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Econ Exam 1 Flashcard

Malcolm Bright

19 October 2020

question

Economics is best defined as the

answer

Study of how people make choices to satisfy their wants.

question

In economic analysis, people's resources are

answer

Limited and their wants are unlimited.

question

In economics, items that are used to produce goods and services are known as

answer

Resources

question

Economics is a part of the

answer

Social sciences.

question

Microeconomics is defined as that part of economic analysis that

answer

Studies individual decision making by households and firms.

question

Macroeconomics is the study of

answer

Aggregate economic variable.

question

One topic of study for a microeconomist would be the

answer

Effects of a gasoline price increase on consumer behavior.

question

Which of the following would likely be studied in a macroeconomics course?

answer

All of the above (the unemployment rate, total output for an economy, the inflation rate)

question

Another word for "aggregate" is

answer

Total.

question

An economic system is

answer

A mechanism to allocate scarce resources.

question

Which of the following is NOT one of the basic questions that an economic system attempts to answer?

answer

How to eliminate choices?

question

What is the type of economic system that relies on one central authority to make economic decisions?

answer

Command system.

question

A mixed economic system is best described an economy with a mix of

answer

Free markets and government control.

question

In a market system, _____provide signals about whether resources are relatively scarce or abundant.

answer

Prices

question

Economists assume that people are motivated by

answer

Rational self-interest

question

The potential rewards that are available if a particular activity is undertaken are known as

answer

Incentives.

question

If the government offers to reduce your property taxes by 10% if you install solar heating for your home, this would be an example of

answer

Incentives

question

A simplified representation of the real world that is used to explain economic phenomena is a(n)

answer

Model

question

Holding all variables constant but one assessing the impact of the one variable that has changed is an example of

answer

The ceteris paribus assumption

question

Why is economics called an empirical science?

answer

because economics relies on real-world data to determine the usefulness of a model.

question

In the production of goods and services, trade-offs exist because

answer

society has only a limited amount of productive resources.

question

The difference between scarcity and a shortage is that

answer

scarcity always is a part of human life while shortage s usually are temporary.

question

In 2006, hurricanes damaged many parts of Texas, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused

answer

shortages, because supplies were cut off and goods were destroyed.

question

Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called

answer

entrepreneurs.

question

In economic terminology, when a resource is used to produce is used to produce output it is referred to as

answer

a factor of production.

question

Physical capital is distinguished from a human capital because

answer

physical capital rears to equipment and machinery, whereas human capital refers to trained people.

question

Human capital is

answer

the accumulation of skills, training and education of workers.

question

Economic goods are defined as

answer

anything from which an individual derives satisfaction.

question

A tractor used to prepare land for planting is called

answer

physical capital.

question

Naturally occurring diamonds are an example of

answer

land.

question

Opportunity cost is defined as

answer

the value of the next-best alternative that must be sacrificed to attain a want.

question

Opportunity costs arise from

answer

choices.

question

The production possibilities curve represents

answer

the maximum combination of goods and services that can be produced with fixed resources and technology, given efficient use of the resources.

question

A country operates inside its production possibilities curve, this may be caused by

answer

unemployment resources.

question

How is economic growth shown by the production possibilities curve?

answer

by shifting the curve to the right.

question

Generally, if a nation produces more consumer goods than capital goods

answer

less of all goods may be produced in the future.

question

Comparative advantage is

answer

when a country can produce a good at a lower opportunity cost compared to other countries.

question

Which is the best example of specialization?

answer

a high school math teacher who teaches only calculus.

question

Absolute advantage is

answer

producing a good using the fewest inputs.

question

A person has a comparative advantage in an activity whenever she

answer

can perform the activity at a lower opportunity cost than another person can.

question

In economics, "demand" refers to

answer

the quantities of a good that people will buy at various prices.

question

The law of demand states that

answer

quantity demanded will vary inversely with the price of the good.

question

A fundamental principle in demand analysis is that a change in price leads to

answer

a movement along the demand curve.

question

The money price of a good is that price

answer

expressed in today's dollars.

question

The relative price of a good is that price

answer

expressed in terms of the price of another good.

question

Markets are

answer

a mechanism through which prices of goods and services are determined by the forces of supply and demand.

question

Ceteris paribus, as the price of a good or service increases,

answer

people will buy less of it.

question

The demand curve shows the relationship between quantity demanded and

answer

price.

question

A demand curve

answer

slopes down because of the inverse relationship between price and quantity demanded.

question

Adding the quantities demanded by all consumers at every price will yield

answer

the market demand curve.

question

If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

answer

substitutes.

question

Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal

answer

reduce demand for chicken, pork, and beef.

question

The quantity supplied of a particular good is the amount of the good that

answer

firms are willing to sell at each price during a particular time period.

question

According to the law of supply,

answer

producers provide less of a good when the price decreases

question

A given supply curve illustrates

answer

the relationship between price and quantity supplied.

