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Agricultural Economics > Test 1 Agricultural Economics > Flashcards

Test 1 Agricultural Economics Flashcards

1
Q

t/f the word equality means distributing society’s resources in the most efficient manner

A

false

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2
Q

what is an example of a tradeoff

A

choosing not to attend a concert so that you can study for your exam

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3
Q

t/f efficiency means everyone i the economy should receive an equal share of goods and services

A

False

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4
Q

t/f equality refers to how the pie is divided and efficiency refers to the size of the economic pie

A

True

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5
Q

what would happen to accountants opportunity cost if their wages rose?

A

their opportunity cost would go up

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6
Q

what is market failure

A

a situation in which the market does not allocate resources efficiently

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7
Q

what do you normally give up when you increase equality?

A

efficiency

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8
Q

what is one way the government can improve market outcomes

A

ensure that individuals are able to own and exercise control over their scarce resources

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9
Q

how do rational people make decisions at the margin

A

by comparing marginal cost and marginal benefits

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10
Q

why would Olivia not factor in expense of applying when deciding between 2 schools

A

that expense has already been accounted for and is in the past

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11
Q

economists view normative statements as…

A

prescriptive, making a claim about how the world ought to be

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12
Q

what allows countries to consume outside their production frontier

A

trade

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13
Q

t/f opportunity cost refers to how many inputs a producer requires to produce a good

A

false

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14
Q

what can you not have in both goods if you already have the comparative advantage in a market

A

absolute advantage

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15
Q

self sufficiency

A

can only consume what one produces

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16
Q

what allows for gains in trade

A

the differences in opportunity cost `

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17
Q

t/f trade allows a person to obtain goods at prices that are less than that person’s opportunity cost because each person specializes in the activity for which he or she has the lower opportunity cost

A

True

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18
Q

t/f if one producer is able o produce a good at a lower opportunity cost than some other producer, then the producers with the lower opportunity cost is said to have an absolute advantage in the production of that good

A

false

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19
Q

t/f international trade can make some individuals within a country worse off, even as it makes the country as a whole better

A

true

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20
Q

Formula for finding quantity opportunity cost

A

other good divided by asked about good

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21
Q

formula for finding time opportunity cost

A

asked about good divided by other good

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22
Q

in what kind of market are all goods offered for sale exactly the same

A

perfectly competitive

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23
Q

t/f all goods and services are sold in a perfectly competitive market

A

false

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24
Q

t/f a movement upward and to the left along a given demand curve is called a decrease in demand

A

false

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25
Q

t/f an increase in the price of pizza will shift the demand curve for pizza to the left

A

false (goes long demand curve)

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26
Q

t/f a decrease in the price of a complement will shift the demand curve for a good to the left

A

false

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27
Q

quantity supplied for sellers

A

the amount that sellers are willing and able to sell at a particular price

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28
Q

what does a decrease in supply do

A

shirts the supply curve to the left

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29
Q

t/f when a seller expects the price of its product to decrease in the future, the seller’s supply curve shifts left now

A

false

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30
Q

t/f in a market the price of any good adjusts until quantity demanded equals quantity supplied

A

true

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31
Q

t/f when a supply curve or a demand curve shifts, the equilibrium price and quantity change

A

true

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32
Q

t/f an increase in the price of maple syrup will decrease both the equilibrium price and the quantity in the market for pancakes on a suply curve

A

true

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33
Q

what does an increase in quantity demanded do

A

results in a movement downward and to the right along the demand curve

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34
Q

if an increase in income decreases the demand for a good then the good is a…

A

inferior good

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35
Q

a decrease in the price of a good will…

A

decrease quantity supplied

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36
Q

a decrease in quantity supplied…

A

results in a movement downward and to the left along a fixed supply curve

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37
Q

what do market economies use to allocate scarce resources

A

supply and demand

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38
Q

in a market economy supply and demand determine

A

both the quantity of each good produced and the price at which it is sold

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39
Q

a competitive market is one in which

A

there are so many buyers and so many sellers that each has a negligible impact on the price of the product

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40
Q

in markets prices move toward equilibrium because of

A

the actions of buyers and sellers

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41
Q

scarcity

A

the limited nature of societies resources

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42
Q

economics

A

the study of how society manages its scarce resources

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43
Q

efficiency

A

the property of society getting the most it can from its scarce resources
size of economic pie

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44
Q

equality

A

the property of distributing economic prosperity uniformly among the members of society
how the pie is divided into individual slices

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45
Q

opportunity cost

A

whatever must be given up to obtain some item

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46
Q

rational people

A

people who systematically and purposefully do the best they can to achieve their objectives

47
Q

marginal change

A

a small incremental adjustment to a plan of action

48
Q

incentive

A

something that induces a person to act

49
Q

market economy

A

an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

50
Q

property rights

A

the ability of an individual to own and exercise control over scarce resources

51
Q

market failure

A

a situation in which a market left on its own fails to allocate resources efficiently

52
Q

externality

A

the impact of one person’s actions on the well-being of a bystander

53
Q

market power

A

the ability of a single economic factor (or small group of factors) to have a substantial influence on market prices

54
Q

productivity

A

the quantity of goods and services produced from each unit of labor input

55
Q

inflation

A

an increase in the overall level of prices in the economy

56
Q

business cycle

A

fluctuations in economic activity, such as employment and production

57
Q

circular-flow diagram

A

a visual model of the economy that shows how dollars flow through markets among households and firms

58
Q

production possibilities frontier

A

a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology

59
Q

microeconomics

A

the study of how households and firms make decisions and how they interact in markets

