Flashcards on TRUE/FALSE
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When manufactured goods are used to produce other goods and services, they are called capital goods.
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TRUE
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A nondurable good lasts for less than five years when used on a regular basis.
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FALSE
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Economic growth occurs when a nation's total output of goods and services increases over time.
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TRUE
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The circular flow of economic activity describes an economy that is free of markets.
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FALSE
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Economics is a social science because it deals with how people behave while trying to satisfy their needs and wants through use of relatively scarce resources.
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TRUE
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Economic products consist of both goods and services that are useful, relatively scarce, and transferable to others.
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TRUE
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Time is an opportunity cost when a manufacturer assigns workers to one task rather than to another.
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TRUE
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The production possibilities frontier can be reached even if certain resources remain idle.
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FALSE
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Capitalism is a competitive economic system in which private citizens own the factors of production.
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TRUE
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Voluntary exchange is a characteristic of command economies
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FALSE
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Preferred stock represents the nonvoting ownership of a corporation.
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TRUE
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Limited liability is one characteristic of the corporate form of business organization.
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TRUE
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A proxy is a written promise issued by a corporation to repay borrowed money at a later date.
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FALSE
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One disadvantage of a general partnership is each partners' responsibility for the acts of all other partners.
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TRUE
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Cooperatives can be organized to help consumers, provide services, or help producers.
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TRUE
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Social Security is an example of government's direct role in the economy
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FALSE
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he dividends of stockholders in a corporation are subject to double taxation.
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TRUE
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A consumer cooperative can offer members prices that are lower than those charged by regular businesses.
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TRUE
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A desire to buy a product is the only requirement needed for demand to exist.
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FALSE
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A supply curve is a graph that shows the various quantities supplied at a single market price.
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FALSE
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When more suppliers enter the market, the market supply will typically decline.
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FALSE
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The theory of production deals with the relationship between the factors of production and the output of goods and services.
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TRUE
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The Law of Variable Proportions states that in the short run, output will not change as one production input is varied while the others remain constant.
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FALSE
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The production function describes the relationship of changes in output to different amounts of a single input while other inputs are held constant.
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TRUE
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An increase in output as each new input is added, as in the addition of a worker, describes Stage I of the stages of production.
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TRUE
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An increase in the cost of inputs can cause the supply curve to shift to the left.
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TRUE
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The supply curve is likely to be elastic for products that can be made quickly without huge amounts of capital and skilled labor
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TRUE
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Economists often use an academic model to help analyze behavior and predict outcomes
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FALSE
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If the price of an item is too high in a competitive market, a shortage appears until the price goes down.
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FALSE
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Market situations lacking one or more of the characteristics of perfect competition are called imperfect competition.
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TRUE
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A government monopoly is a monopoly based on ownership or control of a manufacturing method or process.
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FALSE
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A private agency usually approves prices for water and electric utilities
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FALSE
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The U.S. government intervenes in the economy to reduce the costs of imperfect competition
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TRUE
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Non-price competition is the use of advertising, giveaways, and other promotional campaigns to win customers.
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TRUE
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Market failure can occur when resources do not move freely from one industry to another
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TRUE
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The Sherman Antitrust Act prohibits monopolistic competition
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FALSE
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The United States government uses taxes to reduce the effects of negative externalities.
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TRUE
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Japan experienced outstanding economic growth during the 1970s and 1980s.
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TRUE
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North Korea is one of the economically successful Asian Tigers.
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FALSE
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During the 1990s, Sweden restructured its economy to pure capitalism.
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FALSE
