selling your favorite style. C. You enjoy looking at your neighbor's garden. D. Your new bicycle goes faster than you expected."

"A trained automobile mechanic would be an example of: A. Capital Goods B. Entrepreneurship C. Human Capital D. Natural Resources"

"When negative externalities are present in a market: A. The market will still maximize total benefits. B. Demand will be too high. C. Overproduction will occur. D. Producers will be affected, but not consumers."

Describe how to measure 2/3 cup of sugar using the fewest steps and fewest measuring tools. (Hint: 1 cup = 16 tablespoons; 1 tablespoon = 3 teaspoons)

Choose the investments that would BEST foster economic growth. A) Investment in capital B) Investment in technology C) Investment in commodities D) Investment in savings accounts E) Investment in digital currency

The table above indicates the production alternatives of two countries, A and B, which produce computers and steel using equal amounts of resources. If both countries always produce at full employment, which of the following statements must be correct? A. B. C. D.

Which of the following will cause the supply curve to shift to the left? A fall in input prices Higher product taxes Improved technology

Which statement best describes a command economy? A. Government intervention in economic choices is strictly forbidden. B. The government determines economic choices and makes most decisions. C. The decisions made by producers and consumers drive all economic choices. D. Producers and consumers make some economic choices while the government makes others.

How many servings of mashed potatoes are in a 5-pound bag?

Who answers the three basic economic questions in a mixed economy?

A demand curve enables a firm to examine prices __________. A. in terms of quantity sold relative to the costs to produce the product B. in terms of supply relative to its profits