question

Central planning

answer

Which of the following is a distinguishing feature of a command system?

question

Let it be

answer

The French term "laissez-Faire" means

question

Who owns the factors of production and the methods used to coordinate economic activity.

answer

Economic systems differ according to which two main characteristics?

question

Government ownership of most property resources.

answer

Which of the following is nota typical characteristic of a market system?

question

independently acting buyers and sellers and freedom to enter or leave markets

answer

Broadly defined, competition involves

question

entails the exchange of goods for goods

answer

Barter

question

minimize the cost per unit of output

answer

The most efficient combination of resources in producing a given output is the combination that

question

What prices will be charged for goods and services

answer

Which of the following is not one of the five fundamental questions

question

Production targets were often increased when innovation occurred

answer

Enterprise managers and workers in the Soviet Union often resisted innovations in production methods because

question

Corporation

answer

In what type of business do the owners bear no personal financial responsibility for the companys debts and obligations

question

Product and resource

answer

The two basic markets shown by the simple circular flow model are

question

businesses are sellers of final products

answer

In the simple circular flow model

question

product, resource

answer

In terms of the circular flow diagram, businesses obtain revenue through the .... market and make expenditures in the .... market

question

sellers in the resource and product markets respectively

answer

Households and businesses are

question

resources and goods respectively

answer

Arrows 1 and 2 represent

question

incomes and consumer expenditures respectively

answer

Arrows 3 and 4

question

The resource market

answer

Arrows 1 and 3 are associated with

question

in both market systems and command systems

answer

Risk is a problem faced

question

South Koreas market economy has significantly outperformed North Koreas command economy.

answer

Since World War 2

question

is one of the few remaining command economies

answer

The North Koreas command economy

question

pleasure or satisfaction

answer

For economists the word "utility" means

question

the decision to engage in one activity means forgoing some other activity

answer

Opportunity costs exist because

question

Hypothesis

answer

Which of the following terms implies the least degree of confidence in an economic generalization

question

the scientific method

answer

The process by which economists test hypotheses against facts to develop theories, principles, and models is called

question

the entire economy

answer

Macroeconomics approaches the study of economics from the viewpoint of

question

Microeconomics focuses on specific decision making units of the economy. Macroeconomics examines the economy as a whole

answer

Which of the following is true?

question

the need to make choices because economic wants exceed economic means

answer

The economizing problem is

question

is unattainable, given the consumers income

answer

Any combination of goods lying outside of the budget line

question

land, labor, capital, and entrepreneurial ability

answer

The four factors of production are

question

innovate

answer

The main function of the entrepreneur is to

question

Money in a bank account

answer

Which of the following would not be classified as an economic resource by economists

question

Production technology is fixed

answer

Which of the following is assumed in constructing a typical production possibilities curve?

question

technology is fixed

answer

The construction of a production possibilities curve assumes

question

bowed out from the origin

answer

The law of increasing opportunity costs is reflected in a production possibilities curve that is

question

Upsloping because of increasing marginal opportunity costs

answer

The marginal cost curve is

question

can attain some combination of goods lying outside its production possibilities curve

answer

Through specialization and international trade, a nation

question

because event A precedes event B, A is necessarily the cause of B

answer

The "after this, therefore because of this" fallacy states that

question

The value of the dependent variable is determined by the value of the independent variable

answer

Which of the following statements is correct

question

Comparing the absolute vertical change to the absolute horizontal change between to points of the line

answer

The slope of a straight line can be determined by

question

zero

answer

The slope of a line parallel to the horizontal axis is

question

is an institution that brings together buyers and sellers

answer

A market

question

price and quantity demanded are inversely related

answer

The law of demand states that, other things equal

question

a schedule of various combinations of market prices and amounts/quantities demanded

answer

Economists use the term demand to refer to

question

the substitution effect

answer

When the price of a product rises, consumers with a given money income shirt their purchases to other products whose prices are now relatively lower. This statement describes

