question

What to produce with unlimited resources

answer

Which of the following is not one of the three core economic issues that must be resolved?

question

Society's desires exceed the want-satisfying capability of the resources available to satisfy those desires

answer

In economics, scarcity means that:

question

Opportunity costs are experienced whenever choices are made.

answer

Given that resources are scarce:

question

Final goods that are used to produce other goods and services

answer

Capital, as economists use the term, refers to:

question

How scarce resources are allocated to best meet society's goals

answer

Economics can be defined as the study of:

question

Maximum combinations of goods and services an economy can produce given its available resources and technology.

answer

A production-possibilities curve indicates the:

question

The limitations that exist because of scarce resources

answer

The production-possibilities curve illustrates:

question

Bowed outward.

answer

If an economy experiences increasing opportunity costs with respect to two goods, then the production-possibilities curve between the two goods will be:

question

Getting the most goods and services from the available resources.

answer

When an economy is producing efficiently it is:

question

Potential output.

answer

The points on a production-possibilities curve show

question

It can produce more of one good without giving up some of another good

answer

If an economy is producing inside the production-possibilities curve, then:

question

A shift outward of the production-possibilities curve.

answer

A technological advance would best be represented by:

question

Shift outward of the production-possibilities curve

answer

Economic growth would best be represented by a:

question

Are willing to pay the highest price

answer

In a market economy, the people who receive the goods and services that are produced are those who:

question

The use of market prices and sales to signal desired output.

answer

The market mechanism may best be defined as:

question

Works because prices serve as a means of communication between consumers and producers

answer

The market mechanism:

question

The overall economy.

answer

Macroeconomics focuses on the performance of:

question

Predict economic behavior, develop economic policies, and explain economic behavior.

answer

Economic models are used by economists to:

question

GDP of the United States.

answer

The measure of new goods and services produced in the United States is the:

question

Per capita GDP.

answer

Those who are interested in assessing the relative standard of living of different countries over a given time period are most likely to look at:

question

Is an increase in output or real GDP.

answer

Economic growth:

question

Net exports.

answer

The four major uses of total output are consumption, investment, government purchases, and:

question

Consumer goods and services.

answer

Over two-thirds of U.S. output consists of:

question

U.S. government purchases

answer

Which of the following is part of the U.S. GDP?

question

country must devote some of its scarce resources to investment

answer

In order to attain higher living standards in the long run:

question

A payment to an individual for which no current goods or services are exchanged.

answer

The term income transfer refers to:

question

The world's biggest exporter and also the world's biggest importer

answer

The U.S. is:

question

Lower opportunity cost than your trading partner.

answer

Comparative advantage refers to the ability to produce a good at a:

question

Decrease.

answer

IF all the countries in the world decide to prohibit trade, then world output will, ceteris paribus

question

Knowledge and skills workers possess.

answer

Human capital is defined as the:

question

Shift the curve outward

answer

How will an increase in the level of human capital, ceteris paribus, affect an economy's production-possibilities curve?

question

An externality.

answer

The cost or benefit of a market activity borne by a third party is:

question

Prices tend to be higher.

answer

When monopolies exist:

question

Market participation allows individuals to specialize and, ultimately, consume more

answer

People benefit by participating in the market because:

question

Product markets; factor markets

answer

Business firms supply goods and services to ____ and purchase factors of production in ____.

question

Factors of production; final goods and services

answer

Individual consumers supply ____ and purchase ____.

question

The buyer is both willing and able to purchase the good at alternative prices.

answer

A buyer is said to have a demand for a good only when:

question

Decreases

answer

Ceteris paribus, if the opportunity cost of purchasing a good rises, then the maximum price a particular consumer is willing to pay for that good:

question

Has a negative slope

answer

According to the law of demand, a demand curve:

question

A higher price of the good.

answer

A lower quantity demanded of a good reflects, ceteris paribus:

question

Price

answer

Which of the following is not held constant along a given demand curve for a good?

question

An increase in consumers' income

answer

Ceteris paribus, which of the following would generally cause an increase in the demand for automobiles?

question

An increase in the demand for the other.

answer

Peanut butter and jelly are complements. A decrease in the price of one will result in:

question

Holding everything constant except for the variables you are interested in examining

answer

Ceteris paribus means:

question

Means that price has changed and there is movement along the demand curve.

answer

A change in demand means there has been a shift in the demand curve, and a change in quantity demanded:

question

Add the quantities demanded for each individual demand schedule horizontally.

answer

To calculate market demand we:

question

The prices of the factors of production

answer

Which of the following is a determinant of supply?

question

Results in a change in quantity supplied

answer

A change in the price of a good:

question

An increase in the price of perfume

answer

Ceteris paribus, which of the following is most likely to cause an increase in the quantity supplied of perfume?

