Econ Test 3

Question 1

What type of a good is a truck used by a florist to deliver flowers?

Answer 1

Capital

Question 2

Which group favored a natural economy?

Answer 2

Physiocrats

Question 3

If Gordon accounting business had expenses = 90k and revenues totaling 115k last year but he could have had a salary of 80k working for someone else what was his opportunity cost.

Answer 3

55k

Question 4

What states that when the price of a good falls consumers tend to buy more of that good.

Answer 4

Income Effect

Question 5

What type good does not last more than 3 years.

Answer 5

Non-Durable Good

Question 6

What type of good is directly related to a consumers income?

Answer 6

Normal Good

Question 7

What type of economic system is controlled by a centralized authority?

Answer 7

Command

Question 8

What type of economic system is based upon custom heredity and cast?

Answer 8

Traditional

Question 9

Besides limited gov. And freedom of enterprise and competition to what does the free market economy owe it’s proficiency?

Answer 9

Property Rights

Question 10

What is a group of firms that produce similar products or provide similar services?

Answer 10

Industry

Question 11

What is the American automobile industry an example of?

Answer 11

Oligopoly

Question 11

What is the retail clothing industry in a large city an example of?

Answer 11

Monopolistic Competition

Question 12

Adam Smith

Answer 12

Invisible Hand

Question 13

Carl Menger

Answer 13

Diamond Water Paradox

Question 14

E.I. DuPont

Answer 14

Gunpowder Entrepreneur

Question 15

David Recardo

Answer 15

Comparative Advantage

Question 15

Henry Ford

Answer 15

Mass Production

Question 16

Pierre Samuel DuPont

Answer 16

Physiocracy

Question 17

What is the study of the choices that individuals and societies make in production distribution and consumption of goods?

Answer 17

Economics

Question 18

What are the four factors of production?

Answer 18

-Labor
-Entrepreneurship
-Natural Resources
-Capital

Question 19

What is the name of Adam Smiths most famous book?

Answer 19

“The Wealth of Nations”

Question 20

What is a list of numbers that compares price with quantity demanded?

Answer 20

Demand Schedule

Question 21

If firm A can produce 50 shoes or 40 coats with the same amount of resources from which firm B can produce 45 coats or 65 shoes, which firm has the comparative advantage in coats?

Answer 21

Firm A

Question 22

What governmental agency investigates trade practices?

Answer 22

FTC (Federal Trade Commission)

Question 23

What was the first act implemented in 1890 to regulate monopolistic trusts?

Answer 23

Sherman Act

Question 24

What antitrust act was passed in 1914 that addressed practices not addressed in earlier laws?

Answer 24

Clayton Act

Question 25

What 3 things is mass production based on?

Answer 25

Division of Labor, Standardized Parts, and Automatic Conveyance

Question 26

What is the production of goods in which a country or region has absolute or comparative advantage?

Answer 26

Geographic Specialization

Question 27

What makes possible a better standard living for everyone in prosperous society?

Answer 27

Competition

Question 28

What do consumers send to producers to let them know what foods are whited at what prices?

Answer 28

Market Signals

Question 29

What term deals with the study of specific components within a major economy?

Answer 29

Micro-Economics

Question 30

What is an illegal system developed to avoid governmental regulations?

Answer 30

Black Market

Question 31

What is the exchange of goods in the absence of governmental restrictions or penalties?

Answer 31

Free Trade

Question 32

Tax on imported goods.

Answer 32

Tariffs

Question 33

Amount of satisfaction resulting from a one unit increase of a product.

Answer 33

Marginal Utility

Question 34

Total amount invested in the production of a good.

Answer 34

Input

Question 35

Total value of a business minus any liabilities.

Answer 35

Equity

Question 36

Value of the best alternative that is foregone when a different alternative is taken.

Answer 36

Opportunity Cost

Question 37

The place at which quantity demanded and quantity supplied are equal.

Answer 37

Equilibrium

Question 38

Forces the consumer to buy certain products before he is able to buy what he really wants.

Answer 38

Tying Contract

Question 39

Excess of the total revenue paid by buyers for goods over the seller's total expense of producing those goods.

Answer 39

Profit

Question 40

Total amount of satisfaction received from a particular amount of some good.

Answer 40

Total Utility

Question 41

(T or F) One way to improve efficiency is to keep output constant and INCREASE input.

Answer 41

Decrease

Question 42

(T or F) When the demand for a good increases, the good's equilibrium price tends to INCREASE.

Answer 42

True

Question 43

(T or F) If the supply of tennis rackets increased while the demand remained steady, stores would likely INCREASE the prices of rackets.

Answer 43

Decrease

Question 44

(T or F) The value of a good varies according to its utility and its SCARCITY.

Answer 44

True

Question 45

(T or F) ABSOLUTE advantage is the ability of an entity to produce a good or provide a service at an opportunity cost that is lower than that of another producer.

Answer 45

Comparative

Question 46

(T or F) The TOTAL cost is the sum cost of all the factors of production used in making goods

Answer 46

True

Question 47

(T or F) A NATURAL monopoly occurs when a single firm can fill the demand for a good more efficiently.

Answer 47

True

Question 48

(T or F) A SERVICE is a tangible item for which people will pay.

Answer 48

Good

Question 49

(T or F) A CONSUMER is an individual who provides goods.

Answer 49

Producer

Question 50

(T or F) SUPPLY is the relationship between a good's priced and the amount that producers are willing to make available.

Answer 50

True

Question 51

(T or F) PROFICIENCY is the quality of producing effectively with a minimum of waste.

Answer 51

Efficiency

Question 52

(T or F) The result of a price ceiling would be a SHORTAGE.

Answer 52

True

Question 53

(T or F) A failing business should continue production as long as total revenue exceeds VARIABLE costs.

Answer 53

Fixed

Question 54

(T or F) A decrease in the DEMAND for workers is caused by increased wages.

Answer 54

True

Question 55

(T or F) A ppc bending INWARD signifies that two goods are best produced in moderation with each other.

Answer 55

Outward

Question 56

(T or F) A CONSERVATIVE economic philosophy seeks full employment over economic growth and stability.

Answer 56

Liberal

Question 57

Blocked entry to market.

Answer 57

Monopoly

Question 58

Produce a standardized product.

Answer 58

Perfect Competition

Question 59

Few firms in entire industry.

Answer 59

Oligopoly

Question 60

Significant entry barriers.

Answer 60

Oligopolies

Question 61

Large number of firms.

Answer 61

Monopolistic Competition

Question 62

No close substitutes for firm's products.

Answer 62

Monopolies

Question 63

Large number of independent buyers and sellers.

Answer 63

Perfect Competition

Question 64

Sole supplier of a good or service.

Answer 64

Monopoly

Question 65

Total amount of a good produced.

Answer 65

Output

Question 66

ESSAY: Since businesses see monopolies and collaborating oligopolies as economically appealing why are they rare in a country with a free market.

Answer 66

Freedom for firms If only a few new firms would be attracted to market and attempt to grow with better quality. (Consumer choice, Competition, and Government Regulation.)