question

normal goods

answer

The demand for most products varies directly with changes in consumer incomes. Such products are known as

question

for which the consumption varies directly with incomes

answer

A normal good is one

question

the prices of other goods are assumed constant

answer

In constructing a demand curve for product X

question

not accurately defined by any of these statements

answer

An inferior good is

question

the price of the product for which the demand curve is relevant

answer

In moving along a demand curve, which of the following is not held constant

question

price and quantity supplied

answer

The supply curve shows the relationship between

question

capacity of a competitive market to equalize quantity demanded and quantity supplied

answer

The rationing function of prices refers to the

question

the use of the least cost method of production

answer

Productive efficiency refers to

question

producing the combination of goods most desired by society

answer

Allocative efficiency is concerned with

question

the mix of output that will maximize societys satisfaction

answer

Allocative efficiency involves determining

question

the production of the product mix most wanted by society

answer

Allocative efficiency refers to

question

price floor

answer

government set minimum pricing

question

Price ceiling

answer

Government set a maximum price

question

government is imposing a minimum legal price that is typically above the equilibrium price

answer

A price floor means that

question

government is imposing a legal price that is typically below the equilibrium price

answer

A price ceiling means that

question

reselling a ticket at a price above its original purchase price

answer

Ticket scalping refers to

question

private markets do not allocate resources in the most economically desirable way

answer

Market failure is said to occur whenever

question

the demand and supply curves don't reflect consumers full willingness to pay for a good or service

answer

Demand side market failures occur when

question

Supply curves must reflect all costs of production and demand curves must reflect consumers full willingness to pay

answer

Which two conditions must hold for a competitive market to produce efficient outcomes

question

is the differenece between the maximum prices consumers are willing to pay for a product and the lower equilibrium price

answer

Consumer surplus

question

Under the demand curve and below the actual price

answer

Graphically if the supply and demand curves are linear, consumer surplus is measured as the triangle

question

will, for most unit produced, equal the maximum that consumers are willing to pay for the good

answer

A producers minimum acceptable price for a particular unit of a good

question

nonrivalry and nonexcludability

answer

The two main characteristics of a public good are

question

is available to all and cannot be denied to anyone

answer

A public good

question

there is not effective way to keep people from using a good once it comes into being

answer

Nonexcludability describes a condition where

question

Public goods are only provided by government

answer

Which of the following statements is not true

question

Summing vertically that individual demand curves for the public good

answer

A demand curve for a public good is determined by

question

the optimal project size is the one for which MB=MC

answer

According to the marginal cost marginal benefit rule

question

Whenever they over or underallocate resources to a project

answer

Economists consider governments to be wastful

question

The benefits associated with a product exceed those accruing to people who consume it

answer

A positive externality or spillover benefit occurs when

question

the total cost of producing a good exceeds the costs borne by the producer

answer

A negative externality or spillover cost occurs when

question

Benefit of abatement equals its marginal cost of abatement

answer

The socially optimal amount of pollution abatement occurs where societys marginal

question

Diminishing marginal utility

answer

The marginal benefit to society of reducing pollution declines with increases in pollution abatement because of the law of

question

Diminishing returns

answer

The marginal cost of society of reducing pollution rises with increases in pollution abatement because of the law of

question

Private individuals can often negotiate their own resolution of ecternality problems without the need for government intervention

answer

According to the Coase theorem

question

Government fixes the maximum amount of a pollutant that firms can discharge and issues permits that firms can buy from and sell to each other

answer

In the cap and trade program

question

Government has the legal right to force people to do things private firms do not

answer

Which of the following is a key difference between the economic activities of government and those private firms

question

principals and agents

answer

In corporations owners are... and managers are ...