question

Supply because of a change in a non-price determinant

answer

A shift in supply is defined as a change in:

question

A decrease in the supply of corn syrup

answer

Ceteris paribus, if the subsidies given to corn syrup producer decrease, then we can expect:

question

The market supply curve intersects the market demand curve.

answer

The equilibrium price in a market is found where:

question

No shortages or surpluses.

answer

At the equilibrium price there are:

question

That price is greater than the equilibrium price.

answer

If there is a surplus at a given price, then:

question

Producers reduce the level of output and reduce price.

answer

When a surplus exists for a product:

question

Price of the tickets must have been above the equilibrium price

answer

A ballet performance had many empty seats. This implies that the:

question

Higher equilibrium price

answer

A rightward shift in a demand curve and a leftward shift in a supply curve both result in a:

question

Decrease and quantity to decrease.

answer

A leftward shift of the market demand curve for HDTVs, ceteris paribus, causes equilibrium price to:

question

Decrease and the equilibrium quantity of jelly to decrease.

answer

Assume peanut butter and jelly are complements. Ceteris paribus, an increase in the price of peanut butter will cause the equilibrium price for jelly to:

question

A shortage exists at the old equilibrium price.

answer

When the demand for coffee increases, ceteris paribus, the equilibrium price will also increase because:

question

Decrease and the equilibrium quantity of ice cream to increase.

answer

Assume milk is used to produce ice cream. Ceteris paribus, a decrease in the price of milk will cause the equilibrium price of ice cream to:

question

Changes in market prices.

answer

Resources are directed from one industry to another by:

question

Leads the economy to the wrong mix of output.

answer

Market failure implies that the market mechanism:

question

Externalities.

answer

Government intervention may be appropriate to correct market outcomes because of:

question

When the market mechanism fails to achieve the optimal mix of output

answer

From an economic standpoint, government intervention is justified:

question

On its own may not always provide the optimal mix of goods and services

answer

The market:

question

Is consumed by one person and excludes consumption by others.

answer

A private good:

question

Flood control

answer

Which of the following is an example of a public good?

question

Cannot be denied to consumers who have not paid.

answer

In economics, a public good:

question

Public goods.

answer

The federal government's role as the provider of national defense is justified by considerations of:

question

Public goods

answer

Governments usually build highways because it is difficult to exclude individuals who don't pay for the highways from using them. What type of market failure is involved?

question

Reflects the inability to exclude an individual from the benefits of someone else's purchase.

answer

The free-rider problem:

question

Joint consumption allows those who do not pay for the good to still benefit from the good.

answer

The market tends to under-produce public goods because:

question

Control of resources.

answer

Market power may result from:

question

The use of market prices and sales to signal desired output.

answer

The term market mechanism refers to:

question

May be beneficial to society if they are natural monopolies and are regulated.

answer

Monopolies:

question

Produce less and charge a higher price than what would be socially optimal

answer

The development of market power by a firm is considered to be a market failure because firms with market power will:

question

Antitrust policy.

answer

Government intervention to alter market structure or prevent abuse of market power is the basic purpose of:

question

There are external benefits associated with education

answer

If the economy relies entirely on the market mechanism to answer the WHAT, HOW, and FOR WHOM questions, it tends to:

question

Producers experience lower costs than society.

answer

The market will overproduce goods that have external costs because:

question

Both producers and consumers have an incentive to produce and consume too much

answer

When external costs result from the production of a good:

question

B. The inoculation of college students against the flu

answer

Which of the following produces external benefits?

question

B. Good with an external cost

answer

If Good X has social demand that is less than market demand, then Good X must be a:

question

B. Are the costs or benefits of market activities that "spill over" onto third parties

answer

Externalities:

question

Multiplying output by price and adding the resulting dollar values.

answer

DVD players can be added to bicycles to compute the GDP by:

question

$430,000

answer

Suppose iPhones cost consumers $200 and USB cables cost consumers $25. What contribution does the production of 2000 iPhones and 1200 USB cables make to GDP?

question

GDP measures output within the nation's borders only.

answer

Which of the following statements is correct concerning GDP and GNP?

question

Is equal to a nation's GDP divided by its population.

answer

GDP per capita:

question

Make international comparisons of the standard of living.

answer

The GDP per capita is the most practical way to:

question

The value of lawn mowing provided by a teenager for his own family

answer

Which of the following is excluded from calculations of GDP?

question

Productive but excluded from GDP because it is a nonmarket activity.

answer

When an individual makes repairs to her own home instead of hiring a company to make the repairs, the activity is:

question

Paper purchased by a textbook company

answer

Which of the following is not a final good or service?

question

Only the value of final goods.

answer

To avoid counting the same output more than once the calculation of GDP includes:

question

Nominal GDP.

answer

The value of final output produced in a given period, measured in current prices is:

question

Value of final output produced in a given period measured in constant prices.

answer

Real GDP is the:

question

Analyze the growth rate of the economy over time.

answer

Real GDP is used most effectively to:

question

Exceed percentage increases in real GDP.

answer

In periods of rising prices, percentage increases in nominal GDP will:

question

$7,500 measured in period 1 prices.

answer

Assume nominal GDP is $10,000 billion in period 1 and $15,000 billion in period 2. If prices in period 2 are twice as high as in period 1, real GDP in period 2 is:

question

Depreciation.

answer

The wearing out of plant and equipment is known as:

question

Gross investment is greater than depreciation.

answer

An economy's production possibilities are most likely to expand if:

question

Two-thirds of total output.

answer

When calculating GDP, consumption makes up approximately:

question

A retirement portfolio of stocks and bonds.

answer

The economic definition of investment includes all of the following except:

question

The value of exports minus the value of imports.

answer

Net exports are:

question

C + I + G + (X - M).

answer

The components of GDP are:

question

Are old enough to work but choose not to work.

answer

People are not part of the labor force when they:

question

In the labor force divided by the total population.

answer

The labor-force participation rate is the number:

question

Percentage of the population that is willing and able to work is declining.

answer

When the labor-force participation rate is declining, the:

question

Not part of the labor force and is not counted in the unemployment rate.

answer

Jack graduated from college last month, but he has not yet started looking for a job. Jack is:

question

The inability of labor force participants to find jobs.

answer

Unemployment is defined as:

question

U.S. Census Bureau in monthly surveys that examine whether people are working or are willing to work.

answer

The most widely used measure of the unemployment rate is found by the:

question

Black teenagers

answer

Which of the following groups typically has the highest unemployment rate?

question

College graduates

answer

Which of the following groups generally has the lowest unemployment rate?

question

Duration of unemployment rises.

answer

When an economy enters a recession the:

question

People seeking full-time paid employment that work only part-time or are employed at jobs below their capability.

answer

Underemployment is defined as:

question

People who report that they are actively seeking a job even when they have little or no intention of finding one.

answer

The phantom unemployed are:

question

Seasonal unemployment.

answer

When migrant workers seek employment after the crops have been picked, the unemployment rate goes up. This situation is an example of:

question

Frictionally unemployed.

answer

Nancy returns to school to study medicine. After graduating, she spends six months looking for a job. During this period she is considered:

question

Structurally unemployed.

answer

Tom worked at NASA for thirteen years. In the fourteenth year, his job was automated, resulting in him losing his job. He looked for a new job for eighteen months before finding a job that paid less. During his eighteen month job search, Tom was considered to be:

question

Cyclically unemployed.

answer

A U.S. worker who loses his or her job in an import industry because aggregate demand decreases would be classified as, ceteris paribus:

question

Cyclical

answer

Which of the following unemployment categories is most clearly related to the rate of growth in real GDP?

question

Average prices are rising, but it is not certain what is happening to relative prices.

answer

Inflation means:

question

Signaling changes in the desired mix of output

answer

Which of the following functions are performed by changes in relative prices but not by changes in average prices?

question

It is the same as your real income

answer

Which of the following is not true about your nominal income?

question

Nominal income.

answer

The amount of money income received in a given time period, measured in current dollars is:

question

Nominal income adjusted for inflation.

answer

Real income is:

question

The purchasing power of the money you receive.

answer

Your real income is:

question

Decreases

answer

Inflation ________________ the purchasing power of money.

question

Causes businesses to focus more on the future.

answer

Inflation affects production decisions because it:

question

Consumption, saving, and investment behavior.

answer

The uncertainty that results from inflation causes changes in:

question

A measure of changes in the average price of consumer goods and services.

answer

The Consumer Price Index is:

question

Find out what people buy with their incomes and how the prices of what they buy change.

answer

To construct the Consumer Price Index, the Bureau of Labor Statistics must:

question

13.6 percent.

answer

If the CPI increases from 110 to 125 for one year, the rate of inflation for that year is:

question

11.5 percent

answer

At the beginning of 2000 the CPI was 159.3. At the end of 2000 it was 177.6. What was the approximate rate of inflation in 2000?

question

The base period.

answer

or the CPI, the market basket is expressed in terms of what the goods cost in:

question

s the broadest price index, covering all output.

answer

The GDP deflator:

question

Value of final output produced, adjusted for changing prices.

answer

Real GDP is the:

question

a good or service society deems everyone is entitled to some minimal quality, examples are food stamps, housing vouchers, medic aid

answer

Merit goods

question

tax and transfer payments = payments to individuals for which no current goals or services are exchanged, like social security, welfare and unemployment benefits

answer

Inequity

question

a postal service, welfare, social reward

answer

Equity

question

goods like alcohol and gas

answer

Excise taxes

Econ 101 Midterm – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards