Economics Chapter 1,2,3,4 quizzes – Flashcards
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an increase income will shift the demand curve for an inferior good to the left
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True
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Baseballs and Bats are complementary goods
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True
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In competitive markets sellers are price makers
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False
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The gains from specialization and trade are based on absolute advantage
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False
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Trade allows countries to consume outside their production possibilities frontier
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True
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If one producer has the absolute advantage in the production of all goods, then that same producer will have the comparative advantage of all goods as well
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False
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Trade allows all countries to achieve greater prosperity
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True
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If a good is normal, then a decrease in income will result in a
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decrease in demand for the good
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A very hot summer in Atlanta will cause
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the demand curve for lemonade to shift to the right
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A increase in the price of a good will
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decrease quantity demanded
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The shift in the demand curve to the left could be caused by
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a decrease in the price of the complement
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Regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes ceramic vases, but Regan is better at producing both goods. In this case, trade could
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Benefit both of them
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Mike and Sandy are two workers who both make tables and chairs. In one month, Mike can make 4 tables or 20 chairs, while Sandy can make 6 tables or 18 chairs. Given this
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Mike has absolute advantage in chairs because he can make more chairs then Sandy in one month
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If Iowas opportunity cost of corn is lower than Oklahoma's opportunity cost of corn then
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Iowa has a comparative advantage in the production of corn
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If labor in Mexico is less productive than labor in the United states in all areas of production
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Both Mexico and The U.S can benefit from trade
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By definition exports are
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goods produced domestically and purchased by foreigners
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Because Resources are scarce, a society cannot give all individuals the standard of living to which it aspires to be
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True
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Market power and externalities are two possible causes of market failure
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True
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A production possibilities frontier has a bowed shape if the opportunity cost is constant at all levels of output
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False
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If United States decided to trade with Mexico only Mexico would benefit from this trade
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False
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Economics is the study of how society allocates its unlimited resources
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False
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High school athletes who skip college to become professional athletes
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understand the opportunity cost of attending college is really high
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England can only benefit from trade
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with any country
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The government enforces property rights by
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providing police and courts
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When economists are trying to explain the world they are
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scientists
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Which of the following is an example of a positive as opposed to normative statement
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Prices rise when the government prints too much money
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Which of the following is an example of a normative statement
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Should statements
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Which of the following would most likely be studied by a macroeconomist
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the effect of an increase in the minimum wage on an economy's overall rate of unemployment
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Sellers and buyers are
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across from each other on the graph
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The economy has the ability to produce
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only on the frontier an below the frontier
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The opportunity cost of an item is
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what you give up to get that item
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opportunity cost of x is
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slope of y/x
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opportunity cost of y is
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slope of 1/y/x
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The most important determinant of living standards is
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productivity
