Test 1 Flashcards by Chase LaRue

Technological Change is a key force in shaping today’s economy, true false

True

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The gross domestic product is the dollar value of all goods and services produced by the economy, true false

True

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A centrally planned economy encourages investment and innovation, true false

False

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Globalization is the exchange of ______ among countries

Money and other financial assets
Workers and jobs
Good Services ideas and people
Communications

Goods services ideas and people

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A laissez-faire economy has ____

Rules that promote social equality
Very little government regulation of the economy
Centrally planned economy
A large amount of government regulation

Very little government regulation of the economy

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Top down management of an economy by the government generally ______

Causes significant increase in GDP
Leads to low rates of economic growth
Creates incentives and opportunities for businesses to expand
Produces exponential results in economic growth

Leads to low rates of economic growth

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Which of the following is not a monetary measure of economic prosperity

Life expectancy
Household consumption
Gross domestic product
Annual household income

Life expectancy

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Besides the gross domestic product, another measure of how well an economy is doing is

Presidential popularity polls
Publications and economic journals
Annual household income
Government tax rates

Annual household income

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Financial markets do not include, which of the following

Stock markets
Nonprofit organizations
Banks
Government regulatory agencies

Nonprofit organizations

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Federal taxes have, which of the following effects on the economy

If taxes are increased, the economy expand due to a balanced budget
If taxes are decreased, businesses will invest the difference back into the economy
There is no definitive agreement on the effect
Lower federal taxes will cause budget surplus

There is no definitive agreement on the effect

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For the United States one important benefit of foreign trade is

Access to cheaper goods and services
Less domestic competition
Reality check in the economy
Hires tax revenues from tariffs

Access to cheaper goods and services

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An example of a company that uses financial market to raise money is

The Social Security administration
Your local carryout restaurant
A local television news website
Ford motor company

Ford motor company

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Which of the following countries have safety nets that offer a better retirement, benefits and more job security than the US safety net?

European countries
Asian countries
South American countries
Our nearest neighbors

European countries

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Renewable energy sources provided blank of US energy needs as of 2022

13%
10%
Almost 100%
77%

13%

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Most people have mixed feelings about the financial markets because

The stock market always falls in the long run
They provide means for the average person to become wealthy
They are controlled by government regulators
They can experience violent swings

They can experience violent swings

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Which of the following is not mentioned in the textbook is one of its three goals

Showing the way in which the possibilities of today’s economy are expanding
Promoting and understanding of markets
Teaching how to successfully invest money in the stock market
Presenting the basic tools of economics

Teaching how to successfully invest money in the stock market

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The textbook says that which the following is among the key forces shaping today’s economy
Social networking
The evolution of financial markets
Socialism
Accounting scandals

The evolution of financial markets

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Supposed the government decides to eliminate some, but not all of the rules that govern how investment banks conduct their business this would be an example of

Central planning
Economic competition
Deregulation
A laissez-faire policy

Deregulation

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Gross domestic product is

Not a useful indicator of prosperity
The only indicator of prosperity that economist use
One of many indicators of prosperity, all of monetary nature
One of many indicators, prosperity, some of which are some of which are not

One of many indicators of prosperity, some of which are monetary, and some of which are not

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Which of the following does not explain why there are so many disagreements among the economist

In some cases, the controversy is aggravated by political agendas
In some cases, economist have simply not investigated the issue at hand
In some cases, individuals may stand from policy changes
In some cases there isn’t enough data to answer the question

In some cases, economist have simply not investigated the issue at hand

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In a market, buyers and sellers

Are in the same place
Compete with one another
Undermine the proper functioning of the economy
Exchange goods and services for money

Exchange goods and services for money

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Which of the following gives the best reasons why the possibilities of choices of today’s economy are expanding?

Because they constraints that affect their economy, change every day
Because people are more enlightened today than in the past
Because worldwide population continues to grow
Because laws continue to change more activities legal

Because the constraints that affect the economy change every day

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Who competes with whom in a market?

Sellers compete with other sellers buyers are not part of the competition
Buyers compete with other buyers and sellers compete with other sellers
Buyers and sellers compete with each other
Buyers and sellers compete with the government

Buyers compete with other buyers and sellers compete with other sellers

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Which of the following cell significant declines between late 2007 and early 2009

House pricing only
Stock prices, housing prices and the US economy
Stock prices and housing prices only
The US economy only

Stock prices, housing prices and the US economy

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Which of the following is not a good indicator of prosperity Environmental quality The size of the safety net Results from surveys of happiness Life expectancy

The size of the safety net

Individuals in a market economy can be both buyers and sellers true false

True

Buyers and sellers who are geographically close to each other are part of the national market true false

False

The law of supply says that higher prices tend to blank the quantity of goods or services blank, assuming no other changes Decrease supplied Increase supplied Increase demand Decreased demanded

Increase supplied

The demand schedule is a description of the behavior of blank in the market Goods or services Labor Buyers Sellers

Buyers

Opportunity cost is defined as the value or benefit of the Equilibrium price Least valuable item Most valuable item Next best alternative

Next best alternative

The way that economist explain it the worker is a blank in the blank market Buyer labor Seller labor Seller job Buyer job

Seller labor

If at the market price of $10 per lawn, Maya is willing to mow 15 lawns and at the market price of $15 per lawn. Maya is willing to mow 25 lawns. What does Maya supply curve look like? It’s slopes down to the right It slopes up and to the right It is a vertical line It is a horizontal line

It’s slopes up into the right

In economics satiation means Eventually, the marginal value of the good consumed decreases Quantity demanded and quantity supplied rises The market prices been attained Eventually, the marginal value of the consumed increases

Eventually, the marginal value of the good consumed to decreases

What would it mean if a demand curve sloped upward into the right? Quantity demanded in price both can only decrease Quantity demanded increases as the price increases Quantity demanded in price both can only increase Quantity demanded decreases as the price increases

Quantity demanded increases the price increases

One of the biggest benefits of a market-based economy is Government regulation The ability to adapt quickly to change Consumer protection policies Central planning

The ability to adapt quickly to change

Buying a used textbook from a fellow student is an example of what type of market Labor Local Global National

Local

What phrase do economics use to describe the assumption that everything else about a situation stays the same allowing only one variable such as price to change Caveat emptor Vini vidi vici Ceteris paribus E pluribus unum

Ceteris paribus

When you have to give up one opportunity in order to choose another, the value of the opportunity that is not chosen is called the Choice equilibrium Opportunity cost Opportunity price Forgone value

Opportunity cost

What typically happens when the market price for haircuts rise Cutting hair would be less profitable Some hair salons might hire more stylist Some salons might close Some stylist would work fewer hours

Some hair salons might hire more stylists

The demand schedule reports the quantity demanded at The market equilibrium price The average of all prices Many different prices Zero price

Many different prices

The individual quantity demanded is the amount the blank is willing to blank at a given price Buyer purchase Seller purchase Seller sell Buyer sell

Buyer purchase

A graph plot price versus quantity when price is five dollars quantity is 100 when price is $20. Quantity is 400 a line is drawn from one point of interception to the other graph is pictured above is most likely. Demand curve because it’s an upward slope Demand curve because it’s downward slope Supply curve because it’s an upward slope Supply curve it’s a downward slope

Supply curve because it’s an upward slope

The law of demand says that the most cases of the lower the price the lower the quantity demanded true false

False

The loft man suggests that most demand curves will be Curved Downward sloping A straight line Upward sloping

Downward sloping

Access demand generally causes prices to fall true false

False

Excess supply occurs when suppliers prepared to sell more at a certain price than buyers are prepared to purchase true false

True

Left to themselves most markets will tend towards market equilibrium, true false

True

A demand shift is a change in the amount of sellers want to supply at various prices true false

False

Government action can cause a significant market demand shift, true false

True

For most goods and services and increase and income will cause the demand curve to shift to the left true false

False

With inferior goods demand will increase with an increase in income, true false

False

If supply is inelastic, then a demand shift will have a bigger effect on quantity then on price true false

False

Market equilibrium is the point where quantity supplied and blank are equal Market price Quantity demanded Equilibrium supply Quantity sold

Quantity demanded

The price of which the quantity supply equals quantity demanded is the equilibrium price Opportunity cost Negotiated price Market price

Equilibrium price

A demand shift effects Buyers willingness to purchase at the equilibrium price only Sellers willingness to sell at the equilibrium price only Sellers willingness to sell a various prices Buyers willingness to purchase various prices

Buyers willingness to purchase a various prices

Movement along the demand curve means a demand schedule blank in the price blank Stays the same changes Stays the same, also stays the same Changes also changes Changes stays the same same

Stays the same changes

Luxury good is one whose demand blank is income increases Rises sharply Decreases sharply Does not change Rises proportionately

Rises sharply

Demand is an elastic if That a man curve is bowed outward away from the origin The quantity demand does not change very much, even if the prices change drastically The quantity demanded changes more or less proportionally with the price The curve and towards the origin

The quantity demanded not change very much, even if the prices changed drastically

If supplies in elastic, then a demand shift will have a blank effect on blank Bigger quantity them on price Bigger price than on quantity Big, both quantity and price Smaller price then on quantity

Bigger price than on quantity

How many government causes a man shift to the right? By increasing taxes By causing a shift and consumer tastes By regulating supplies By requiring consumers to purchase certain products

Requiring consumers to purchase certain products

In the long run, hotel room prices that are falling as a result of excess supply will blank the quantity of hotel room supplied in the market Decrease Increase Stabilize Destabilize

Decrease

A demand shift to the right generally leads to Lower prices and lower quantities Lower prices and higher quantities Higher prices and higher quantities Higher prices and lower quantities

Higher prices and higher quantities

What will happen as a result of an increase in demand? Equilibrium price and quantity both rise Equilibrium price falls an equilibrium quantity rises Equilibrium price rises, equilibrium quantity falls Equilibrium price rises and quantity both fall

Equilibrium price and quantity both rise

What will happen as a result of an increase in supply? Equilibrium price and quantity both rise Equilibrium price falls, and equilibrium quantity rises Equilibrium price and quantity both fall Equilibrium price rises in equilibrium quantity falls

Equilibrium price falls, and equilibrium quantity rises

Inputs for a business or the goods and services that it sells to its customers true false

False

Revenue was the money that customers pay for the output of the business true false

True

Cost is what a business receives after subtracting expenses from revenue true false

False

The marginal product of labor is the extra amount of output. A firm can generate by adding one or more unit of labor true false.

True

The average product is calculated by dividing total inputs by the number of hours worked to true false

False

Marginal cost is the added expense producing one more unit of output true false

True

Variable costs or short term cost and fix costs or long-term costs true false

True

What is the difference between revenue and cost? Profit Output Input Production

Profit

What name is given to the process of turning inputs in the outputs of a business will sell to customers Production Revenue Profit maximization Profit

Production

The hours of work supplied by various types of workers are referred to by an economist as The marginal product The business know how Wage hours Labor

Labor

If you add too much of anyone input, your business is likely to experience Accelerated product function Diminishing marginal cost Increasing marginal revenue Diminishing marginal product

Diminishing marginal product

Output divided by the number of hours worked or by the number of workers is called Average product Marginal product Average input Marginal revenue

Average product

The price per unit of labor times the amount of labor used equals the Labor input Labor cost Marginal cost Marginal labor

Labor cost

Marginal cost generally rises as Average cost falls Quantity produced rises Quantity produced falls Average cost rises

Quantity produced rises

Blank is the amount of money accompany receives for selling its product or service Cost Profit Revenue Average marginal revenue

Revenue

A profit maximizing business will increase production as long as Average product exceeds marginal price Marginal revenue, exceeds marginal cost Marginal price exceeds average product Marginal cost exceeds marginal revenue

Marginal revenue, exceeds marginal cost

Theodore can make six pizzas in one hour if Theodore labor has a diminishing marginal product what must be true about the number of pizzas that Theodore can produce in three hours It must be equal to 18 It must be greater than 18 it must be less than 12 It must be less than 18

It must be less than 18

If Sarah can produce 25 muffins for a total cost of 15, but her production process is subject to increasing marginal costs, which of the following can be the total cost of producing 100 muffins 15 60 80 20

If June can earn $1500 in revenue from painting two houses how much can she earn in revenue from painting three houses? Less than $2250 More than $2250 Exactly 4500 Exactly $2250

Exactly $2250

Suppose a local food truck owner occurs a total cost of $200 per month even if he makes Incel no food but that is total cost rises to $202 if he makes and sells one hamburger, which of the following is true

His fixed cost is $200. The marginal cost of the hamburger is two dollars.

Suppose a local food truck representing a small part of an overall very large market can sell 20 hamburgers for 100 total and can sell 30 hamburgers for 150 total which of the following is not true The marginal revenue for the 20th hamburgers five dollars The marginal revenue for the 30th hamburgers five dollars The total revenue for the 20th hamburger is five dollars The price of the hamburgers five dollars

The total revenue of the 20th hamburger is five dollars

If by selling one or more unit of a good a certain business can increase revenue from $500-$525. What is the marginal revenue in this case? $25 500 525 Marginal revenue cannot be calculated without knowing the quantity

$25

In 2022 Starbucks had 32.3 billion in revenue and made a gross profit of 21.9 billion what it costs in 2022 10.4 billion 1.4 billion 54.1 billion 27.1 billion

10.4 billion

Imperfect competition all buyers and sellers are price takers true false

True

Imperfect competition, if there are no barriers to entry, only lowest cost, businesses will survive in the long run, true or false

True

A business can escape perfect competition by building a better more innovative, product true false

True

Monopolistic competition is characterized by A limited number of sellers with a variety of products, one seller with a variety of products One seller with a standardized product A large number of sellers with similar products

A large number of sellers with similar products

And oligopoly occurs when there Are a large number of sellers in a market producing a variety of products Are a large number of sellers producing similar products Is only one seller in market Only a few sellers in market

Are only a few sellers in the market

Blank collusion can occur when oligopolistic businesses do not directly communicate with each other Explicit Implicit Marginal Ordinary

