USATestPrep Econ Review – Flashcards
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As nations learn to specialize in production, they will trade with other nations when what happens?
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They have comparactive advantage in trade
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Consumers are told that the consumption of cauliflower will significantly reduce the risk of cancer. Which of these scenarios is likely to happen in the cauliflower market?
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The demand curve will shift to the right and the price of cauliflower will
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How do consumers express self-interest?
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Seeking the lowest price for a product
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Which of these types of unemployment is characterized by peaks of joblessness at specific times of the year?
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Seasonal
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Which of these types of unemployment is characterized by peaks of joblessness at specific times of the year?
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The new technology can replace outdated, less efficient, machinery
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How might the purchase decisions of consumers impact a market economy??
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By buying some products, but not others, consumers might determine what is produced
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Homer has decided to buy a trampoline. The trampoline cost $2000.00. He borrows the money from the Springfield bank at an interest rate of 19%. He pays the entire $2000.00 at the end of the year with simple interest. What are his finance charges?
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$380.00
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What is an implicit opportunity cost of attending technical school?
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The wages that you could be earning at a job
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Travis takes two trips to Ecuador. On his first trip, he finds that one US dollar is worth 25,000 Ecuadorian Sucre. On his return trip, he finds that the dollar is now worth 26,000 Ecuadorian Sucre. What is a LIKELY result of this change in exchange rates?
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More Americans will travel to Ecuador
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A sales tax is considered a ___ Tax because it tends to affect those with low incomes more than it does people with higher incomes.
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Regressive
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The federal government is offering a $1,000 tax rebate for those people who purchase a new, fuel-efficient vehicle during the next tax year. Why would the government offer a tax rebate for purchasing a new, fuel-efficient vehicle?
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to encourage better use of limited resources of fossil fuels
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The Federal Reserve System controls the size of the
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money supply
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Many companies sell different types of cell phones. Some consumers prefer to use a specific brand because of its different kind of features. This is an example of
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monopolistic competition
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High inflation could discourage people from taking college classes because
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prices for books and tuition would be rising
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During a recession, what will the federal government MOST LIKELY do to stabilize the economy?
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significantly change its spending
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What is an economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service?
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Demand
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If businesses use the internet to find less expensive resources, what will be the impact on productivity?
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Productivity will increase as the price of resources decreases
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In general, when aggregate supply exceeds aggregate demand, what is likely to result?
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Deflation
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The EU and ASEAN have a trade agreement in effect since 1980, however the EU refuses to trade with Burma/Myanmar as long as human rights are an issue in that country. This is an example of
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trade barriers
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Ravi receives a credit card offer in the mail. The offer contains a low introductory rate. Although all of these are important factors, which of these should he investigate FIRST before accepting the offer?
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the APR after the introductory period expires
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If there was an sudden change in exchange rates that resulted in fewer U.S. Dollars being required to buy a Euro, you could expect
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the dollar to appreciate when compared to the Euro
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How can firms engage in non-price competition?
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Coupons and convenient locations
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If the government regulated a natural monopolist with the intent of achieving price efficiency without subsidies or price discrimination, the monopolist would
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encounter an economic loss
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Monetary policy is BEST described as
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actions by the Federal Reserve System to expand or contract the money supply
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If two people are packing and delivering food, what is the most efficient way to do the job?
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One person packs all the orders and the other delivers them.
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Consumers have a number of options when obtaining a loan. Financial institutions range from banks to payday lenders, and loans range from long to short term. One type of short-term loan is called a title pawn loan. Which statement BEST describes why these types of loans should be avoided if possible?
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A vehicle title must be provided in exchange for a loan, and people can potentially lose their vehicles if loans are not paid back.
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Which part of the Federal Reserve Organization is the only part that is totally influenced by any political office from within the government?
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the Board of Governors
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________ is the ability to repay a loan.
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Capacity
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Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr. Stevens decides to open his sporting goods store, what is the opportunity cost of this decision?
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the opportunity to rent it to another tenant
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This term refers to the overall decrease in the price of goods and services.
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deflation
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With regards to international trade, which economic concept has the most importance on a country's specialization and trade?
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comparative advantage
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what is gained by immediately going to work after graduation instead of attending any post-secondary school?
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money and experience
