ECON REVIEW

Question 1

Ancient Greek word of Economics

Answer 1

Oikonomia

Question 2

The Father of Economics

Answer 2

Adam Smith

Question 3

The process that transforms scarce resources into useful goods and services

Answer 3

Production

Question 4

These are products or things that have been produced in the past but are now being used directly or indirectly to satisfy human wants.

Answer 4

Resources

Question 5

It is the condition in which national output is growing steadily with low inflation and full employment of resources.

Answer 5

Stability

Question 6

It refers to the behavior of individuals, companies, and industries.

Answer 6

Microeconomics

Question 7

It happens when nations exchange goods with each other and they expect to gain from exchange

Answer 7

Trade

Question 8

T/F
Gains from trade requires specialization according to absolute advantage

Answer 8

False

Question 9

It is the ability of a person to perform an activity or produce a good or service at a lower opportunity cost

Answer 9

Comparative Advantage

Question 10

It means the ability of a party to produce a particular good at a lower absolute cost than another.

Answer 10

Absolute Advantage

Question 11

It is a model showing the basic economic relationships within a market economy

Answer 11

Circular Flow of Economic

Question 12

The primary producing units in an economy

Answer 12

Firm

Question 13

T/F
Gains from trade requires specialization according to comparative advantage, not according to absolute advantage

Answer 13

True

Question 14

T/F
The exchange of resources can likewise increase their skill level

Answer 14

True

Question 15

The consuming units in an economy

Answer 15

Household

Question 16

T/F
Everyone always has a comparative advantage at something, but may not have an absolute advantage

Answer 16

True

Question 17

Economics is the study of
__________________
that nature and past generations have provided

Answer 17

how individuals, firms and societies choose to use the scarce resources,

Question 18

Three Basic Questions asked in economics

Answer 18

1. What gets produced?
2. How is it produced?
3. Who gets what is produced?

Question 19

If the problem is scarcity, what is the solution?

Answer 19

Production

Question 20

Two Markets in Microeconomics

Answer 20

Output Market & Input Market

Question 21

Two Kinds of Output Markets

Answer 21

Goods & Services

Question 22

Four Kinds of Input/Input Markets

Answer 22

Land, Labor, Capital and Entrepreneurial Mind

Question 23

Concept of Opportunity Cost

Answer 23

The best alternative that we give up, or
forgo, when we make a choice or decision.

Question 24

Income paid for the use of capital

Answer 24

Interest

Question 25

The input/factor market in which households supply work for wages to firms that demand labor.

Answer 25

Labor Market

Question 26

The input/factor market in which households supply their savings, for interest or for claims to future profits, to firms that demand funds to buy capital goods.

Answer 26

Capital Market

Question 27

What kind of slope does a demand curve have?

Answer 27

Negative slope

Question 28

Goods for which demand tends to fall when income rises.

Answer 28

Income Goods

Question 29

The process by which the market system allocates goods and services to consumers when quantity demanded exceeds quantity supplied.

Answer 29

Price Rationing

Question 30

The total loss of producer and consumer surplus from underproduction or overproduction.

Answer 30

Deadweight loss