Exam 1 Flashcards
(46 cards)
In economics, scarcity means that
Society’s desires exceed resources available.
C) Society’s desires exceed resources available.
A consequence of the economic problem of scarcity is that
Choices have to be made about how resources are used.
A) Choices have to be made about how resources are used.
The basic factors of production include
Land, labor, capital, and entrepreneurship.
D) Land, labor, capital, and entrepreneurship.
Which economist argued that free markets unleashed the ‘animal spirits’ of entrepreneurs, propelling innovation, technology, and growth?
John Maynard Keynes.
D) John Maynard Keynes.
The ‘guns versus butter’ dilemma that all nations confront is that
An increase in national defense implies more sacrifices of civilian goods and services.
B) An increase in national defense implies more sacrifices of civilian goods and services.
A point on a nation’s production possibilities curve represents
The full employment of resources to achieve a particular combination of goods and services.
D) The full employment of resources to achieve a particular combination of goods and services.
What could cause a shift of the production possibilities curve from PP1 to PP2?
The use of improved production technology.
Example sentence: Implementing new machinery and equipment can lead to an increase in productivity.
Which of the following is true about the combination of televisions and smartphones represented by point F in Figure 1.4?
Point F can possibly be reached if more economic resources become available or technology improves.
Example sentence: Point F in Figure 1.4 represents a scenario where the combination of televisions and smartphones is feasible under certain conditions.
What could cause a shift of the production possibilities curve from PP1 to PP2 in Figure 1.4?
Implementation of training programs that improve the skills of workers.
Example: Providing specialized training to employees to enhance their productivity.
Where will this economy achieve efficiency in production according to Figure 1.7?
Points D, G, and J.
Refer to Figure 1.7
Approximately how much of the world’s output does the United States produce?
18 percent.
Example sentence: The United States produces 18 percent of the world’s output.
What is the measure of final goods and services produced in the United States?
GDP of the United States.
The measure of final goods and services produced in the United States is the GDP of the United States.
Approximately how much of the world’s output does China produce?
approximately 11 percent.
Example sentence: China’s production accounts for approximately 11 percent of the world’s output.
Which of the following statements is true about the U.S. economy?
The United States produces nearly one-fifth of the world’s production.
No additional information.
What is Per capita GDP?
The dollar value of GDP divided by total population.
No additional information.
What do those interested in assessing the relative standard of living of different countries look at?
Per capita GDP.
No additional information.
What percentage of the world’s population subsists on incomes of less than $3 a day?
40 percent.
No additional information.
What has been a century-long trend in the United States?
Relative decline in manufacturing to the service sector.
No additional information.
As of the year 2000, what percentage of total U.S. output did services account for?
80 percent.
No additional information.
Which of the following definitely means productivity has increased?
More output from fewer workers.
Example: A company producing more units with fewer employees indicates increased productivity.
The goal of the consumer in a market economy is to use his or her limited income to buy
The set of goods and services that maximizes the consumer’s total utility.
Example: Consumers aim to purchase goods and services that provide the most satisfaction within their budget constraints.
A buyer is said to have a demand for a good only when
The buyer is both willing and able to purchase the good.
Example: Demand exists when a buyer is not only interested in a product but also has the financial means to acquire it.
The most desired goods or services that are given up when a choice is made are called the
Opportunity cost.
Example: If you choose to spend money on a vacation, the opportunity cost is the potential alternative uses of that money, such as saving for a new car.
Peanut butter and jelly are complements. A decrease in the price of one will result in
An increase in the demand for the other.
Example sentence: If the price of peanut butter decreases, the demand for jelly will increase.
