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BECO Cumulative Quiz > BECO Quiz > Flashcards

BECO Quiz Flashcards

1
Q

An institution, in economics is

A

A rule governing social behavior, like a property right

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2
Q

Rationality, in economics, means

A

individuals pursue their self interest, however they perceive it.

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3
Q

The Scientific aspect of economics is

A

positive- it deals in statements of “is”

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4
Q

Self-interest, in economics, means

A

trying to satisfy one’s preferences

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5
Q

The first law of demand states

A

Price and quantity demanded are inversley related.

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6
Q

All else being equal, consuming additional quantities of a good makes you less and less additionally happy. This principle is known as

A

Diminishing marginal utility

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7
Q

In economics “cost” means

A

The value of the next best forgone alternative

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8
Q

If a bakery currently is earning 2% accounting profit, but all other bakeries in town are earning 5% then the first bakery’s profit economically speaking is?

A

-3%

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9
Q

Which of these is an example of a variable cost ( in the short run)

A

wage payments to labor

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10
Q

A firm’s Average cost curve will typically have what shape?

A

Parabola- U shaped

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11
Q

Which of the following laws of economics is the best description of what determines a worker’s wages?

A

Diminishing marginal returns.

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12
Q

A firm maximizes profit by producing at the point where?

A

Marginal revenue = marginal cost

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13
Q

The chief feature of markets is

A

Facilitating anonymous cooperation, and harnessing dispersed knowledge.

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14
Q

Which of the following is a shifter of demand

A

changes in income, and changes in expected future price.

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15
Q

Which of the following is shifter in supply?

A

Price of a factor of production

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16
Q

Which of the following is the best descriptor of how markets work, according to the supply and demand model

A

Market activity is mostly random

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17
Q

In economics, a situation from which nobody has any incentive to change his or her behavior is called

A

equilibrium

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18
Q

the variable that adjust to “clear” markets is

A

price

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19
Q

Which of the following conceptions of entrepreneurship was discussed in chapter 4?

A

entrepreneurship as ‘creative destruction’ and entrepreneurship as ‘alertness to profit opportunities’

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20
Q

Hayek’s article “ The Use of Knowledge in Society.” was published in what year

A

1945

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21
Q

Hayek’s article is about

A

How markets harness dispersed knowledge

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22
Q

Which of the following are examples of price price discrimination

A

volume discounts, personal characteristic discounts, knowledge-based discounts

23
Q

socialism is best defined as

A

a system where all the means of production are publicly owned . e.g., no private property.

24
Q

what role do prices perform in a market economy

A

provide information about potentially profitable production ex ante
provide feedback about actual profitability ex post
provide and environment for creative arbitrage and entrepreneurship

25
Q

What phenomenon do Fama and Jensen explain in their article

A

Separation of ownership and control

26
Q

Which of the following assumptions is used in building the ‘perfect competition model’

A

homogeneous product (output)
Large number of buyers and sellers
zero transaction costs

27
Q

According to Coase, which of the following best explain why firms exist

A

minimization of transaction cost

28
Q

What role does profit perform in a market economy

A

an incentive roe: profits reward successful production

an information role: profits give firms the knowledge they need to know if they are producing successfully.

29
Q

The best prediction of whether a firm will behave like a monopolist is

A

if there are legal barriers to entry

30
Q

According to Alchian and Demsetz, which of the following is not part of the explanation as to why firms exist?

A

separation of ownership and control

31
Q

A government’s budget deficit is

A

the excess of spending over revenue

32
Q

Which of the following is not of one of Adam Smith’s Taxation

A

Taxes should be flat, i.e., directly proportional to wealth, regardless of an individuals’ level of wealth

33
Q

Which of the following does not partly determine a bond’s price

A

interest rate on the bond

34
Q

The chief function of banks is

A

financial intermediary’s.

35
Q

All else being equal , $100 today is worth more than $100 a year from now. what concept explains why

A

time value of money

36
Q

according to Salter (2014), monetary policy is best conceived as

A

adjustment of the money supply to meet macroeconomic goals

37
Q

Which of the following rules or institutions is not discussed by Salter (2014)

A

100% reserve banking

38
Q

Which of the following is an example of s real variable

A

unemployment rate

39
Q

Inflation can be socially costly because

A
  • it may change the relative prices of goods and services
  • it may induce individuals to expend resources hedging against it.
  • it may result in individuals confusing genuine supply and demand changes with purely monetary changes.
40
Q

What is the phrase that refers to the erosion of the value of government bonds by inflation.

A

debt monetization

41
Q

Which of the following equations is relevant to understanding fiscal policy

A

Y=C+I+G+NX

42
Q

in order to have a stimulation effect, fiscal policy must

A

increase the deficit

43
Q

if fiscal policy significantly raises interest rates, the result can be

A

crowding out

44
Q

in order to be most effective, fiscal policy must be

A

timely, targeted,and temporary

45
Q

Which of the following economist developed ideas that challenged orthodox notions of fiscal policy

A
  • F.A. Hayek
  • Milton Friedman
  • James Buchanan
46
Q

Normal spending , also called nominal GDP, is the same thing as

A

aggregate demand.

47
Q

Which of the following are not concepts Salter (2014) employs to argue in favor of monetary policy rules

A

Irrationality problems

48
Q

Which of the following can result from taxation

A
  • individuals work less
  • individuals expend resources to avoid the tax
  • individuals emigrate.
49
Q

The (false) belief that a nation’s weatlh depends on its trade balance is known as?

A

Mercantilism

50
Q

Which of the following statements accurately describes international trade?

A
  • Trade is positive-sum
  • Trade fosters specialization and growth
  • Trade contributes to a level economic playing field
51
Q

The principle stating that nations can benefit from trade with each other, even if one nation is better at producing everything than another nation is called

A

comparative advantage

52
Q

if a country has a current account deficit. what also must be the case?

A

The country has a capital account surplus

53
Q

If interest rates in the U.S. rise relative to interest rates in the U.K., what would you expect to happen

A

The dollar will appreciate against the pound

BECO Cumulative Quiz (1 decks)

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