Chapter 1-3 exam

Question 1

the social science concerned with efficient use if scarce (limited) resources to maximize the satisfaction of people’s wants

Answer 1

economics

Question 2

3 decisión makers?

Answer 2

household, government, and businesses

Question 3

4 resource categories/ 4 factors of production

Answer 3

land, labor, capital (physical & financial), & entrepreneurship (supply creates its own demand)

Question 4

2 efficiencies

Answer 4

least cost (productive efficiency)
most wanted (allocative)

Question 5

Satisfaction = ?

Answer 5

happiness or utility

Question 6

we assume that people are…?

Answer 6

rational (not random) maximizers

Question 7

scientific method to quantify economic behaviors steps;?

Answer 7

1. an issue/ problem
   2.a hypothesis
2. a theory

Question 8

the theory for the u.s applies to all other countries & times

Answer 8

Principle/ law

Question 9

a model?

Answer 9

a set of principles/ laws

Question 10

the process or finding the explanations to the problem ( based on facts; “what is”

Answer 10

theoretical economics

Question 11

the process of using the theoretical findings to create the solutions to the problem (based on value judgment; “what it ought to be”)

Answer 11

policy economics

Question 12

a study to aggregate (national level) decisions

Answer 12

macroeconómics

Question 13

a study of a specific (a subset of the national level) decision

Answer 13

microeconomics

Question 14

equation of a straight line

Answer 14

y = a + b*X

Question 15

y is…

Answer 15

dependent

Question 16

x is….

Answer 16

independent

Question 17

a is the….

Answer 17

constant term or vertical intercept on a graph

Question 18

b is the….

Answer 18

slope or impact of x on y

Question 19

ceteris paribus is…

Answer 19

holding all other things unchanged

Question 20

a more general equation..?

Answer 20

y= a + b1 + x1 + ( b2 + x2 + b3 + x3 +….. bn xn)

Question 21

a negative relationship or….

Answer 21

an inverse relationship

Question 22

a postive slope or….

Answer 22

a direct relationship

Question 23

the market system

Answer 23

capitalism

Question 24

command system

Answer 24

socialism/communism

Question 25

the ownership of resources;

Answer 25

1. private ownership for the market system 2. government for the command system

Question 26

the coordination methods;

Answer 26

1. market and price for the market system 2. central planning for the command system

Question 27

the u.s (hybrid system)

Answer 27

capitalistic: 80% socialistic: 20%

Question 28

laissez- faire capitalism

Answer 28

pure capitalism ( no government) hands off or let it be

Question 29

private property

Answer 29

increase efficiency; protect property

Question 30

four market structures;

Answer 30

1. pure competition 2. monopolistic competition 3.oligopoly 4.pure monopoly

Question 31

determination by consumers of the types and quantities of good and services will be produced wit the scarce resources of the economy

Answer 31

consumer sovereignty

Question 32

the “votes” that consumers and entrepreneurs cast for production of consumer and capital goods, respectively when they purchase those goods in product and resource markets

Answer 32

dollar votes

Question 33

productive efficiency

Answer 33

least cost efficiency

Question 34

creative destruction

Answer 34

ie. dvd vs video cassette

Question 35

circular flow model

Answer 35

no governments; pure capitalism

Question 36

the model (demand & supply)

Answer 36

analyzing one product a time ( one market at a time)

Question 37

the market price (p*) and market quantity (q*) determination

Answer 37

i. negotiations and agreements between buyers ( consumer p) and sellers ( producers p)— two conflicting market forces

Question 38

model assumptions like (pure competition—> infinite producers

Answer 38

1. large numbers of independently acting producers 2. large numbers of independently acting consumers 3. standardized (average) products

Question 39

a schedule or cute that shows various amounts of a product ( Q d = quantity demanded) that consumers are willing and able to purchase at each of a series of possible prices (P) during a specified period of time

Answer 39

Demand (Market Demand)

Question 40

From individual buyers ( thus individual demand curves) to the specific…

Answer 40

market demand

Question 41

a schedule or curve showing the amounts of a product that consumers are willing and able to make available for sale (Q= quantity supplied) at each of a series of possible prices (P) during a specified time

Answer 41

Supply ( Markeg Supply)

Question 42

From individual producers ( this individual supply curves) to..

Answer 42

market supply

Question 43

producers respond to….

Answer 43

profits when P changes, assuming change cost = 0