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EPF Review 3
Test Description: Economics and Personal Finance
Instructions: Answer all questions to get your test result.
1) ___________ is the study of how we make use of our resources.
A
Finance
B
Economics
C
Demand
D
Supply
2) The quantity of a product that producers are willing and able to make available for sale at various prices over a given period of time is said to be
A
surplus
B
supply
C
demand
D
shortage
3) When the quantity demanded and quantity supplied is equal, what is the result?
A
surplus
B
shortage
C
equilibrium price
D
none of these
4) The law of supply states that (all other things being equal) as the price of a good or service increases
A
quantity supplied increases
B
quantity supplied decreases
C
quantity demanded increases
D
quantity demanded decreases
5) A demand curve:
A
shows the relationship between price and quantity demanded.
B
indicates the quantity demanded at each price.
C
has all of the above characteristics.
D
graphs as a downward-sloping line.
6) Productivity increases at a steel mill due to technological improvement. What will happen to the price of steel?
A
increase
B
decrease
C
stay the same
D
not enough information to answer the question
7) If Spam is an inferior good, an increase in income will shift the:
A
demand curve for Spam to the left.
B
demand curve for Spam to the right.
C
supply curve for Spam to the right.
D
supply curve for Spam to the left.
8) Which of the following is NOT an example of an economic indicator?
A
consumer price index
B
gross domestic product
C
consumer continuous index
D
the retail sales report
9) An unexpected spurt in GDP may indicate that the economy is overheating and __________ could result.
A
recession
B
depression
C
inflation
D
stagflation
10) An “increase in quantity demanded” means that:
A
price has declined and consumers will therefore wants to purchase more of the product.
B
the demand curve has shifted to the right.
C
the demand curve has shifted to the left.
D
given supply, the price of the product can be expected to decline.
11) When the reserve requirement is low, banks have ______________ money to lend to customers.
A
more
B
less
C
the same amount of
D
no
12) How would the government most likely respond to a period of rapid inflation?
A
lower taxes and decrease interest rates
B
increase taxes and increase interest rates
C
lower taxes and increase interest rates
D
increase taxes and lower interest rates
13) Which of the following is a component of GDP?
A
investment spending
B
government spending
C
consumer spending
D
all of the above
14) Early market economists argued that a market economy should be
A
left to adjust by itself.
B
watched closely by governing bodies.
C
none of the above
D
changed into a central economy, as they benefit the people more.
15) Equilibrium is also known as the
A
equal market price.
B
efficient market price.
C
supply/demand price.
D
market clearing price.
16) Cancer researchers have found hair dyes may be a cause of cancer. They found that people who dye their hair have a 50% greater chance of developing brain tumors. What will happen to the price and quantity in the market for hair dyes?
A
price will increase, quantity will decrease
B
price will decrease, quantity will decrease
C
price will increase, quantity will increase
D
price will decrease, quantity will increase
17) Which of the following newspaper headlines would explain a supply curve shift to the left in the market for automobiles?
A
Price of Rubber Expected to Rise in 3 Months
B
National Income Decreases 3%
C
Cost of Steel Decreases
D
ABC Auto Maker Closes It’s Doors After 35 Years
18) “When the price of Milky Ways increase, consumers increase purchases of Three Muskateers whose prices are now relatively lower.” This statement describes:
A
the substitution effect
B
change in consumer tastes/trends
C
the income effect
D
an inferior good
19) Which of the following newspaper headlines would explain a demand curve shift to the right in the market for coffee?
A
Studies Show That Drinking 2 Cups of Coffee Per Day Increases Life Expectancy
B
Studies Show That Drinking 2 Cups of Tea Per Day Increases Life Expectancy
C
Coffee Prices Drop
D
New Tax on Imported Coffee Beans from South America
20) Which of the following should you NOT do during a job interview?
A
Further explain items on your resume.
B
Brag about your accomplishments and why you are right for the job.
C
Have a set of questions prepared to ask the interviewer.
D
Be negative in order to tell the truth.
*select an answer for all questions
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