question

rent seeking behavior

answer

The pursuit through government pf a transfer of wealth at someone elses expense refers to

question

Favor programs entailing immediate and clear cut benefits and vaguely defined or deferred costs

answer

Public choice economists hold that politicians will

question

large economic gains to a small number of people and small economic losses to a large number of people

answer

A special interest issue is one whose passage yields

question

Social Security

answer

The US federal governments largest unfunded liability is

question

Monetary policy

answer

Government changes in interest rates to regulate the economy are part of

question

passed laws requiring balanced budgets

answer

To curb the problem of voters wanting immediate benefits and deferred costs, many state governments in the US have

question

Monetary Policy

answer

The US Federal Reserve, the bank of japan, the bank of England and the European Central Bank are all in charge of what for the countries they represent

question

The oriate sector has a clear test of performance profit and loss

answer

According to some economists the private sector is more efficient than the public sector mainly because

question

Earmarks

answer

Narrow specifically designated expenditures that are included in more comprehensive legislation are known as

question

Rules an enforcement in an industry are heavily influenced by the industry being regulated

answer

Regulatory capture is said to have occurred when which of the following is true

question

Pharmaceuticals

answer

Proponents of deregulation point to all of the following industries as examples of successful deregulation except for

question

Political corruption

answer

The unlawful misdirection of governmental resources for personal gain is known as

question

Difficulty in organizing and motivating large groups to achieve desired outcomes

answer

The collective action problem refers to

question

Public choice theory

answer

The field of economics that analyzes government decision making, politics, and elections is called

question

Rent seeking behavior

answer

Which one of the following topics would be the most interest to the public choice economist

question

government decision making, politics, and elections

answer

Public choice theory focuses on the economics of

question

Logrolling

answer

The trading of votes by elected officials to secure favorable outcomes is called

question

Paradox of voting

answer

The principle that under some circumstances majority voting fails to make consistent choices refleciting the community underlying preference is best demonstrated by the

question

Percentage decline in quantity demanded/absolute increase in price

answer

The basic formula for the price elasticity of demand coefficient is

question

The elasticity coefficient is less than one

answer

Which of the following is not characteristic of the demand for a commodity that is elastic

question

Can be represented by a line parallel to the vertical axis

answer

A perfectly inelastic demand schedule

question

negative, but the minus sign is ignored

answer

The price elasticity of demand is generally

question

demand is elastic at high prices

answer

for a linear demand curve

question

greater than one

answer

If demand for a product is elastic the value of the price elasticity coefficient is

question

graphs as a lone parallel to the vertical axis

answer

A perfectly inelastic demand curve

question

Perfectly elastic

answer

A demand curve that is parallel to the horizontal axis is

question

Relatively price inelastic

answer

The demand schedules for such products as eggs bread and electricity tend to be

question

The greater the amount of time over which buyers adjust to a price change

answer

The elasticity of demand for a product is likely to be greater

question

The greater will be the price elasticity of demand

answer

The more time consumers have to adjust to a change in price

question

responsive the quantity supplied of X is to changes in the price of X

answer

The price elasticity of supply measures how

question

Amount of time the producer has to adjust inputs in responses to a price change

answer

the main determinant of elasticity of supply is the

question

long run, short run, and immediate market period respectively

answer

The diagram concerns supply adjustment to an increase in demand in the immediate market period, the short run and the long run. supply curves apply to the

question

price inelastic in both the short and long run

answer

Studies show that the demand for gasoline is

question

quantity demanded of X/percentage change in price of Y

answer

The formula for cross elasticity of demand is percentage change in

question

The price of some other product

answer

Cross elasticity of demand measures how sensitive purchases of a specific product are to changes in

question

Goods for which the income elasticity coefficient is relatively high and positive

answer

Which type of goods os most adversely affected by recessions

question

Highly price inelastic

answer

The supply of higher education in the US is

question

is the satisfaction or pleasure one gets from consuming it

answer

The utility of a good or service

question

utility

answer

The ability of a good or service to satisfy wants is called

question

Beyond some point additional units of a product will yield less and less extra satisfaction to a consumer

