question

T or F: Communism all the characteristics of a command system

answer

True

question

_____ is the discipline of economics concerned with individual units such as a person, household, firm or industry

answer

microeconomics

question

Which of the following describe a command system? 1. Firms and households acting in their own self-interest 2. A government-appointed central planning board 3. Firms producing what consumers demand 4. Government Ownership of most or all property resources

answer

2&4

question

The economic question of "______ to produce" is about decisions related to the mix of factor inputs (land, labor, capital...) used to produce goods and services

answer

how

question

Marginal analysis involves the comparison or evaluation of: 1. total benefits minus total costs of a decision 2. additional benefits minus additional costs of a decision 3. the incremental cost versus the incremental benefit of a decision 4. total costs versus total benefits of a decision

answer

3

question

_______ is the discipline that examines either the economy as a whole or the aggregate

answer

macroeconomics

question

T or F: The three main decisions that must be addressed by an economic system include what goods are to be produced, who will produce them, and where they will be produced.

answer

F

question

Which of the following define positive economics? 1. Statements based on facts empirical cause-and-effect relationships 2. Statements based on value judgements 3. Measurable or scientific statements about economic behavior 4. Focus on what the economic outcomes should be like

answer

1&3

question

Evaluate whether each of the following statements applies to microeconomics or macroeconomics: 1. The trade deficit between the U.S. and China grew between 2000 & 2009 2. A U.S. software firm laid off 15 workers last month and transferred the work to India 3. Recently, Chase Bank lowered its interest rate on business loans by 2 percentage points 4. The Consumer Price Index (CPI) rose by 3 percent in 2007 5. The real GDP for the United States grew by 2.2 percent in 2007 6. An unexpected freeze in central Florida reduced the citrus crop and caused the price of oranges to rise

answer

1. Macro 2. Micro 3. Micro 4. Macro 5. Macro 6. Micro

question

T or F: Government owns most of the property resources such as land and capital in a market system

answer

F

question

Economics is a _______ science concerned with the allocation of _______ resources to meet the unlimited wants of the members of a given society

answer

Social & Scarce

question

Economics assumes that human behavior reflects "_____ self-interest"

answer

Rational

question

The economic question of "_______ to produce" is about decisions related to the mix (quantity and type) of goods and services to make available in a given economy

answer

what

question

Which of the following best describe the concept of laissez-faire capitalism? 1. The role of government is limited to protecting private property 2. The role of government is limited to ensuring the appropriate operation of the market system 3. Capitalism in which the role of government is unlimited 4. Capitalism in which the role of government is to correct market failures

answer

1&2

question

_______ is the notion that, in general, the quantity desired of economic goods exceeds the quantity available

answer

scarcity

question

The term "laissez-faire" refers to: 1. Keeping government from interfering in the economy 2. The government acting as a dominant force in the economy 3. Mixed market or mixed capitalism 4. Allowing the government to interfere in the economy

answer

1

question

Due to scarce resources, every individual, whether rich or poor, is faced with an _____ cost when choosing to produce or consume more of one good than another

answer

opportunity

question

________ is a particular set of institutional arrangements and a coordinating mechanism that responds to the allocation of scarce resources to meet unlimited wants and needs.

answer

Economic system

question

Statement about economic behavior or the economy that enables prediction of the probable effects of certain actions is known as an:

answer

Economic theory & economic principle

question

The command economies of the former Soviet Union and of Eastern Europe failed due to: 1. Coordination problems 2. Incentive problems 3. The market economic system 4. The invisible hand

answer

1 & 2

question

In the type of capitalism practiced in the United States and most other countries, the government plays ______ role.

answer

Substantial

question

Natural Resources, labor, human capital, physical capital and entrepreneurship are all scarce economic resources privately or collectively owned by members of society. Where these scarce resources are used to produce goods or services, there is: 1. No cost borne by society in utilizing these resources to produce goods or services 2. A cost borne by society in utilizing these resources to produce goods or services 3. No opportunity cost 4. No "free lunch"

answer

2 & 4

question

The economic perspective focuses on _____, therefore the decision maker must compare incremental benefits and costs

answer

Marginal analysis

question

Private property rights, coupled with the freedom to negotiate binding legal _________ enables individuals and businesses to obtain, use, and dispose of property resources as they see fit.