question

For typical goods, supply curves are

answer

upward sloping

question

Total market supply can be derived by

answer

horizontally summing individual supply curves at each and every price level.

question

Other things being equal, an increase in wages paid to workers in the steel industry will cause

answer

the supply to decrease.

question

An improvement in technology in the production of computers would

answer

increase the supply of computers.

question

There will be an increase in supply when

answer

there is an improvement in technology.

question

A country's labor force is equal to

answer

the total number of employed and unemployed people.

question

The term "unemployment" is best described as the total number of

answer

adults who are looking for work but have not found a job.

question

Individuals who have stopped looking for work because they are convinced that they will not find a job are considered

answer

discouraged workers.

question

The rate of unemployment is calculated as the number of

answer

unemployment divided by the number of people in the civilian labor force.

question

To be officially counted as unemployed, a person must be

answer

at least 16 years old.

question

Costs of unemployment will always exist since

answer

the output lost due to the fact that the economy is not running at full employment.

question

Frictional unemployment include

answer

some workers will always want to make a job transition.

question

Bob's assembly line job has been replaced by robots, and Bob lacks abilities and skills required to attain other jobs. He is considered

answer

structurally unemployed.

question

A lifeguard who is out of work in the winter is

answer

seasonally unemployed.

question

Cyclical unemployment occurs when

answer

a downturn in economic activity decreases employment.

question

Inflation is best described as a situation in which

answer

the average of all prices are on a sustained rise over a period of time.

question

A sustained decrease in the average of all prices of goods and services in the economy is known as

answer

deflation.

question

The rate of inflation and the purchasing power of money are

answer

inversely related.

question

The consumer price index shows

answer

the cost of today's goods expressed in terms of the cost of goods in a base year.

question

The value of money for buying goods and services is known as

answer

purchasing power.

question

The year that is chosen as the point of reference for comparison of prices in other years is known as the

answer

base year.

question

The GDP deflator is a

answer

price index measuring the changes in prices of all new goods and services produced in the economy.

question

Fully anticipated inflation occurs when

answer

the actual inflation rate equals the anticipated inflation rate.

question

Who stands to gain as a result of unanticipated inflation?

answer

Debtors.

question

A COLA is

answer

an automatic increase in wages that takes into account increases in the price level.

1 of

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question

Economics is best defined as the

answer

Study of how people make choices to satisfy their wants.

question

In economic analysis, people's resources are

answer

Limited and their wants are unlimited.

question

In economics, items that are used to produce goods and services are known as

answer

Resources

question

Economics is a part of the

answer

Social sciences.

question

Microeconomics is defined as that part of economic analysis that

answer

Studies individual decision making by households and firms.

question

Macroeconomics is the study of

answer

Aggregate economic variable.

question

One topic of study for a microeconomist would be the

answer

Effects of a gasoline price increase on consumer behavior.

question

Which of the following would likely be studied in a macroeconomics course?

answer

All of the above (the unemployment rate, total output for an economy, the inflation rate)

question

Another word for "aggregate" is

answer

Total.

question

An economic system is

answer

A mechanism to allocate scarce resources.

question

Which of the following is NOT one of the basic questions that an economic system attempts to answer?

answer

How to eliminate choices?

question

What is the type of economic system that relies on one central authority to make economic decisions?

answer

Command system.

question

A mixed economic system is best described an economy with a mix of

answer

Free markets and government control.

question

In a market system, _____provide signals about whether resources are relatively scarce or abundant.

answer

Prices

question

Economists assume that people are motivated by

answer

Rational self-interest

question

The potential rewards that are available if a particular activity is undertaken are known as

answer

Incentives.

question

If the government offers to reduce your property taxes by 10% if you install solar heating for your home, this would be an example of

answer

Incentives

question

A simplified representation of the real world that is used to explain economic phenomena is a(n)

answer

Model

question

Holding all variables constant but one assessing the impact of the one variable that has changed is an example of

answer

The ceteris paribus assumption

question

Why is economics called an empirical science?

answer

because economics relies on real-world data to determine the usefulness of a model.

question

In the production of goods and services, trade-offs exist because

answer

society has only a limited amount of productive resources.

question

The difference between scarcity and a shortage is that

answer

scarcity always is a part of human life while shortage s usually are temporary.

question

In 2006, hurricanes damaged many parts of Texas, destroying homes, businesses, schools, and infrastructure. In strictly economic terminology, these hurricanes are said to have caused

answer

shortages, because supplies were cut off and goods were destroyed.

question

Human resources that perform the functions of organizing, managing, and assembling the other factors of production are called

answer

entrepreneurs.

question

In economic terminology, when a resource is used to produce is used to produce output it is referred to as

answer

a factor of production.

question

Physical capital is distinguished from a human capital because

answer

physical capital rears to equipment and machinery, whereas human capital refers to trained people.

