Exam 1 Flashcards

1
Q

The basic economic problem is

A

economic scarcity and unlimited economic wants

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2
Q

the individual who brings together economic resources and assumes the risk in a capitalist economy is called the

A

entrepreneur

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3
Q

which is not an economic resource?

A

Money

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4
Q

if an economy is being “productively efficient” then that means the economy is using

A

the least costly production techniques

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5
Q

with allocative efficiency

A

resources are used in their most appropriate and acceptable application

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6
Q

which is one of the four simplifying assumptions made in the chapter about the construction of the production possibilities model?

A

the economy is fully employed and is using the least cost methods of production

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7
Q

refer to the table. the total opportunity cost of the three units of steel is

A

45 wheat

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8
Q

refer to the above graph. the marginal opportunity cost of the fourth units of bread is

A

0 drill presses

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9
Q

The graph above shows the production possibilities curve for an economy producing two goods X and Y. which of the points of the graph indicate unemployment resources?

A

E and A

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10
Q

If an economy that produces capital and consumer goods is operating at a point on its production possibilities curve, this indicates that

A

more capital goods can be produced only at the cost of some consumer goods.

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11
Q

The private ownership of property resources and use of prices to direct and coordinate economic activity is characteristic of

A

the market system

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12
Q

the institution which coordinates actions of consumers and producers to establish prices for goods and services is known as

A

a market

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13
Q

in a competitive market for corn, the law of demand indicates that , other things equal, as

A

the price of corn decreases, the quantity of corn demand will increase.

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14
Q

a result of a fall in the price of gasoline, consumers buy more gasoline and take more driving vacations. this situation is an illustration of

A

income effect

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15
Q

the horizontal axis of a graph which shows a market demand curve indicates the

A

quantities which consumers will be willing and able to buy at various prices

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16
Q

refer to the above table. the quantity demanded for wheat is

A

37 bushels at 4 and 52 bushels at 3

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17
Q

refer to the above table. at a price of 6, the market demand for bushels of wheat among the three buyers in the market is

A

17

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18
Q

which is a determinant of demand>

A

income

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19
Q

which will not cause a change in the demand for product a

A

a change in the price of A

20
Q

which goods would usually be an inferior good?

A

generic goods

21
Q

for some products, purchases tend to decrease as the buyers income increases such products are known as

A

inferior goods

22
Q

refer to the above diagram, which shows three demand curves for coffee. which would cause the change in the demand for coffee illustrated by the shift from D1 to D2

A

decrease in the price of tea

23
Q

if two goods are close substitutes

A

a fall in one will decrease the demand for the other

24
Q

Which factor will increase the demand for product

A

quantity demanded

25
if the price of K declines, the demand curve for the complementary product J will
shift to the right
26
refer to the above graph, which shows the market for chicken where D1 and D2 represent different demand curves. A change from E1 to E2 is most likely to result from
a decrease in consumer incomes
27
when economists say that the demand for a product has decreases, they mean that
the product price has increased and as a consequence consumers are buying less product
28
an increase in the price of product G will result in
a smaller quantity of G demanded
29
Refer to the above graph. An increase in quantity demanded would be a movement from point
line A to line B
30
Suppose that the demand curve for wheat is downward sloping and the price per bushel increases from 4.50 to 5.50. we would expect
the quantity demand of wheat to fall
31
the law of supply is illustrated by a supply curve that is
upward sloping
32
which is a determinant of supply?
technology
33
refer to the above diagram illustrating the market for corn. the equilibrium price and quantity in this market are
8 bushels for 3
34
refer to the above diagram illustrating the market for corn. if the price in this market were ti be fixed at 4 per bushel, the part of the line marked A would represent
surplus of 8000 bushels
35
select the graph above the best shows the change to demand or supply in a particular market given the following situation: in the market for coats, the wearing of leather coats becomes more fashionable among young consumers
graph a
36
sole proprietorship constitute approximately what proportion of business firms in the United States
75 percent
37
What basic economies function does the government perform when it protects product quality
maintaing competition
38
if the production of a product results in sizable spillover costs, an appropriate government policy might be able to
tax the producers and thus shifting the supply curve to the left
39
what type of economic flow would be illustrated by the purchase of a mexican candy making factory by a US corporation
financial flow
40
specialization and international trade will
result in a rightward shift in a nations production possibilities curve
41
the depreciation of the US dollar relative to the French franc would make a vacation trip
the united states less expensive for the french
42
the dollar price of a euro in the above market would be
50
43
a person receives a paper asset from a corporation that is a promise from the corporation to repay a loan at a fixed rate of interest. this type of asset is referred to as a
bond
44
the term double taxation refers to the fact that
taxes are paid on corporate profits and then stockholders pay taxes on the dividends they receive
45
the two largest sources of revenue for the federal government are
corporate and personal income tax