60
Q

macroeconomics

A

the study of economy-wide phenomena, including inflation, unemployment, and economic growth

61
Q

positive statements

A

claims that attempt to describe the world as it is

facts

62
Q

normative statements

A

claims that attempt to prescribe how the world should be

opinion

63
Q

absolute advantage

A

the ability to produce a good using fewer inputs than another producer

64
Q

comparative advantage

A

the ability to produce a good at a lower opportunity cost than another producer

65
Q

imports

A

goods produced abroad and sold domestically

66
Q

exports

A

goods produced domestically and sold abroad

67
Q

market

A

a group of buyers and sellers of a particular good or service

68
Q

quantity demanded

A

the amount of a good that buyers are willing and able to purchase

69
Q

law of demand

A

the claim that, other things equal, the quantity demanded of a good falls when then price of a good rises

70
Q

demand schedule

A

a table that shows the relationship between the quantity demanded

71
Q

demand curve

A

a graph of the relationship between the price of a good and the quantity demanded

72
Q

normal good

A

a good for which other things equal and increase in income leads to an increase in demand

73
Q

inferior good

A

a good for which other things equal an increase in income leads to a decrease in demand

74
Q

substitutes

A

two goods for which an increase in the price of one leads to an increase in the demand for the other

75
Q

complements

A

two goods for which an increase in the price of one leads to a decrease in the demand for another

76
Q

quantity supplied

A

the amount of a good that sellers are willing and able to sell

77
Q

law of supply

A

the claim that other things equal the quantity supplied of a good rises when the price of the good rises

78
Q

supply schedule

A

a table that shows the relationship between the price of a good and the quantity supplied

79
Q

supply curve

A

a graph of the relationship between the price of a good and the quantity supplied

80
Q

equilibrium

A

a situation in which the market price has reached the level at which quantity supplied equals quantity demanded

81
Q

equilibrium price

A

the price that balances quantity supplied and quantity demanded

82
Q

equilibrium quantity

A

the quantity supplied and the quantity demanded at the equilibrium price

83
Q

surplus

A

a situation in which quantity supplied is greater than quantity demanded

84
Q

shortage

A

a situation in which quantity demanded is greater than quantity supplied

85
Q

law of supply and demand

A

the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance

86
Q

elasticity

A

a measure of the responsiveness of quantity supplied to a change in one of its determinants

87
Q

price elasticity of demand

A

a measure of how much the quantity demanded of a good responds to a change in the price of that good computed as the percentage change in quantity demanded divided by the percentage change in price

88
Q

total revenue

A

the amount paid by buyers and received by sellers of a good computed as the price of the good times the quantity sold

89
Q

price elasticity of supply

A

a measure of how much the quantity supplied of a good responds to a change in the price of that good computed as the percentage change in quantity supplied divided by the percentage change in price

90
Q

t/f the price elasticity of demand is defined as the percentage change in price divided by the percentage change in quantity demand

A

false

91
Q

t/f the flatter the demand curve that passes through a given point, the more elastic the demand

A

true

92
Q

t/f the demand for soap is more elastic than the demand for dove soap

A

false

93
Q

t/f the demand for bread is likely to be more elastic than the demand for solid gold bread plates

A

false

94
Q

t/f if a firm is facing elastic demand, then the firm should decrease price to increase revenue

A

true

95
Q

t/f demand for a good is said to be inelastic if the quantity demanded increases substantially when the price falls by a small amount

A

false

96
Q

what happens to slope and elasticity as we move downward and to the right along a linear, downward sloping, demand curve

A

slope remains constant but elasticity changes

97
Q

would milk have an elastic or inelastic demand

A

inelastic

98
Q

the greater the price elasticity of demand, the…

A

greater the responsiveness of quantity demanded to a change in price

99
Q

moving downward and to the right along a linear demand curve, we know that total revenue…

A

first increases, the decreases

100
Q

t/f government policies that improve equality usually increases efficiency at the same time

A

false, decrease

101
Q

t/f an individual deciding how to allocate her limited time is dealing with both scarcity and tradeoffs

A

true

102
Q

t/f the demand curve is the upward sloping line relating price and quantity demanded

A

false, downward

103
Q

t/f two countries can receive gains from trade even if one country has the absolute advantage in the production of both goods

A

true

104
Q

t/f to produce 100 bushels of wheat, Farmer A requires fewer inputs than Farmer B does. We can conclude that Farmer A has an absolute advantage in producing wheat over Farmer B

A

true

105
Q

t/f individual demand curves are summed vertically to obtain the market demand curve

A

false, horizontally

106
Q

t/f the flatter the demand curve that passes through a given point, the more elastic the demand

A

true

107
Q

t/f along the elastic portion of a linear demand curve, total revenue rises as price rises

A

false, falls

108
Q

t/f elasticity measures how responsive quantity is to changes in price

A

true

109
Q

“allowing all individuals access to Medicare and Medicaid for health insurance is the fair thing to do” is an example of what kin of statement

A

normative statement

110
Q

what is not a determinant of demand

A

the price of a resource that is used to produce the good

111
Q

a movement along the demand curve might be caused by a change in what

A

the price of a good or service that is being demanded

112
Q

lead is an important input in the production of crystal. If the price of lead decreases, then we would expect the supply of crystal to….

A

increase

113
Q

suppose you are in charge of setting prices at a local sandwich shop. The business needs to increase its total revenue, and your job is on the line. If the demand for sandwiches is elastic, you…

A

should decrease the price for sandwiches

Agricultural Economics (3 decks)

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