Implicit

An example of a barrier to entry is Lack of key resource Plentiful natural resources Low cost resources Helpful government regulation

Lack of key resources

The four main types of market structure are Land labor, capital and business know how Perfect competition, monopolistic, competition, oligopoly, and monopoly Marginal cost of marginal revenue, product and price Average average cost long run short run

Perfect competition, monopolistic competition oligopoly monopoly

The profit maximizing rule says that any seller role expand output up to the point where Marginal revenue is less than the price Marginal revenue equals marginal cost Marginal revenue equals price Marginal cost equals price

Marginal revenue equals marginal cost

The easiest way to have a monopoly today is To have the government protect you Own everything in your market Have a strong business plan To be in socialistic country

To have the government protect you

Market power is Another term for equilibrium The ability to rise prices above perfectly competitive prices The balance between average and marginal product The combination of price and product

The ability to raise prices above perfectly competitive prices

For a given market, a profit maximizing monopolist would always charge blank a firm in perfect competition Higher price then A price equal to marginal cost unlike A price equal to marginal cost just like A lower price than

A higher price than

If all the restaurants restaurants in a small town, colluded agreed to raise dinner prices this will lead to a loss to society because Some dinners that could be served would not be served The restaurant will become too crowded with new customers Collusion is illegal The number of dinner serve stay the same, but the buyers face higher prices

Some dinners that could be served would not be served

Imperfect competition P =MC means Prophet equals marginal cost Price equals market cost Price equals marginal cost Profit equals market cost

Price equals marginal cost

Differentiating ones product from the product of one’s competitor as a way to Escape, perfect competition Cause profit to tend towards zero Become a price taker Increase the degree of competition

Escape, perfect competition

Most markets meet all of the conditions for perfect competition true false

False

The public sector include state, local governments, as well as the federal government true false

True

Private sector includes privately owned businesses and for-profit divisions of various governments true false

False

The new deal was a government outgrowth of World War II truth false

False

The era of deregulation began as a result of the governments failed response to the oil price shock of 1973 true false

True

An example of command and control approaches public education, true false

True

The new deal was Legislation passed by the Roosevelt administration The name of the television game show in the 1930s A government agency that regulated auto dealerships The cornerstone of the Kennedy administration

Legislation passed by the Roosevelt administration

Which of the following was not part of the new deal? Medicare Federal minimum wage Unemployment insurance Social Security

Medicare

The oil price shock of 1973 was caused by The drawing up of two major US oil wells A series of earthquakes in Venezuela The overthrow of the Iranian government by terrorist Embargo by the organization of petroleum exporting countries OPEC

OPEC

The government government share of employees peaks during the 1970s 1940s 1960s 1930s

1940s

The wage and price control of 1971 was an example of A mixed approach A command and control approach Market-based economics Free enterprise

A command and control approach

Rent seeking behavior refers to Companies that spend money on influencing government rather than nonprofit increasing strategies A transfer of knowledge between private and public sectors Companies try to increase profit or improving products Consumer real estate studies on versing buying

Companies that spend money on influencing government than nonprofit increasing strategies

Imposing attack on a market generally hurts Either buyers or sellers but never both Both buyers and sellers Sellers more than buyers Buyers more than sellers

Both buyers and sellers

The free rider problem can occur when Government regulates the public transit system The government tax is a good service Goods are provided to an individual who receives the benefit, but not pay for it Welfare programs are not regulated well enough

Public goods are provided to an individual who receives the benefit, but not pay for them

Blank means the government set the rules for market competition Market regulation Market dynamics Government metrics Market economics

Market regulation

The Uniform Commercial Code governs Commercial transactions between companies and consumers What can be broadcast on public Airways? Commercial transactions between the United States and the foreign countries International commerce transactions

Commercial transactions between companies and consumers

The securities and exchange commission regulates The stock market Auto insurance companies Non-monetary exchanges like bartering Security and alarm companies

Stock markets

Which of the following is not a type of externality? Market externality Network externality Positive externality Negative externality

Market externality

The disadvantages of government intervention include Incentive problems Reduced regulation Lower taxation Achieving desirable goals

Incentive problems

The unintentional impact that the actions of an individual can have on others is called The network effect An externality A public good The free rider problem

An externality

When one person’s actions harm others economist say that a blank is present Negative externality Market external Network externality Antitrust externality

Negative externality

A commanded control approach to government regulation works best when There is a significant agreement on the goals, but not on the best ways to achieve them There’s a significant agreement on the goals and the best way to achieve them There’s a significant disagreement on the goals of government regulation Markets can and will produce socially desirable economic outcomes

There is a significant agreement on the goals and the best ways to achieve them

Test 1 Flashcards

(125 cards)