Explain how productivity, economic growth, and future standards of living are influenced by investment in factories, machinery, new technology, and the health, education, and training of people.

Multiple Choice Question Test

SSEF1 Explain why limited productive resources and unlimited wants result in scarcity, opportunity cost, and tradeoffs for individuals, business, and governments

Define Scarcity

What are the four productive resources?

Provide an example of each productive resources.

What are the four motivations that influence entrepreneurs to take a risk in a market economy?

Define Opportunity Cost

Provide an example of an opportunity cost.

SSEF2 Give examples of how rational decision making entails comparing the marginal benefits and the marginal costs of an action
Define marginal cost and marginal benefit.

Explain what makes a decision rational

Give an example of a rational decision that you have made this semester.

What is a positive incentive? What is a negative incentive? Explain how people react to each

 

SSEF3 Explain how specialization and voluntary exchange influence buyers and sellers

Explain what it means to specialize in labor.

What are two advantages and two disadvantages to specializing in labor?

Explain how both parties gain as a result of non-fraudulent exchange

 

SSEF4 Compare and contrast different economic systems and explain how they answer the three basic economic questions.

What are the three basic questions that all economies must answer?

What are the four economic systems?

What does each economic system say about private ownership? Profit motive? Consumer sovereignty?

What are the 8 goals of all economic systems?

Explain how each economic system meets or does not meet all 8 goals

What are the 8 strategies for allocating scarce resources?

Explain all 8 Strategies for allocating scarce resources

 

SSEF5 Describe the roles of government in the United States economy
Explain why the U.S. government protects property rights and redistributes income.

Explain how both regulation and deregulation effects both consumers and producers.

 

SSEF6 Explain how productivity, economic growth, and future standards of living are influenced by investment in factories, machinery, new technology, and the health, education, and training of people
Define productivity.

How does investing in technology lead to economic growth?

Explain how investing in human capital can lead to a higher standard of living.

Draw a Production Possibilities Curve.
Draw a Production Possibilities Curve
Show the following:
-Inefficiency
-Efficiency
-Growth
-Opportunity costs
-Trade-offs

 

SSEMI1 The student will describe how households, businesses, and government are interdependent, and interact through the flows of goods, services, and money

Draw a circular flow diagram that includes the product market, resource (factor) market, households, and firms. Explain how goods and services circulate between the four parts.

Explain the difference between a product market and a factor market.

 

SSEMI2 Explain how the law of demand, the law of supply, and prices work to determine production and distribution in a market economy.
Define the law of supply. Define the law of demand

What is the difference between supply and quantity supplied? What is the difference between demand and quantity demanded?

What do we call the market clearing price? How do buyers and sellers determine the market clearing price? Draw a graph showing the market clearing price.

What are the five determinants (shifters) of demand?

What are the five determinants (shifters) of supply?

Draw a graph with a supply curve. Show and increase and decrease of supply. Draw a graph with a demand curve. Show an increase and decrease of demand.

What is a price ceiling? Why would the government use it? What will a price ceiling always create? Draw a graph illustrating a price ceiling.

What is a price floor? Why would the government use it? What will a price floor always create? Draw a graph illustrating a price floor.

 

SSEMI3 Explain the organization and role of business and analyze the four types of market structures in the U.S. economy
What are the three forms of business organization?

For each business organization, identify the number of owners, the liability, the lifespan, the taxation, and the decision making.

List the four market structures in order from most competitive to least competitive.

For each of the four market structures identify, the number of sellers, the barriers to entry, price control, and product differentiation.

 

SSEMA1 Illustrate the means by which economic activity is measured
What are the three goals of the macro economy?

Define GDP. What are the four components of GDP? Write the GDP formula. What is the largest component of GDP? What is the only component of GDP that can be a negative number?

What kind of person is considered to be unemployed?
What is the formula to calculate the unemployment rate?
What is inflation?

What is the CPI?

What is aggregate supply and aggregate demand?

How is the unemployment CPI, inflation, and real GDP used to evaluate the macroeconomic goals? Explain each one separately.

