Econ Pre Test 2 – Flashcards

Items that are purchased by individuals for their own enjoyment are called consumption goods and services.

A consumption good or service a personal computer purchased in order to play games at home.

The largest share of total production in the United States is consumption goods and services.

An example of capital good would be, Antonio, the manager of the local Taco Hut, purchases a new deep fryer.

Tecnology is NOT considered one of the factors of production?

As a factor of production, oil reserves are counted as "land."

The concept of human capital describes human skills, that is, the quality of labor.

Jan is attending college and studying to be an investment broker. To improve her chances of employment following college, she has interned at a top brokerage firm during the last two summers. Jan's internship has increased her human capital.

An MRI machine is NOT directly related to human capital?

Capital, as a factor of production, refers to the tools and instruments used to produce other goods and services.

"Stocks and bonds that are sold by Pepsico" are NOT considered capital?

The productive resource that organizes labor, land, and capital is entrepreneurship.

Payments to the factors of production are rent, wages, interest, and profit or loss.

The majority of the income earned in the United States is paid in "Wages."

In the United States, the poorest 20 percent of households earn roughly __3__ percent of total income.

The personal distribution of income in the United States shows that the richest 20 percent of individuals receive approximately 50 percent of total income.

Approximately _ 310 million_ people live in the United States and _7 billion_ people live in the world.

The most people live in _developing_ economies and the fewest people live in _emerging market_ economies.

Russia is NOT classified as an advanced economy?

Canada is classified by the International Monetary Fund as an advanced economy.

Most of the world's population lives in developing economies.

Poland is classified as an emerging market economy.

Physical capital differences across countries can be seen in the fact that more advanced economies typically have more sophisticated technology.

Of the following, the country with the highest average income per day in the world is the United States.

_Households are_ the owners of the factors of production, while _ firms determine_ what amounts of those factors to hire.

The circular flow model is used to show the flow of expenditures and incomes in the economy.

In the circular flow model, there are two types of markets: the _goods__ market and the _factor_ market.

In the circular flow model, consumption goods are bought and sold in the goods market.

The circular flow model shows that goods and services flow from businesses to households.

n the circular flow model, the factor markets are the markets in which land, labor, capital, and entrepreneurship are bought and sold.

A real flow in the circular flow diagram is a household's purchase of a new car AND, a farmer's use of land to grow corn.

As the circular flow model shows, the factors of production flow from households to firms through the factor market.

In the circular flow model, "wages, rent, interest, and profit" - flows in the opposite direction from the flow of factors of production.

In the circular flow model with the government sector, transfers flow in the opposite direction as do taxes.

Collecting property taxes is NOT a function of the federal government.

The total amount the federal government has borrowed to make expenditures that exceed tax revenue is called the national debt.

"Property taxes, sales taxes, and transfers from the federal government," are sources of revenue for state and local governments?

U.S. exports of goods and services flow to households and firms in _the rest of the world_, and U.S. financial inflows of capital flow to households and firms in _the United States_.