Econ exam review – Flashcards
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"Morgan is a college senior who is triple-majoring in marketing, woman's studies, and economics. She hopes to land a job with a national women's magazine after she graduates." In the statement above economics refers to...
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A field of study or expertise
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Which of these statements is an example of normative economics? A)"taxes ought to be lowered" B)"inflation is higher this year" C)"the bond market is in decline" D)"speculation caused a recession"
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A)"taxes ought to be lowered"
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Which of these words is most closely related to tradeoffs? A) incentives B) margin C) markets D) scarcity
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D) scarcity Scarcity forced tradeoffs
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The exchange of one benefit or advantage for another that is thought to be better
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Tradeoff
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A simplified representation of reality that allows economists to focus on the effects of one change at a time
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Economic model
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In a recent speech the king said that "we should support those _____ who are willing to risk their own, personal fortunes to make the world a better place"
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Entrepreneurs
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"The US department of labor is expected to announce its fourth-quarter unemployment statistics this afternoon. Some experts are predicting that harsh winter storms will have had a negative effect to the national economy and that unemployment will have gone up." In the statement above economy refers to... A) all of the businesses that employ workers B) our nations system of managing resources for the production, consumption, and distribution of goods and services C) the politicians who make our country's laws D) the increase or decrease in the number of unemployment workers
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B) our nations system of managing resources for the production, consumption, and distribution of goods and services
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"If you now the lawn, I'll take you out for pizza afterward" This statement is an example of which economic principle?
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Incentives matter
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"Our government should raise taxes to pay for improving highways and bridges" In the statement above, saying what the government should do is an example of...
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Normative economics
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"Lowering taxes has had a dramatic effect on education funding. As the graph shows, over the past five years, cuts to public school funding have averaged 8.5% per year, despite the fact that his school enrollments has increased during each of those years." In the statement above, using facts to demonstrate that education funding actually declined by a specific percentage each year is an example of...
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Positive economics
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"In the 1970s the organization of petroleum exporting countries imposed an oil embargo on the US cutting off a large portion of its fuel supply. As a result Americans faced rising gasoline prices and gasoline rationing." The fuel situation described is a clear example of the economic concept known as...
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Scarcity
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Certainly such ventures require a tremendous amount of _____ _____ so the King has declared that any profits made on such "patriotic endeavors" shall be 100% tax free for the next 20 years.
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Financial capital
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However due to a skilled labor _____ and technical areas such as engineering and computer science the government of Tonga has eased immigration restrictions in hopes of attracting immigrants who possess the necessary _____ _____ to fill such positions
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Shortage, human capital
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Indeed, "While Tonga is blessed with two of the three _____ _____ _____, our workforce training programs need to be vastly improved if our nation is going to be able to compete at economically," the king said
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Factors of production
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Island residents of Tonga are not entirely in favor of the Kings modernization efforts. Riodo Guobi, spokesman for the Islands timber industry, says that "the island already has three windfarms which produce more electrical energy than the island can use, so the _____ of building even more of them would be questionable." He added, "The people of Tonga would benefit more if that money were invested in education and public health"
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Utility
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Renée Blakely of the Marine stewardship Council supports the Kings new policies, however. She notes that "the _____ of Tonga's fishing industry has been declining steadily for the past three years so anything that gives those fish populations a chance to come back at least to 2010 levels is okay by me!"
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Productivity
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Only time will tell if the Kings vision for the island nation will bring economic growth and a healthier environment. Often times the _____ _____of achieving one goal is the sacrifice of the other.
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Opportunity cost
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The value of the next best alternative that is given up when making a choice.
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Opportunity cost
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The resources used to produce goods and services
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Factors of production
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A simple model of an economy that shows all the combinations of two goods that can be produced with the resources and technology currently available
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PPF curve
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The willingness and ability to take risks involved in starting and managing a business
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Entrepreneurship
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A measure of the efficiency with which goods and services are produced
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Productivity
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The tools, machines, and buildings used to produce goods and services
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Capital
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Peoples wants are unlimited. This fact means that _____ is always present
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Scarcity
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What are the factors of production?
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Land, labor, and capital
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Why is the standard of living in japan much higher than in Nigeria
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Greater human capital
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What is the best title for the list below? •innovator •strategist •risk taker
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Entrepreneur
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Which of these items is a measure of productivity? A) years of education B) bushels of corn per acre C) number of workers employed D) dollars invested in new equipment
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B) bushels of corn per acre
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Why are tradeoffs necessary?
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Resources are limited
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When Amy returns a good library book without finishing it so she won't have to pay a late fee, what is her opportunity cost?
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Finishing the book
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What does it mean to maximize utility?
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To gain the most satisfaction possible
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Which scenario best illustrates the law of diminishing marginal utility? A) a car breaks down more often as it gets older B) a collector of china figurines is eager to get a new one C)someone who doesn't listen to music does not care about getting a new cd D) a new toy is less exciting to a child with many toys than to a child with just a few
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D) a new toy is less exciting to a child with many toys than to a child with just a few
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An economic system in which decisions are left up to producers and consumers
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Market economy
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An economic system in which both the government and individuals play important roles in production and consumption
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Mixed economy
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An economic system in which decisions about production and consumption are made by a powerful ruler or government
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Command economy
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The three fundamental economic questions are what to produce, _____, and for whom.
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How
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Which economic goal is most important in a traditional economy?
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Stability
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What does Adam smiths idea of an "invisible hand" represent?
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The way that markets coordinate trade
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What kind of economy is most important today?
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Mixed
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What would government do in a model free-enterprise system?
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Protect property rights and enforce contracts
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Which economic system most emphasizes freedom and efficiency?
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Market
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Which economic system most emphasizes stability and security?
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Traditional
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Which economic system most emphasizes security and equity?
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Command
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The characteristic of a society in which people rely on others for most of the goods and services they want
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Economic interdependence
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The allocation of separate tasks to different people
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Division of labor
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The act of willingly trading one item for another (both parties gain something from it)
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Voluntary exchange
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The condition that exists when someone can produce a good or a service at a lower opportunity cost than someone else
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Comparative advantage
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The development of skills or knowledge in one aspect of a job or field of interest
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Specialization
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The condition that exists when someone can produce a good or a service using fewer resources than someone else
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Absolute advantage
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Which is the best example of specialization? A) a surf shop lowers the price on swimsuit B) a dry cleaner spend extra time on grease spots C) an assistant in a tailoring shop only replaces zippers D) an online clothing outlet offers customized monograms
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C) an assistant in a tailoring shop only replaces zippers
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How does division of labor increase productivity?
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Workers become expert at one task
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What is the main reason Americans specialize more today than the Earle pioneers did?
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We have more access to markets
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In a voluntary exchange, why do people give something up?
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To get something they want more
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What does it mean to say Jen has a comparative advantage over Julian for weeding peoples gardens?
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Jens opportunity cost for weeding is lower than Julian's
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What is the main reason for national differences in comparative advantage in producing raw material?
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Differences in allocation of natural resources
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Why has much of the clothing market moved from the United States to other countries?
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Nations with large, low-skilled workforce a have a comparative advantage for assembly-line production
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How does trade increase the value of an item?
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It transfers the item to someone who values it more
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Which term best describes the fact that we depend on others to produce most of the goods and services we want?
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Economic interdependence
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The quantity of a good or service that consumers are both willing and able to buy at various prices
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Demand
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A measure of the degree to which the quantity demanded or supplied of a good or service changes in response to change in price
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Elasticity
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An economic law stating that as the price of a good or service increases, the quantity demanded decreases, and vice versa
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Law of demand
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The quantity of a good or service that producers are willing and able to offer for sale at various prices
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Supply
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An economic law stating that as the price of a good or service increases, the quantity also increases, and vice versa
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Law of supply
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The law of demand states that as quantity demand decreases...
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Price increases
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In the summer picnic season, a sharp rise in the price of burgers may lead to an increase in demand for A)buns B)relish C)chicken D)coleslaw
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C)chicken
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Quantity demanded moves along the demand curve in response to changes in
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Price
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What is most likely to happen to demand for clothes in a clothing store when blizzards keep customers at home
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The demand curve shits to the left
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According to the law of supply, what happens as price increases
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The quantity supplied increases
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Which of these would most likely increase the supply of soccer balls? A)a transportation strike B)a government excise tax C)a decrease in the price of raw materials D)an increase in the supply of tennis balls
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C)a decrease in the price of raw materials
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The degree to which the quantity demanded responds to changes in price is called
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Elasticity
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The 3 functions of money are...
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Medium of exchange Standard of value Store of value
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The 6 characteristics of money are...
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Acceptability Scarcity Portability Durability Divisibility Uniformity
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A card authorizing the user to buy goods and services with funds borrowed from the bank, store, or other business that issued the card
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Credit card
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The amount of money, borrowed, or the amount of money still owed on a loan, apart from the interest
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Principal
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A card authorizing the user to access his/her own funds on deposit in a bank account
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Debit card