answer

The law of diminishing utility states that

question

Change in total utility obtained by consuming one more unit of a good

answer

Marginal utility is the

question

satisfaction that a consumer derives from a good or service

answer

Utility refers to the

question

consumers behave rationally, attempting to maximize their satisfaction

answer

The theory of a consumer behavior assumes that

question

mup=mup=mup=mup

answer

A consumer is maximizing her utility with a particular money income when

question

total utility

answer

The theory of consumer behavior assumes that consumers attempt to maximize

question

Many consumers perceive that ipads are superior to laptops and desktop computers for the consumtion of digital media

answer

Which of the following has been a significant factor in the ability of Ipads to compete effectively against laptop and desktop computers

question

Apple introduced new features to entice previous buyers to purchase new models

answer

How did Apple overcome consumers diminishing marginal utility for ipads

question

noncash gifts are less efficient than cash gifts

answer

Most economist contend that

question

can be viewed as attempts to maximize utility given certain marginal costs and marginal benefits

answer

Theft and burglary

question

all possible combinations of two goods that can be purchased given money income and the prices of the goods

answer

The budget line shows

question

alternative combinations of two goods that a consumer can purchase with a given money income

answer

A budget line shows that

question

Combinations of two products yielding the same total utility to a consumer

answer

An indifference curve shows all

question

is downsloping and convex to the origin

answer

An indifference curve

question

total utility received by a consumer when equilibrium is achieved

answer

The marginal rate of substitution measures the

question

Budget lines are linear and downsloping, indifference curves are downsloping and convex to the origin

answer

Which of the following is correct

question

People have preferences that are unstable and vary by context

answer

Which of the following assumptions about human behavior is most likely to be accepted by behavioral economists

question

are generally viewed as complementary, together providing better understanding of economic behavior than each could on it own

answer

Neoclassical economics and behavioral economics

question

A majority of decisions are not made according to the neoclassical assumption of rational behavior

answer

Which of the following is an implication of that decisions making process

question

Unevolved capacity for solving modern problems and faulty heuristics

answer

WHat are the two categories of cognitive biases identified by behavioral economists

question

Hindsight bias

answer

When people convince themselves that they knew all along what was going to happen when in fact their predictions were incorrect they suffer from

question

People feel equivalent losses and gains in equal measure supporting the assumption that consumers behave rationally

answer

In developing prospect theory which of the following did behavioral economistsnot discover about peoples reaction to goods and bads

question

Whether a new situation is viewed as a gain or a loss depends on ones starting position

answer

According to the concept of framing effects

question

Mental accounting

answer

The process by which people isolate purchases and fail to consider all consumption options simultaneously is known as

question

Status quo bias

answer

According to prospect theory people tend to favor default options is known as

question

Depend heavily on the contextual information that defines whether that outcome is a gain or a loss

answer

According to behavioral economists peoples preference toward a particular outcome

question

Tendency to regularly misjudge in the present what you will do in the future

answer

Time inconsistency refers to the

question

precommitments

answer

Salary smoothing, automatic payroll deductions, and early withdrawl penalties are all examples of

question

Individual feelings about fairness and generosity vary widely across the population

answer

The results of running the dictator game experiemnts thousands of times have revealed to behavioral economist that

question

The ultimatum game tends to result in a more even split of the money

answer

Which of the following is a significant difference in the outcomes betweek the dictator game and the ultimatum game

question

affirm the metaphor of the invisible hand

answer

Results of the iltimatum game

question

helps align private interests with social interests

answer

The iltimatum game reveals that the threat of rejection

question

leads to higher prices as sellers try to cover possible losses

answer

The threat of rejection in market transactions

question

Firms have conducted a lot simple experiments to determine what might increase sales

answer

According to the piece "wannamakers lament" how have firms responded to the evidence that most advertising campaigns have little impact on sales

question

Loss Aversion

answer

The website Stickk. com appeals to what concept from behavioral economics to help people achieve goals

question

subtle changes in policies or practices that result in large behavioral changes

answer

Nudges refers to

Econ – Flashcard Test Questions

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards