Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics > 2023 Test 1 > Flashcards

2023 Test 1 Flashcards

1
Q

What is the “economy”?

A

The Economy is us.

What we collectively produce and consume is what the economy produces and consumes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is Macroeconomics?

A

the study of aggregate economic behavior of the economy as a whole

The ‘big picture’, things such as full employment, control of inflation, and economic growth

Doesn’t worry about the well-being or behavior of specific individuals or groups

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is Microeconomics?

A

the study of individual behavior in the economy

concerned w/ the details from individuals, firms, and government agencies that compose the economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the 3 Core Choices every nations confronts?

A

WHAT to produce with our limited resources,
HOW to produce the goods and services,
FOR WHOM goods and services are produced

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is Scarcity?

A

Lack of enough resources to satisfy all desired uses of those resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the definition of Factors of Production?

A

The resources(inputs) used to produce goods and services(outputs) are called?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the Four Basic Factors of Production?

A

Land, Labor, Capital, Entrepreneurship are?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

The science of Economics is?

A

the study of the choices made as we attempt to deal with scarcity?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is Opportunity Costs?

A

the most desired resource(s) forgone to get something else is called?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is an Economic model?

A

a scaled down, simplified version of real world observations?

uses a limited number of variables to explain these observations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are Economic models used for?

A

Used to:

Explain economic behavior

Predict the impact of economic events

Design the economic policies used by government

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is Ceteris Paribus?

A

assumption of “other things remaining equal” is called?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are Production possibilities?

A

the alternative goods and services that could be produces in a given period with available
resources is called?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Efficiency means?

A

squeezing maximum output out of available resources?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Inefficiency means?

A

he actual output is less than the potential

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Economic Growth is?

A

increase in output (real GDP); an expansion of production possibilities?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what is laissez faire?

A

the doctrine of “leave it alone”, nonintervention by government in the market mechanism?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Who argued for a middle ground between laissez-faire and govt. takeover?

A

The British economist John Maynard Keynes argued?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Market failure means?

A

when the invisible hand has failed to achieve the best possible outcomes?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Government failure occurs when?

A

when the government intervention fails to improve market outcomes or makes them worse?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Which Analysis focuses on how things might be done without subjective judgment of what is “best”

Which Analysis incorporates subjective judgments(including moral) about what ought to be done.

A

Positive analysis vs Normative analysis?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

For a competitive market we need?

A

Large number of buyers and large number of sellers are needed for?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Factor Markets are?

A

where factors of production(land, labor, capital) are bought and sold?

(If you go to work for example, your employee is purchasing your services.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Opportunity CostProduct Markets are?

A

where finished goods and services are bought and sold?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

The consumer is?

A

the final recipient of all goods and services produced?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Who are Market Participants?

A

310 million consumers, 25 million business firms, tens of thousands of government agencies and International participants are also a part.

*A market exists wherever and whenever an exchange takes place

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

The consumers’ objective?

A

objective to buy the most desirable goods and services that their budgets will permit?

28
Q

What is Businesses objective?

A

objective to to maximize profits by using resources efficiently?

29
Q

The Public Sector objective is?

A

objective to use available resources to serve public needs?

30
Q

Why specialize and trade?

A
  1. We are incapable of producing everything we want to consume
  2. Even if we could produce everything, it takes more resources and makes more sense to specialize and trade for other desired goods
31
Q

Every market transaction involves a 2-way exchange of?

A

exchange of dollars(product markets) or resources(factor markets).

32
Q

Supply is?

A

the ability AND willingness to sell(produce) specific quantities of a good at alternative prices.

33
Q

What does demand mean?

A

means a willingness AND ability to purchase a specific product at alternative prices

34
Q

What is Market Demand?

A

the total quantities of a good or service demanded; the sum of individual demand

35
Q

The Law of Demand claims…

A

claims there is an inverse relationship between price and quantity demanded ḈṖ

If Price ↑, then Qo(quantity demanded) ↓

If Price ↓, then Qo ↑

36
Q

A Demand Schedule is

A

a table showing the quantities of a good consumers are willing and able to buy at prices

37
Q

A Demand Curve is

A
38
Q

What is Determinants of Demand

A

Things other than price determine the buying decisions of consumers

39
Q

Determinants of Demand include…

A
  1. Tastes and preferences
  2. Income
  3. Other Goods (Substitute goods and Complimentary goods)
  4. Expectations of Future (prices/tastes/incom)
  5. Number of buyers
40
Q

When does the demand curve shift?

A

when changes in demand happen(due to Determinants of Demand changes)

41
Q

Market Supply are…

A
42
Q

The Law of Supply states…

A

states there is a direct relationship between price and quantity supplied(cetpar)Market Supply are…

If P ↑, then Qs ↑

If P ↓, then Qs ↓

43
Q

What is determinants of supply

A

things besides price that induce suppliers to provide a product or service

44
Q

The determinants of market supply include:

A
  1. Technology
  2. Factor costs
  3. Other goods{profitability of Prod.)-if producing other goods provide you more money, there is little incentive
  4. Government Intervention-a. subsidies b. taxes
  5. Expectations-of future prices
  6. Number of sellers - too much competition
45
Q

Supply curves shift when?

A

the underlying determinants of supply change.

46
Q

Equilibrium

A

Occurs at the perfect intersection of the supply and demand curves.

47
Q

What is Equilibrium Price

A

P*-When quantity demanded = Quantity supplied

48
Q

What is market mechanism?

A

aka the invisible hand, adjusts based on sales & prices=Price signal

49
Q

Market Shortage

A

at a given price, the amount by which Qd exceeds Qs

50
Q

When does a market shortage occurs?

A

occurs if price is too low to clear the market

51
Q

What is a price floor?

A

a set minimum price charged

52
Q

What is Market Surplus

A

at a given price, the amount by which Qs exceeds Qd

53
Q

When does a market surplus occurs?

A

occurs when the price is too high to clear the market

54
Q

The equilibrium price of a product will increase if…

A

a. The demand for a good increases
b. The supply of a good decreases

55
Q

The equilibrium price of a product will decrease if…

A

a. The demand for a good decreases
b. The supply of a good increases

56
Q

What is a Price Ceiling?

A

a maximum limit set on the price of a good

57
Q

What 3 effects do price ceilings have

A
  1. Increase the quantity demanded
  2. Decrease the quantity supplied
  3. Create a market shortage
58
Q

What is Psychologists explanation of why we consume?

A

basic Freud Theory: Ego: Must satisfy basic human needs for security, sex, and ego gratifications.

59
Q

What is Sociologists explanation of why we consume?

A

“Conspicuous Consumptions”: to receive recognition from the masses.

Self-Preservation: to keep oneself safe and protected in order to continue living

60
Q

What is utility?

A

the pleasure or satisfaction received from consuming a product.

61
Q

What is disutility?

A

the displeasure or dissatisfaction received from consuming a product

62
Q

What is Marginal Utility?

A

the amount of satisfaction from consuming the last specific unit of a product

63
Q

What is Total Utility?

A

the satisfaction obtained from your entire consumption of a product

64
Q

the law of diminishing marginal utility says…

A

the MU of a good declines as more of it is consumed in a given period

65
Q

What does Optimal Consumption mean?

A

the mix of output that maximizes total utility for the limited amount of income to spend

66
Q

What is the Utility-Maximizing Rule?

A

MU(a)/P(a) = MU(b)/P(b)

67
Q

What is Utility Maximization?

A

to maximize your total utility, the consumer should choose the good that delivers the most marginal utility per dollar

Economics (16 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions