Econ Test 1-4 – Flashcards

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question
A minimum price set above the equilibrium price is a:
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price floor
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In the mid 1960s, the percentage of total output the United States devoted to health care was about ________ percent.
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6
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As the fraction of health-care costs paid by consumers falls, their quantity of health-care services consumed increases.
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True
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Which of the following would lead to an increase in the demand for health care?
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The average population age increases.
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Between 1930 and 1933, the prices received by farmers tended to:
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decrease
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One source of high health care costs is the:
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relatively large fraction of health care expenditures paid by third-party payers.
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In terms of equity, existing farm policies tend to help:
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wealthy farmers more than poor farmers.
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Eliminating third-party payer systems is most likely to ________ the quantity of health care ________.
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decrease; demanded
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A market price floor for wheat:
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increases the price paid by consumers.
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Health care is a(n)
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normal good
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The market for health care is characterized by which of the following? (a)significant third-party payments (b)a falling fraction of the total cost the consumers of health care actually pay (c) dramatic increases in costs because of technological advances in medical care (d) all of the above
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all of the above
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Economists classify health care as:
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a normal good
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A feature of the health-care market is:
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that demand has increased relative to supply.
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A decrease in supply is caused by:
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a decrease in the price of a good using the same resources.
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A decrease in both supply and demand will lead to a decrease in equilibrium quantity.
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true
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Which of the following would shift the demand curve for new textbooks to the right?
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An increase in college enrollments.
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A decrease in price will lead to an increase in the quantity demanded.
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true
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A supply curve that is upward sloping means that:
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suppliers will want to sell more at higher prices.
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Which of the following will result in an increased price of milk?
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A shift to the right of the demand curve for milk.
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There can be no shortages or surpluses at the equilibrium price.
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true
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In a competitive market, when price is below the equilibrium price, there will be pressure for the price to:
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rise
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A factor of production that is produced in order to produce something else is called:
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capital
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Inefficiency occurs when an economy is operating outside its production possibilities curve.
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false
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The North Korean economy is currently classified as:
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command socialism.
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If two countries participate in free trade:
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both countries as a whole will gain from the trade.
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Any point inside a production possibilities curve indicates:
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unemployment and/or inefficiency.
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If an economy is producing a combination of goods that places it inside the production possibilities curve, then it has:
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idle factors of production or inefficient use of resources.
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Human capital is:
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the set of acquired skills and abilities that workers bring to the production of goods and services.
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The basic economic differences among nations throughout history concerning institutions, philosophy, and ideology mainly focus on:
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the ownership of factors of production and how they are coordinated in economic activity.
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Improvements in technology provide benefits to: (a)consumers, through lower prices. (b) workers, although some jobs may be eliminated. (c) firms, through lower production costs. (d) all of the above.
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(d) all of the above.
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In a command socialist economy:
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resources are government owned and government exercises broad power over their use.
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If countries do not engage in international trade: (a) they give up the ability to specialize in production. (b) worldwide levels of production are lower. (c) the world will be operating inside its production possibilities curve. (d) all of the above are true.
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(d) all of the above are true.
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The "all other things unchanged" assumption is used to:
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simplify the very complex real world.
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A person who mistakenly assumes that because one event follows another, the second event results from the first commits the fallacy of:
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false cause
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Opportunity cost is:
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the value of the best alternative forgone in making any choice.
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A free good is one that can be acquired without sacrifice.
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true
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The fallacy of false cause is committed when a person mistakenly assumes that one event causes another because the first event precedes the second.
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true
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The concept of scarcity indicates that:
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almost all goods have alternative uses.
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A basic assumption used in many economic models is:
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ceteris paribus, which means all other things remain unchanged.
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The answer to, "What goods are to be produced ?" deals with:
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the kinds and quantities of goods and services produced.
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The study of a single firm and how it determines prices would fall under:
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microeconomics
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A simplified representation of a particular problem is a:
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model
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Ceteris paribus means:
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all other things unchanged
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The Case in Point on oil extraction implies that the environmental damage associated with future oil extraction is likely to :
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rise because more environmentally invasive procedures will be required to extract oil.
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An example of a normative statement is:
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A high rate of economic growth is good for the country.
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The branch of economics that examines the impact of choices on aggregates in the economy is:
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macroeconomics
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A scarce resource is one that:
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has two or more alternative uses.
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Statements that are a hypothesis or statement of fact are:
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positive
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If the opportunity cost of manufacturing machinery is lower in the United States than in Britain and the opportunity cost of manufacturing sweaters is higher in the United States than in Britain, then the United States will:
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import sweaters from Britain and export machinery to Britain.
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A production possibilities curve measures cost in terms of dollars spent, not in terms of sacrificed alternatives.
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false
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In market capitalism:
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factors of production are privately owned and decisions are made privately.
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If an economy has to sacrifice only one unit of good X for each unit of good Y produced throughout the relevant range, then its production possibilities curve has a(n):
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constant, negative slope.
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