question

The market mechanism

answer

uses prices as a means of communication between consumers and producers

question

Economic growth is represented by

answer

An outward shift of the production possibilities curve.

question

In economics, capital refers to:

answer

Goods that can be used to produce other goods.

question

Because the economy is so complex, it is impossible to construct a theory about how it works

answer

True

question

Economic growth always takes the form of

answer

An expansion of production possibilities.

question

The essential signal of the market mechanism is: Income.

answer

Price

question

Opportunity cost may be defined as the:

answer

The value of goods or services that are forgone in order to obtain something else.

question

Scarcity means

answer

The desire for goods exceeds our capacity to produce them.

question

The essential feature of the market mechanism is:

answer

Government taxation of profits.

question

Which of the following is an example of labor as a factor of production?

answer

The skills and abilities of workers.

question

Ceteris paribus which of the following is likely to cause an outward shift of the production possibilities curve?

answer

Investment in telecommunications networks.

question

Which of the following is associated with microeconomics?

answer

An increase in sales for a chain of pet supply stores.

question

The production possibilities curve shifts outward in response to:

answer

Improved technology or more resources or both.

question

Entrepreneurship refers to:

answer

Ability to see market opportunities and the will to take risk.

question

Which of the following is NOT a reason why the U.S. government intervenes in the economy?

answer

To make a profit for the government.

question

Adam Smith was a proponent of the doctrine of laissez faire.

answer

True

question

Sole proprietorships:

answer

Are owned by one individual.

question

Per capita GDP measures the distribution of income within a country.

answer

False

question

Over the last century in the United States there has been an increase in _______ as a percentage of total output.

answer

Services

question

Ceteris paribus, economic growth involves an:

answer

Expansion of production possibilities.

question

GDP can be found by:

answer

Adding the monetary value of all final goods and services produced during a given period of time.

question

The dumping of chemicals into a lake, which contaminates the drinking water, is an example of:

answer

An externality.

question

The United States has invested heavily in human capital by promoting education and skill training.

answer

True

question

Currently, the U.S. economy is best described as:

answer

A service economy.

question

The government has an impact on the HOW to produce question when it does all of the following EXCEPT:

answer

Follows a policy of laissez faire.

question

Productivity measures:

answer

Output per worker.

question

If the United States imports more than it exports, this implies that the country uses more goods and services than it produces.

answer

True

question

The term externalities refers to:

answer

Some costs and benefits of a market activity borne by a third party.

question

Factor mobility refers to:

answer

How easily factors of production can be reallocated.

question

GDP is a measure of the market value of final goods and services produced within a nation's borders in a given period.

answer

True

question

In the United States, net exports account for two-thirds of GDP.

answer

False

question

Which of the following is included in investment, according to economists?

answer

Production of plant and machinery.

question

To compare the standard of living of one country to another, economists use:

answer

Per capita GDP.

question

Income transfers include all of the following EXCEPT:

answer

Wages.

question

In periods of rising prices, real GDP will always rise more rapidly than nominal GDP.

answer

False

question

The output of cell phones can be added to the output of refrigerators in order to compute GDP by:

answer

Multiplying the output of each by the corresponding prices and adding these dollar values.

question

Producers:

answer

Purchase factors of production from the factor market.

question

If demand is constant, a decrease in the supply of gasoline will cause the equilibrium price:

answer

To rise and quantity to fall.

question

According to the law of demand, a change in _______ causes a movement along the demand curve.

answer

The price of the good

question

An increase in the supply of frozen yogurt will take place when:

answer

The cost of producing frozen yogurt decreases.

question

A market in which finished goods and services are exchanged is a:

answer

Product market.

question

Ceteris paribus means:

answer

Holding everything else constant.

question

A movement along the supply curve is the same as a:

answer

Change in the quantity supplied.

question

Producers do not participate in the factor market.

answer

False

question

Ceteris paribus, which of the following will cause the supply of paper to decrease?

answer

The price of lumber, an ingredient in paper production, increases.

question

When a price ceiling is set for a market, the quantity demanded will be:

answer

Greater than the equilibrium quantity, and price will be less than the equilibrium price.

question

According to the law of demand:

answer

Price and quantity demanded are inversely related.

question

Economists make a distinction between changes in quantity demanded and changes in demand:

answer

To distinguish a movement along a demand curve from a shift of the demand curve.

question

When a price floor is established above the equilibrium price, the market will adjust by way of:

answer

A greater quantity supplied

question

Ceteris paribus, _______ can change without shifting the demand curve for jackets.

answer

The price of jackets

question

If demand is constant, a leftward shift in the supply curve will result in:

answer

A decrease in equilibrium quantity and a higher equilibrium price.

question

Ceteris paribus, which of the following will cause the demand for peanut butter to decrease?

answer

Many people learn that they are allergic to peanut butter.

question

Economic interactions with others are necessary because:

answer

Resources are limited.

question

Surpluses are the same thing as excess:

answer

Supply caused by price floors.

question

The market demand curve is calculated by:

answer

Summing the quantities demanded from individual demand curves.

question

Which of the following is relatively inelastic with respect to demand?

answer

A good with few substitutes.

ECON STUDY!!!!

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards