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the study of economics is important because it enables us to

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c. become better decision makers

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the dollar value of all final goods and services and the most comprehensive measure of a country's total production output is

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d. gross domestic product (gdp)

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a popular model used to illustrate the concept of opportunity cost is

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a. the production possibilities frontier.

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the money used to buy the tools and equipment needed for production is known as

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c. financial capital.

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study the graph. suppose this nation starts with producing all military goods. it then decides to produce a mix of civilian and military goods represented by point b. what represents the cost in military goods given up?

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d. the vertical distance from point a to point x

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what is the difference between a factor market and a product market? explain how these markets are dependent on each other.

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factor market (land, labor, capital, entrepreneurship) product market (goods and services) the factor market isnt really the final product; there are still things that aren't complete about these goods. they sell them to firms first which goes to the product market to finalize the products. they are interdependent because if no buys chips, then lays goes out of business and then no one needs to buy potatoes so eventually the farm goes out of business as well.

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circle flow graph

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firm --> product market (good/services) --> household --> factor market (land/labor/capital/entrep.) BIG CYCLE

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the purpose of the government in a command economy is to

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c. make major economic decisions

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an example of a market economy is

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c. the united states

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which of the following is not considered an economic and social goal?

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d. entrepreneurship

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which group of people ultimately determines the products that a free enterprise economy produces?

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d. consumers

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the united states can best be described as having a

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a. modified private enterprise system.

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all of the following are characteristics of a command economy except

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a. it can change direction drastically in a brief period of time

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a market economy

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a. does not provide for everyone's basic needs.

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the minimum wage is an example of a federal law that supports

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b. economic equity

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the concept of voluntary exchange means

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b. people freely and willingly engage in market transactions.

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the government's role in a mixed economy is that it is the

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c. regulator charged with preserving competition.

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what is the disadvantage of a traditional system? explain why a traditional system causes the standard of living to come to a stand still

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disadvantages: this type of system discourages new ideas and new ways of doing things, there is a stagnation and a lack of progress, and there is a lower standard of living. in a traditional system, there is little to no progress when it comes to evolving because they have a system where your job has already been predetermined. because of this fact, most people accept their fate and carry on with life. there is rarely anybody that changes the flow of how things already are.

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unlike a general partnership, in a limited partnership

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b. the inactive partner has limited liability for the business's debts.

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this regulates the sale of stock in a corporation.

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b. securities and exchange commission

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a merger of corporations involved in different steps of manufacturing or marketing is known as a

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c. vertical merger

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non-profit organizations may

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c. provide goods and services to members.

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the local chamber of commerce works to

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a. promote the welfare of its members and the community

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in a general partnership,

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c. partners usually draw up legal papers called articles of partnership

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an advantage of a corporation is that

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c. owners have limited liability for debt

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all of the following are examples of the government playing a direct role in the economy except

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a. public utility regulation

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which of the following is not a nonprofit organization?

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a. multinational

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in its direct role as an economic organization, american government

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c. owns and manages public utilities

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five things that will cause a shift on demand graph

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income, taste, expectations, number of consumers, price of related goods

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when a consumer is able and willing to buy a good or service, he or she creates which of the following?

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b. demand

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what are inferior goods?

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d. goods for which the demand falls when income rises

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what determines how a change in prices will affect total revenue for a company?

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a. elasticity of demand

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what does it mean when the demand for a product is inelastic?

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b. a price increase does not have a significant impact on buying habits

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what kind of table lists the quantity of a good that a person will buy at different prices?

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a. demand schedule

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when prices rise, which of the following happens to income?

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b. it buys less.

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all of the following can change the market supply curve except

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c. a change in the demand for the product

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the supply of a product normally decreases if

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d. taxes on the product increase

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total cost is the sum of the

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c. fixed and variable costs

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which of the following is not a reason why prices effectively perform the allocation function?

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c. prices remain surprisingly stable despite unexpected events.

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in a market economy, a high price is a signal for

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a. producers to supply more and consumers to buy less.

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at a given price, a surplus occurs when

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d. the quantity supplied is greater than the quantity demanded.

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the federal minimum wage law demonstrates

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b. a societal choice for economic equity over efficiency

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prices enable a market economy to adjust to unexpected events by

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d. adjusting consumption and production

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if a competitive market is at equilibrium, and if there is a sudden increase in demand, then a temporary

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d. shortage will occur and the price will increase.

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the theory of competitive pricing

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c. is a set of ideal conditions and outcomes.

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perfect competition is characterized by all of the following except

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c. sellers acting together to set prices

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a monopoly that is based on the ownership or control of a manufacturing method, process, or other scientific advance is a

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d. technological monopoly

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a decrease in competition within an industry can result in

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c. a firm wielding economic and political power

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the sherman antitrust act

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a. outlawed restraints and monopolies that hindered trade.

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the government is involved in the US economy for all of the following reasons except to

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d. promote the development of market externalities.

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under perfect competition

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c. no seller sells a product above the prevailing market price.

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when a major car company lowers its prices, other car makers will probably

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d. lower their prices

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mergers and acquisitions might result in

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d. inadequate competition

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the clayton antitrust act

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c. outlawed price discrimination

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indirectly, the government has improved the quality of information available to consumers through

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b. its support for the internet.

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the incidence of a tax can more effectively be shifted from the supplier to the consumer if

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a. the demand curve is inelastic

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the authority to levy a federal income tax comes from

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b. the 16th amendment

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intergovernmental revenues are generally intended for

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a. education and public welfare

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the flat tax

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d. simplifies the tax process.

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the "incidence of tax"

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b. refers to those who bear the final burden of taxation

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