What is the difference between real GDP and nominal GDP? Which one is more important and why?

Who benefits from unanticipated inflation?

Who loses from unanticipated inflation?

What is seasonal unemployment? Give an example.

What is structural unemployment? Give an example.

What is cyclical unemployment? Give an example.

What is frictional unemployment? Give an example.

Explain what is happening with GDP at each stage of the business cycle.

 

SSEMA2 Explain the role and function of the Federal Reserve System

Explain the role and function of money

What are the three parts of the Federal Reserve System and who is in each part?

Define monetary policy, who controls it?

What are the four tools of monetary policy?

Explain how the Federal Reserve uses the four tools of monetary policy to grow the economy.

Explain how the Federal Reserve uses the four tools of monetary policy to contract the economy

 

SSEMA3 Explain how the government uses fiscal policy to promote price stability, full employment, and economic growth
Define fiscal policy. Who controls it?

How does the Federal Government use fiscal policy to grow the economy?

How does the Federal Government use fiscal policy to contract the economy?

What is the difference between deficit and debt? How do budget deficits or surpluses impact the national debt?

 

SSEIN1 Explain why individuals, businesses, and governments trade goods and services

What does it mean if a nation has absolute advantage over another nation?

What does it mean if a nation has comparative advantage over another nation?

Why does most trade take place?

What does it mean to have a favorable balance of trade or a trade surplus? What does it mean to have a trade deficit?

Who has the absolute advantage in the production of shirts and hats?

Who has the comparative advantage in the production of shirts?

Who has the comparative advantage in the production of hats?

 

SSEIN2 Explain why countries sometimes erect trade barriers and sometimes advocate for free trade

What is a tariff? What are two reasons the Federal government would impose a tariff on a foreign producer?

What is quota? Why would the Federal Government use it?

What is an embargo? Why would the Federal Government use it?

What are subsides? How would the Federal Government use it as a trade barrier?

What are standards? How would the Federal Government use them as a trade barrier?

Identify two costs and two benefits of trade barriers for producers

Identify two costs and two benefits of trade barriers for consumer

What is the purpose of a trading bloc? Identify three trading blocs.

 

SSEIN3 Explain how changes in exchange rates can have an impact on the purchasing power of groups in the United States and in other countries

Define exchange rates

$1 USD = 15.6 Mexican Pesos
2017
$1 USD = 19.1 Mexican Pesos

Which currency appreciated? Which currency depreciated?

 

SSEPF1 Apply rational decision making to personal spending and saving choices

Provide 1 cost and 1 benefit for a person choosing to do each of the following after high school
1. Go to college
2. Enlist in the military
3. Enter the workforce
4. Go to technical school

List 10 expenses that would go into a typical American family budget. Explain one large expense that a family might also budget for to attain in the future.

 

SSEPF2 Explain that banks and other financial institutions are business that channel funds from savers to investors

Explain the need and situation for a consumer to use the services of each of the following financial institutions. Also, explain how competitive the interest would be at each institution
1. Banks
2. Credit Unions
3. Pay Day Lender
4. Title pawn Lenders

Why is there a difference between interest charged and interest earned?

Explain an investment option that would carry little risk.

Explain an investment option that would carry a higher risk.

 

SSEPF3 Explain how changes in taxation can have an impact on an individual’s spending and saving choices

What is a progressive tax? What is an example?

What is a regressive tax? What is an example?

What is a proportional tax? What is an example?

 

SSEPF4 Evaluate the costs and benefits of using credit

List 4 factors that would affect a person’s credit worthiness.

What is APR

What is the difference between simple interest and compound interest?

 

SSEPF5 Describe how insurance and other risk-management strategies protect against financial loss

What is the purpose of buying insurance?

What is a premium? What is a deductible?

List and describe two types of insurance that a consumer would buy.

 

SSEPF6 Describe how earnings of workers are determined in the market place

Identify five skills that are required in order to be successful in the workplace.

Explain how investment in education and skill training relates to future earnings.