Midterm Flashcards
(88 cards)
1
Q
Deciding whether to do or use one additional unit of some resource
A
Thinking on the margin
2
Q
A phrase that refers to the trade-offs governments face
A
Guns or Butter
3
Q
An ambitious leader who creates new goods or services
A
Entrepreneur
4
Q
All human made goods that are used to produce other goods
A
Physical capital
5
Q
The effort that people devote to a task
A
Labor
6
Q
Physical objects (food, phones, etc.)
A
Goods
7
Q
An item that we desire but is not essential to live
A
Want
8
Q
The common sense science of how and why people, businesses, and governments make the choices they do
A
Economics
9
Q
Anything that is finite or limited in quantity
A
Scarcity
10
Q
Using wisely and well what God has given
A
Stewardship
11
Q
Determined due to the nature of the product
A
Intrinsic value
12
Q
Also known as a schedule and a popular method of explaining simple relationships between pairs
A
Tabular model
13
Q
Contains a horizontal and vertical axis
A
Line graph
14
Q
Provides a complete visual explanation of how a complete economic system functions
A
Circular Flow Model
15
Q
Land, labor, capital and entrepreneurship
A
Factors of production
16
Q
The payment made on borrowed money
A
Interest
17
Q
When government spending exceeds what it receives in taxes
A
Budget deficit
18
Q
The difference between revenues received and costs that go into production
A
Profit
19
Q
All payments for labor
A
Wages
20
Q
The activity of creating new and useful goods and services
A
Consumption expenditures
21
Q
Household spending on goods and services
A
Principle of Diminishing Marginal Utility
22
Q
A graph that shows an alternative way(s) to use an economy’s resources
A
Production Possibilities Curve
23
Q
The willingness of consumers to purchase the products and the actual act of purchasing it
A
Demand
24
Q
Goods that experience an increase in demand because of an increase of consumer incomes
A
Normal Goods
25
Goods that households use in place of others
Substitute Goods
26
Goods that are usually purchased or used together
Complementary Goods
27
Items that see a decline in sales as consumer income increases
Inferior Goods
28
When a demand curve shifts to the left or right
Change in Demand
29
When the government dictates that the price may not rise any higher
Price Ceiling
30
A barrier that prevents prices from falling below the market price
Price Floor
31
The price at which consumers are willing to take from the market; the exact quantity of a product that suppliers that will put in the market
Market Equilibrium Price
32
Supply fluctuations (Up or Down)
Change in Supply
33
What is the difference between an economic cost and an opportunity cost?
- Economic cost- the value people place on a good or service and is reflected by its price
- Opportunity cost- the satisfaction a person gives up or the regret experienced by not choosing differently
34
Why do instability and scarcity necessitate choice?
Choices are necessary because they pull a person in opposite directions; both cannot be satisfied.
35
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Explain and give an example of any three of the following:
>Good
>Service
>Free Good
>Nuisance Good
>Economic Service
>Free Service
```
```
-Good- physical objects
Ex. food items
-Service - non tangible good
Ex. buses
-Free good- physical goods you don't have to pay for
Ex. air and water
```
36
What is the difference between microeconomics and macroeconomics? Give examples of each.
- Microeconomics- choices made by individual units (U.S. Individuals)
- Macroeconomics- large scale economics (big companies)
37
What character quality is essential for the Christian to have victory over insatiability?
Contentment
38
What are the two purposes for economic models?
>Instruction
>Prediction of future events
39
For an economist, what is the primary value of a production possibilities curve?
A PPC enables an economist to see the maximum feasible amounts that a business can produce with its limited resources.
40
Name the four factors of production or the four payments business make in exchange for the factors of production.
Land, Labor, Capital, Entrepreneurship
Rent, Wages, Interest, Profit
41
Why is the financial market necessary for the effective functioning of a developed society?
Financial market takes the savings of houses and channels them to businesses so that the financial capital can help business firms operate effectively.
42
The willingness of businesses to produce more of their product at any given price
Increase of supply
43
With what economic principle do we most often associate Ludwig vos Mises?