answer

agreements

question

Which of the following are all possible because of private property rights in a market system? 1. Maintenance of property 2. Exchange 3. Innovation 4. Investment 5. Central planning board 6. Economic growth

answer

1,2,3,4, & 6

question

________ economic analysis concerns what is, whereas ________ economic analysis represent subjective statements about what ought to be

answer

Positive & Normative

question

Which of the following best clarifies the "other-things-equal" assumption? 1. Those variables under immediate consideration for a particular analysis are given equal weight 2. Those variables under immediate consideration for a particular analysis are all held constant. 3. All variables are held constant or do not change for a particular analysis 4. All variables except those under immediate consideration are held constant for a particular analysis 5. All variables in a particular analysis are given equal weight or consideration when used in a particular analysis

answer

4

question

In economics, an incremental or gradual change is also known as a ______ change

answer

marginal

question

T or F: Freedom of choice allows workers to enter any line of work for which they are qualified. It also ensures that consumers are free to buy the goods and services that best satisfy their wants.

answer

T

question

Which of the following describe the role of government in the United States' form of capitalism? 1. Provides the rules for economic activity 2. A controlled or "hands-on" approach to the market 3. Promotes economic stability and growth 4. Provides certain goods and services that would otherwise be underproduced or not produced at all 5. Modifies the distribution of income

answer

1,3,4 & 5

question

Choose those characteristics that best describe a command system: 1. Firms produce according to the demands of consumers 2. A central planning board makes all the economic decisions concerning resources 3. The division of output between capital and consumer goods is decided by market forces 4. Government owns resources

answer

2 & 4

question

The _______ problem describes a situation faced in command economies which producers have no reason to adjust production in response to shortages or surpluses in the economy

answer

Incentive

question

In macroeconomics, an ________ is a collection of specific economic units treated as if they were one unit

answer

aggregate

question

A central planning board sets the division of output between capital and consumer goods in a ______ system?

answer

Command

question

Consumers derive personal satisfaction from goods and services by: 1. Acting in a their own self interest 2. Acting in a selfish manner 3. Allocating their time, energy, money and other resources so as to maximize their satisfaction from consuming these goods 4. Making decisions that are unaffected by greed.

answer

1 & 3

question

Which of the following describes the concept of rational self-interest? 1. Individuals weigh the costs and benefits of others' decisions and pursue the alternative 2. Individuals allocate their resources to maximize their satisfaction 3. Individuals weigh the costs and benefits of their decisions 4. Individuals look for and pursue opportunities to increase their utility or level of personal satisfaction 5. Individuals look for and pursue opportunities to increase society's utility or welfare

answer

2, 3, & 4

question

An ________ outcome is one where the additional value or benefits of an action slightly exceed or exactly equal the additional costs of that same action

answer

efficient

question

In addition to lacking incentives, the command economies of the former Soviet Union, Eastern Europe, and China prior to market reforms also lacked___________

answer

entrepreneurship

question

The title to an automobile or the deed to a cattle ranch assures a buyer that the seller is the legitimate owner of that property. This is an example of property rights ______

answer

Facilitating exchange

question

_________ economics considers the subjective desirability of certain aspects of the economy and underlies expressions of support for particular economic policies

answer

Normative

question

When comparing the additional or incremental costs versus additional or incremental benefits of a decision, one is engaging in:

answer

Marginal analysis

question

The command economies of the Soviet Union, eastern Europe and China prior to its market reforms failed due to which of the following problems: 1. Economic problem 2. Profit problem 3. Coordination problem 4. Incentive problem

answer

3 & 4

question

At an output level that is greater than what is optimal: 1. The marginal cost of producing the good is less than the marginal benefit 2. There is equality between the marginal cost and the marginal benefit of producing the good 3. There is an under-allocation of resources towards producing the good. 4. The marginal cost of producing the good is greater than the marginal benefit

answer

4

question

Private property helps facilitate exchange in which type of economic system?

