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Globalization — Cumulative exam Answers

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The chart shows the marginal cost of producing apple pies.This chart demonstrates that the marginal cost

Question illustration
A
initially decreases as production increases.
B
initially increases as production increases.
C
eventually decreases as production increases.
D
eventually increases as production decreases.
22
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Supporters of a communist revolution hoped it would lead to a government in which workers were

A
equal owners of property and goods.
B
expected to follow a dictator.
C
equal economically and socially.
D
expected to create businesses.
23

The graph below shows the value of the US dollar versus the Canadian dollar.

Question illustration
A
October 2012.
B
November 2012.
C
February 2013.
D
March 2013.
24

A certificate of deposit pays a higher interest rate than a savings account because the money is

A
guaranteed by the government.
B
kept by banks for a longer time period.
C
loaned to banks by consumers.
D
immediately available to consumers.
25

The graph shows a demand curve with the price of a good compared to the quantity demanded.What does this graph demonstrate?

Question illustration
A
the amount of microwaves produced increases the price
B
the amount of microwaves produced decreases the price
C
the price decreases with a larger quantity demanded
D
the price increases with a larger quantity demanded
26

When the government injects money into the economy, consumers may have more disposable income, which may lead to

A
higher unemployment.
B
higher production.
C
lower production.
D
increases in taxes.
27

Hayek believed that the economy could be hard to measure because

A
individuals have the power to make decisions and are unpredictable.
B
individuals have the power to make decisions and are predictable.
C
government has the power to make decisions and is unpredictable.
D
government has the power to make decisions and is predictable.
28

Who was Adam Smith?

A
He was a philosopher who promoted the idea of free enterprise.
B
He was an economist who spoke against the market economy.
C
He was an official who ran an important government agency.
D
He was a producer who operated a factory in Scotland.
29

The Fed may respond to a recession by

A
discouraging consumer borrowing.
B
decreasing interest rates.
C
decreasing government spending.
D
decreasing available credit.
30

In a mixed market economy, what is a typical way the government can reduce unemployment?

A
The government can pay for projects to create work.
B
The government can control new factories to provide jobs.
C
The government can create new farm fields to hire workers.
D
The government can raise taxes to encourage employment.
31

Which best describes why governments enact tariffs?

A
to reduce the price of domestic products
B
to discourage consumers from purchasing foreign goods
C
to limit the sale of foreign goods
D
to ensure that domestic producers make a profit
32

President Roslin of Country XYZ knows that a new policy is needed to help solve the problem of rising unemployment in her nation. Her next step is to

A
develop a plan.
B
implement a plan.
C
identify the problem.
D
solve the problem.
33

Which statement best describes on-the-job training?

A
An employer typically pays for it in order to educate an employee.
B
The student pays for it, and it is required in many professions.
C
It usually takes two years and tends to focus on technical training.
D
It lasts for several years, and it often takes four years to earn a degree.
34

How do trade agreements help the countries involved?

A
by restricting imports
B
by accelerating production
C
by expanding tax revenues
D
by decreasing trade barriers
35

The law of supply states that as the price of a good declines, the quantity supplied of that good

A
remains the same.
B
decreases.
C
increases.
D
disappears.
36

What is the role of the three questions of economics?

A
to assess product profitability
B
to aid in production decisions
C
to offset a poor economy
D
to determine quality and cost
37

Public property is land or goods

A
owned by an individual.
B
owned by the government.
C
used for private businesses.
D
used to gain personal wealth.
38

Which is the best definition of hyperinflation?

A
a gradual decrease in the price of goods and services
B
a gradual increase in the price of goods and services
C
an exponential decrease in the price of goods and services
D
an exponential increase in the price of goods and services
39

Which situation is an example of comparative advantage in an international market?

A
Country A decides to grow extra potatoes so they have more to export, while Country B does not grow potatoes to export.
B
Factories in Country A and Country B produce the same number of tablet computers. Country A’s factories could be used instead to build more laptops than the factories in Country B.
C
Country A invests in a new technology while Country B chooses to invest in education.
D
Country A can produce 100 units of rice per acre of farmland, while Country B can only produce 70 units of rice per acre of farmland using the same resources.
40

It costs Cool Clothes Company $15 to produce one pair of jeans, but they needed to discontinue production of shirts to focus on jeans. For this company, the $15 is the _______, and discontinuation of shirt production is considered their __________.

A
opportunity cost; production cost
B
production cost; resource cost
C
production cost; opportunity cost
D
resource cost; production cost

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