Free market
44
Who identified the principle of diminishing marginal utility?
William Stanley Jevons
45
State the law of demand.
Everything else being held constant, the lower the price charged for a good or service, the greater the quantity people will demand and vise versa.
46
When an individual makes a decision at the margin, how does he determine the amount to obtain?
The individual chooses the amount to obtain at which the marginal benefit just offsets the marginal cost.
47
What four conditions may change the demand for a product?
- Change in people's incomes
- Change in price of related goods
- Change in people's tastes and preferences
- Change in people's expectations
48
What are the three functions of prices?
>Transmit information
>Provide incentives
>Redistribute income
49
State the law of supply.
The higher the price buyers are willing the pay, other things being held constant, the greater the quantity a supplier will be willing to produce and the inverse is true.
50
What occurs when the price of a product is higher than the price at which supply equals demand?
Surplus
51
What is the simplest solution to a surplus?
The producer lowers the price until the quantity demanded equals the quantity he has to supply.
52
Which way does a supply curve slope and why?
Slopes upward to the right indicating that the greater the price buyers are willing to pay for the product, the greater the quantity the firms will supply.
53
What three factors could lead to a change in supply?
- Changes in technology
- Changes in production cost
- Changes in the prices of related goods
54
True/ False
| Opportunity benefit is the regret you feel over a choice you made.
False
55
True/ False
| Positive economics refers to making value judgements about existing or proposed economics policies.
False
56
True/ False
| Normative economics observes economic choices and predicts economic events.
False
57
True/ False
| Menger proposed that an individual's decisions are based on personal utility.
True
58
True/ False
| Economics is considered a science.
True
59
True/ False
| A line graph provides more data than a tabular model.
True
60
True/ False
| On a PPC, the point on the curve represents inefficient production.
False
61
True/ False
| Financial capital is the tool that business firms use to produce goods and services.
False
62
True/ False
| Entrepreneurship is the most important factor of production.
True
63
True/ False
| Transfer payments involve the government.
True
64
True/ False
| If the government receives less in taxes than it is paying out, it is operating under a budget surplus.
False
65
True/ False
| Dissaving is any time households withdraw money from an account or borrow it.
True
66
True/ False
| Crowding out has nothing to do with governmental budget deficits.
False
67
True/ False
| A financial market is the collection of a nation's financial institutions.
True
68
True/ False
| Inferior goods increase in sales as consumer income increases.
False
69
True/ False
| When a demand curve stays the same, economists say that the product is experiencing a change in demand.
False
70
True/ False
| Whenever a change in price causes a change in the number of items demanded, a change in quantity demanded has occurred.
True
71
True/ False
| US currency is currently based on gold and silver.
False
72
True/ False
| According to the World Factbook, the USA now has the 3rd largest GDP in the world.
True
73
True/ False
The principle of diminishing marginal utility states that people tend to receive less and less additional satisfaction from any good or service as they receive more and more of it during a specific period of time.
True
74
True/ False
| Complementary goods work best when separated.
False
75
True/ False
| China has the largest GDP in the world.
True
76
True/ False
| The average American has no idea how bad our debt situation is.
True
77
True/ False
| A shift to the right on a supply schedule generally means that a decrease in supply has occurred.
False
78
True/ False
| When a supply schedule is plotted on a graph, it is called a supply curve.
True
79
True/ False
| Supply is the amount of goods and services business firms are willing and able to provide at different prices.
True
80
True/ False
| The point at which buyers and sellers disagree is called the market equilibrium point.
False
81
True/ False
| A surplus is an excess of unsold products.
True
82
Baby step 1
1,000 dollars in emergency fund
83
Baby step two
Pay off all debt except for house , utilizing debt snowball
84
Baby step 3
3 to 6 months of expenses in savings
85
Baby step 4
Invest 15% of your household income into Roth IRAs and pre tax reiterment plan
86
Baby step 5
College funding
87
Baby step 6
Pay of your home early
88
Baby step 7
Build wealth and give
