Final Exam

Question 1

Service Industry

Answer 1

Industry made up of companies that primarily earn revenue through providing intangible products and services.

Question 2

Services Job %

Answer 2

77%

Question 3

Service Types

Answer 3

Consumer
Production
Public

Question 4

Production Services are related to:

Answer 4

Manufacturing
Utilities
Mining
Construction

Question 5

Consumer Services are related to:

Answer 5

Households
Consumers

Question 6

Blue Collar

Answer 6

Manual Labor

Question 7

White Collar

Answer 7

Office Jobs

Question 8

Pink Collar

Answer 8

Jobs associated with women i.e. nurses

Question 9

Knowledge Economy

Answer 9

National wealth will come increasingly out of intellectual activity.

Question 10

Monopoly

Answer 10

A single producer controls the whole supply of a single commodity with no close competitor.

Question 11

Oligopoly

Answer 11

A market dominated by a few large firms.

Question 12

Antitrust Laws

Answer 12

Laws that regulate the conduct and organization of businesses to promote competition and prevent unjustified monopolies.

Question 13

Sharing Economy

Answer 13

Information, products and places can be rented or ‘shared’

Question 14

Net Imports also known as:

Answer 14

Trade balance

Question 15

Mercantilism

Answer 15

Belief in the benefits of profitable trading; commercialism.

Question 16

Free Trade

Answer 16

Policy in which gov’ts. do not put put any restrictions on imports / exports

Question 17

Absolute Advantage

Answer 17

The ability of a party to produce a good or service more efficiently than its competitors.

Question 18

Comparative Advantage

Answer 18

Countries should specialize in producing those goods which they are relatively more efficient producers

These countries should then trade with the rest of the world to obtain needed resources

Question 19

Heckscher-Ohlin Model

Answer 19

Theory stating that countries export what they can most easily and abundantly produce.

Question 20

Trade Protectionism / Current Tariffs

Answer 20

Runs counter to the concepts of absolute and comparative advantages in free trade.

Question 21

Tariffs

Answer 21

Tax levied on a good when it crosses a national border

Question 22

Neo-Mercantilism

Answer 22

Focus on increasing production, employment, and thus standard of living through trade restrictions and commercial development.

Question 23

Great Depression Tariffs

Answer 23

In 1931 the American Congress passed the Smoot Hawley Tariff to keep foreign goods out of the depressed American market and protect US jobs and companies. President Hoover signed the bill.

Notice the economists who argued against the tariffs.

As the economists predicted, the tariff set off a world trade war as other countries retaliated.

The tariffs depressed the world economy further.

Question 24

GATT

Answer 24

General Agreement on Tariffs and Trade

Regulates international trade

Question 25

WTO

Answer 25

World Trade Organization International organization dealing with the global rules of trade between nations

Question 26

Capital Goods

Answer 26

Goods + Services which are not land or labor and which produce other goods / services Examples: Machinery Vehicles Offices

Question 27

Intermediate Goods

Answer 27

The ingredients / components of finished goods

Question 28

Final Goods

Answer 28

A good that the final consumer consuimes.

Question 29

Consumer Goods

Answer 29

Goods bought and used by consumers, rather than by manufacturers for producing other goods.

Question 30

Price Theory

Answer 30

Suggests that prices are the basic coordinating mechanism in a free market

Question 31

Producer Surplus Equation

Answer 31

( Market Price - Minimum Price to Sell) * Quantity Sold

Question 32

Market Failure

Answer 32

Happens when the price mechanism fails to allocate scarce resources efficiently

Question 33

Free Good

Answer 33

Good w/ no opportunity cost

Question 34

Private Good

Answer 34

Rivalry and Exculadbility

Question 35

Public Good

Answer 35

Non-Rivalry , Non-Excludable

Question 36

Adam Smith Duties of Gov't.

Answer 36

- Provide Justice System - Provide for the common defense - Provide public goods - Laissez

Question 37

Nationalisation

Answer 37

Process of taking an industry / assets into public sector by a national gov't.

Question 38

Monetary Policy

Answer 38

Mgmt. of interest rates and amount of money in circulation

Question 39

Fiscal Policy

Answer 39

Gov't. policies of taxes, regulation, and spending on public goods and services

Question 40

Federal Reserve System Functions

Answer 40

1. Clearing Checks 2. Acting as the Federal Gov'ts. Fiscal Agent 3. Supervising Member Banks 4. Regulating the money supply 5. Setting reserve requirements 6. Supplying paper currency

Question 41

Barter

Answer 41

Exchange goods / services with goods / services