question

Human capital is

answer

the accumulation of skills, training and education of workers.

question

Economic goods are defined as

answer

anything from which an individual derives satisfaction.

question

A tractor used to prepare land for planting is called

answer

physical capital.

question

Naturally occurring diamonds are an example of

answer

land.

question

Opportunity cost is defined as

answer

the value of the next-best alternative that must be sacrificed to attain a want.

question

Opportunity costs arise from

answer

choices.

question

The production possibilities curve represents

answer

the maximum combination of goods and services that can be produced with fixed resources and technology, given efficient use of the resources.

question

A country operates inside its production possibilities curve, this may be caused by

answer

unemployment resources.

question

How is economic growth shown by the production possibilities curve?

answer

by shifting the curve to the right.

question

Generally, if a nation produces more consumer goods than capital goods

answer

less of all goods may be produced in the future.

question

Comparative advantage is

answer

when a country can produce a good at a lower opportunity cost compared to other countries.

question

Which is the best example of specialization?

answer

a high school math teacher who teaches only calculus.

question

Absolute advantage is

answer

producing a good using the fewest inputs.

question

A person has a comparative advantage in an activity whenever she

answer

can perform the activity at a lower opportunity cost than another person can.

question

In economics, "demand" refers to

answer

the quantities of a good that people will buy at various prices.

question

The law of demand states that

answer

quantity demanded will vary inversely with the price of the good.

question

A fundamental principle in demand analysis is that a change in price leads to

answer

a movement along the demand curve.

question

The money price of a good is that price

answer

expressed in today's dollars.

question

The relative price of a good is that price

answer

expressed in terms of the price of another good.

question

Markets are

answer

a mechanism through which prices of goods and services are determined by the forces of supply and demand.

question

Ceteris paribus, as the price of a good or service increases,

answer

people will buy less of it.

question

The demand curve shows the relationship between quantity demanded and

answer

price.

question

A demand curve

answer

slopes down because of the inverse relationship between price and quantity demanded.

question

Adding the quantities demanded by all consumers at every price will yield

answer

the market demand curve.

question

If a decrease in the price of good A causes a decrease in demand for good B, the two goods are

answer

substitutes.

question

Assuming that turkey, chicken, pork, and beef are substitutes, suppose that the price of turkey has fallen. This will, other things being equal

answer

reduce demand for chicken, pork, and beef.

question

The quantity supplied of a particular good is the amount of the good that

answer

firms are willing to sell at each price during a particular time period.

question

According to the law of supply,

answer

producers provide less of a good when the price decreases

question

A given supply curve illustrates

answer

the relationship between price and quantity supplied.

question

For typical goods, supply curves are

answer

upward sloping

question

Total market supply can be derived by

answer

horizontally summing individual supply curves at each and every price level.

question

Other things being equal, an increase in wages paid to workers in the steel industry will cause

answer

the supply to decrease.

question

An improvement in technology in the production of computers would

answer

increase the supply of computers.

question

There will be an increase in supply when

answer

there is an improvement in technology.

question

A country's labor force is equal to

answer

the total number of employed and unemployed people.

question

The term "unemployment" is best described as the total number of

answer

adults who are looking for work but have not found a job.

question

Individuals who have stopped looking for work because they are convinced that they will not find a job are considered

answer

discouraged workers.

question

The rate of unemployment is calculated as the number of

answer

unemployment divided by the number of people in the civilian labor force.

question

To be officially counted as unemployed, a person must be

answer

at least 16 years old.

question

Costs of unemployment will always exist since

answer

the output lost due to the fact that the economy is not running at full employment.

question

Frictional unemployment include

answer

some workers will always want to make a job transition.

question

Bob's assembly line job has been replaced by robots, and Bob lacks abilities and skills required to attain other jobs. He is considered

answer

structurally unemployed.

question

A lifeguard who is out of work in the winter is

answer

seasonally unemployed.

question

Cyclical unemployment occurs when

answer

a downturn in economic activity decreases employment.

question

Inflation is best described as a situation in which

answer

the average of all prices are on a sustained rise over a period of time.

question

A sustained decrease in the average of all prices of goods and services in the economy is known as

answer

deflation.

question

The rate of inflation and the purchasing power of money are

answer

inversely related.

question

The consumer price index shows

answer

the cost of today's goods expressed in terms of the cost of goods in a base year.

question

The value of money for buying goods and services is known as

answer

purchasing power.

question

The year that is chosen as the point of reference for comparison of prices in other years is known as the

answer

base year.

question

The GDP deflator is a

answer

price index measuring the changes in prices of all new goods and services produced in the economy.

question

Fully anticipated inflation occurs when

answer

the actual inflation rate equals the anticipated inflation rate.

question

Who stands to gain as a result of unanticipated inflation?

answer

Debtors.

question

A COLA is

answer

an automatic increase in wages that takes into account increases in the price level.

Econ Exam 1 Flashcard

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