answer

Free Market

question

Which of the following statements or questions represent positive economics? 1. Should the unemployment rate in the United States be higher than in Mexico? 2. The unemployment rate in Mexico is higher than in the United States. 3. As the price of airfares falls, airlines experience a spike in business. 4. The government ought to increase the minimum wage so that incomes rise. 5. If the government increases the minimum wage, the unemployment rate will rise.

answer

2,3, & 5

question

Which of the following define ceteris paribus? 1. Other-things-equal assumption 2. The idea that, in a particular analysis, "additional" factors, other than those under consideration, play a significant role in said analysis 3. The idea that factors other than those being considered in a particular analysis do not change. 4. In a particular analysis, "additional" factors, other than those under consideration, are given equal consideration when factored into an analysis

answer

1 & 3

question

T or F: Freedom of enterprise enables owners to produce goods and services of their choice and sell them to only those markets directed by the government.

answer

F

question

T or F: Positive economics encourages value judgements

answer

F

question

The economic decisions of different individuals are considered to be rational when these individuals:

answer

Compare benefits and costs

question

Which of the following are issues most explored in microeconomics? 1. Unemployment & Inflation rates 2. Measuring total revenues of a firm or household 3. The expenditures of a government entity 4. Measuring the price of specific goods 5. The level of public debt 6. A firm's decision to hire more workers

answer

2,3,4, & 6

question

T or F: A feature of the market system is the ability to reap monetary rewards from the innovation and creation of new products and processes

answer

T

question

The economic assumption that human behavior reflects rational self-interest is based on the notion that individuals: 1. Seek to minimize their utility for goods and services 2. Weigh the costs and benefits of their decisions 3. Allocate their resources to maximize society's utility 4. Are only looking out for themselves at the expense of others.

answer

2

question

Which of the following are economic measures are considered in macroeconomic analysis? 1. The unemployment rate 2. A firm's output 3. International trade 4. The level of prices in the economy 5. National Income 6. A firm's income or total revenues

answer

1,3,4 & 5

question

Which of the following statements or questions represent normative economics? 1. When the prices of gas rises, the quantity consumed falls 2. The government should increase the minimum wage. 3. Cable companies should merge because they result in more competitive pricing 4. The government ought to bail out distressed banks 5. What will be the result of a Continental Airlines and United Airlines merger? 6. What should the federal minimum wage be?

answer

2,3,4 & 6

question

Economic principles and models are highly useful in: 1. Explain and predicting 2. Observing economic behavior 3. Determining cause and effect 4. Understanding how the economy operates 5. Supporting normative statements or questions 6. Analyzing economic behavior

answer

2,3,4 & 6

question

In general, every society needs to develop _________ to respond to the address the conflict between scarcity and unlimited wants and needs

answer

An economic system

question

A central panning board as a part of a command system government: 1. Makes decisions on the composition and distribution of output 2. Organizes production 3. Makes all decisions concerning the use of resources 4. Encourages competition among producing firms

answer

1,2 & 3

question

T or F: The command economies of the former Soviet Union, eastern Europe, and China prior to market reforms rewarded innovation, enterprise and entrepreneurship

answer

F

question

Property rights encourage: 1. Maintenance of property 2. Socialism 3. Innovation 4. Economic growth 5. Investment 6. Exchange

answer

1,3,4,5 &6

question

Economists develop theories of ________ of individuals (consumers,workers) and institutions (businesses,governments) engaged in the production, exchange, and consumption of goods and services

answer

behavior

question

Which of the following are characteristics of the market system? 1. Markets and prices 2. Private property 3. Allocation by command 4. Self-interest 5. Freedom of enterprise 6. Freedom of choice 7. Competition

answer

1,2,4,5,6 & 7

Ch.1 Macroeconomics – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards