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Flashcards in economics 526-600 Deck (75):
1

imports are (leaks from/injections into) the real flow

injections into

2

true or false: a monopoly's marginal revenue curve is equal to its demand curve

FALSE

3

describe the characteristics of monopolistic competition

a large number of sellers, product differentiation, few barriers to entry or exit

4

a producer may become a if it obtains exclusive ownership of a resource

monopoly

5

describe the shape of the demand curve in an oligopoly

kinked

6

which market structure has a large number of sellers offering differentiated products with few barriers to entry

monopolistic competition

7

in a perfectly competitive market the demand curve for individual producers is completely

elastic

8

the u.s. constitution guarantees that people will not be deprived of their private property without __ of law

due process

9

what is a patent

an exclusive right to make or sell an invention over a fixed period

10

what is the term for laws that prohibit agreements requiring employers to hire only union members

right to work or open shop law

11

what is the term for an employer that only hires union labor

closed shop

12

collective bargaining is a tool used by what institution to increase workers wages

labor union

13

what is the difference between saving and investing

saving is abstinence from present consumption. investment is the use of resources for future production

14

what is a copyright

a right to exclusively control intellectual property

15

the market structure of a union

monopoly

16

labor unions often try to increase wages by __ the supply labor

decreasing

17

commons is another name for what type of good

public good

18

what is the term for the price paid for borrowing money for a period of time

interest rate

19

name some methods that labor unions use to raise wages

restricting the supply of labor, collective bargaining, increasing the demand for labor

20

the tragedy of the commons occurs when this type of good is abused

public good

21

money earned today can be spent months or years from now. during that time, money is serving which functions

a store of value

22

what are the three functions of money

a medium of exchange, a unit of account, and a store of value

23

money that is used in a transaction is serving which function

a medium of exchange

24

what does it mean for money to be a unit of account

it serves as a measure of value; goods and services can be compared based on how much money it takes to purchase them

25

the value of money is

instrumental

26

what physical properties must currency have for it to be an effective form of money

it must be durable; easy to transport, handle, and distinguish from other types of money; and difficult to counterfeit

27

about _ percent of the money used for daily transactions is in the forms of coins and currency

25

28

Describe characteristics of a monopoly

one firm, no close substitutes, high barriers to entry

29

What are some examples of artificial barriers to entry?

government regulation, import quotas and tariffs, patents, others

30

What is the structure of the market for automobiles?

oligopoly

31

In a perfect competitive market, demand is perfectly (elastic/inelastic).

elastic

32

True or False: In a monopoly, there are high barriers to entry.

TRUE

33

The auto industry is generally considered to be which type of market structure?

oligopoly

34

What type of market structure has only one buyer?

monopsony

35

A monopolistic competitive market has (one/few/many) sellers.

many

36

How are backpacks an example of monopolistic competition?

There are many producers of backpacks - Osprey, Gregory, Jansport, Eastpak, Lowe Alpine, REI, Arcteryx, among others - each trying to convince users that its products are different from the others.

37

Monopolies have an incentive to maximize profit by restricting (prices/output).

output

38

Why is advertising important in monopolistic competition?

In a monopolistic competitive market, firms compete by differentiating their products.

39

What is contrived scarcity?

Contrived scarcity occurs when a monopoly withholds goods from consumers in order to raise the price.

40

Which market structure has a large number of sellers offering identical products with no barriers to entry?

perfect competition

41

Competition among sellers tends to result in (higher/lower) prices.

lower

42

If there are no barriers to entry or exit, what does it mean for any individual firm?

It can enter or leave the market at any time.

43

As prices increase in a perfectly competitive market, what happens to the number of sellers?

The number of sellers increases because new producers have an incentive to enter the market.

44

Local telephone, electricity, and gas utilities generally have what type of market structure?

monopoly

45

What are two legal grants of exclusive ownership?

patents and copyrights

46

As prices increase in a perfectly competitive market, what happens to the number of buyers?

The number of buyers decreases because some buyers will seek substitutes.

47

If one firm in an oligopoly lowers its prices, other firms tend to (ignore/match) this increase.

match

48

What is the structure of the market for airline travel?

oligopoly

49

Competition among sellers tends to result in (better/worse) quality of goods and services/

better

50

What is a price taker?

a firm that must "take" (accept) the market price

51

A perfectly competitive market has (one/few/many) sellers.

many

52

What is the structure of the market for wheat?

perfect competition

53

Competition among buyers tends to result in (higher/lower) prices.

higher

54

An oligopoly has (one/few/many) sellers.

few

55

the new deal provided a test of whose economic theory

john maynard keynes

56

what does it mean for some of the national debt to be externally held?

external debt is owed to foreign individuals firms banks and govts

57

which economist wrote the general theory of employment, interest, and money?

john maynard keynes

58

if the marginal propensity to consume (MPC) is .8, what is the govt expenditure multiplier

5

59

what might have caused an almost tenfold increase in the national debt between 1935 and 1945?

the new deal's income security and govt spending programs, as well as spending on ww2

60

currently, the national debt is about how much per person in the us?

about 20,000$ perperson

61

what does it mean for some of the national debt to be internally held?

internal debt is owed to parties within the us

62

if a govt spends more than it receives in revenue during a given year, it is running _____

a deficit

63

if a govt spends less than it receives in revenue during a given year, it is running _____

a surplus

64

the national debt increased from under one trillion dollars in 1980 to about how many trillion dollars in 1990?

three

65

what is contractionary fiscal policy?

govt intervention to slow rising inflation

66

what are the two most important tools for the govt in implementing fiscal policy?

govt spending and taxes; either can be increased or decreased

67

increased taxes result in (lower/higher) GPD

lower

68

what does "loose money" mean with regard to the federal reserves?

it means the fed reserve is undertaking policies that encourage the growth of the money supply

69

how does the marginal propensity to consume relate to the multiplier effect?

the MPC indecates the amount of each dollar pumped into the economy that will be re-spent

70

what is expansionary fiscal policy?

govt intervention to increase GDP and decrease unemployment

71

what prompted the creation of the fed reserve

the money panic of 1907

72

which banks must belong to the fed reserve system,?

national banks (banks operating in more that one state)

73

explain the difference between debt and deficit

a budget deficit is the amount by which govt spending exceeds tax revenue in a given year. The natl debt is the total outstanding securities and interest obligations of the fed govt

74

how does the fed reserve manipulate the money supply?

the fed buys and and sells us securities and raises and lowers interest rates in order to stimulate or stifle growth as it deems necessary

75

into how many districts is the fed reserve divided?

12