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Micro Economics > Chapter 1-3 > Flashcards

Chapter 1-3 Flashcards

1
Q

Society uses the _____as a yardstick for measuring the relative worth of a variety of goods, services, and resources

A. Money
B. Price
C. Commodity
D. Natural resources

A

A. Money

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2
Q

It refers to goods that are used to produce other goods and services.
A. Normal goods
B. Complimentary goods
C Substitute goods
D. Resources

A

Resources

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3
Q

In order for production to take place you need
A. Land
B. Labor
C. Capital
D. Land, labor, and Capital

A

D. Land Labor Capital

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4
Q

It is defined as the price paid for personal service in production

A. Interest
B. Profit
C. Dividend
D. Wage

A

D. Wage

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5
Q

The interaction among economic units involved in production, distribution, exchange, and consumption of goods and services

A. Economic system
B. Economic activity
C. Economic growth
D. Economic stability

A

B. Economic activity

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6
Q

The consuming unit of the economy
A. Business firm
B. Household
C. Government
D. All of the above

A

B. Household

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7
Q

Which of the terms appropriately define economics?

A. Decision making
B. Budget keeping
C. Household management
D. Resource management

A

D. Resource management

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8
Q

All are elements of economic activity except one.

A. Human wants
B. Resources
C. Policy makers
D. Technology

A

C. Policy makers

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9
Q

All are basic needs of man except one.
A. Education
B. Food
C. Clothing
D. Shelter

A

A. Education

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10
Q

All are determinants of demand except one.
A. Technology
B. Income
C. Population
D. Tastes and preferences

A

A. Technology

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11
Q

Man will usually satisfy ________ needs before satisfying the higher level needs.
A. Basic
B. Social
C. Welfare
D. Cultural

A

A. Basic

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12
Q

Producing unit of the economy
A. Business firm
B. Household
C. Government
D. All of the above

A

A. Business firm

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13
Q

Man’s mental and physical efforts exerted in production.
A. Land
B. Labor
C. Entrepreneur
D. Capital

A

B. Labor

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14
Q

All productive activities are based on
A. Distribution
B. Consumption
C. Exchange
D. Marketing

A

B. Consumption

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15
Q

The most commonly used word in economics which means anything that satisfies human wants
A. Demand
B. Scarcity
C Goods
D. Supply

A

C. Goods

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16
Q

It refers to the factors necessary in the creation of wealth.
A. Distribution
B. Consumption
C. Exchange
D. Production

A

D. Production

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17
Q

It refers to monetary value of goods and services.
A. Value
B. Price
C. Quantity
D. Inflation

A

B. Price

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18
Q

Characteristic of demand curve
A. Upward sloping
B. downward sloping
C. Not intersecting
D. Horizontal

A

B.downward sloping

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19
Q

Under Socialist system of economy, major strategic industry is owned,
managed, and controlled by
A. Private individuals
B. Government
C. NGO’S
D. United Nation

A

B. Government

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20
Q

Capitalism is often referred as
A. Mixed economy
B. Command economy
C. Market economy
D. Both A & C

A

C. Market Economy

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21
Q

Inferior goods are goods whose income elasticities are positive.
Complimentary goods are goods that are used together.
A. Statement 1 is true but statement 2 is false
B. Statement 1 is false but statement 2 is true
C. Both statements1 and 2 are True
D. Both statements 1 and 2 are False

A

B. Statement 1 is false but statement 2 is true

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22
Q

Horizontal line is the characteristic of perfectly inelastic demand curve.
Downward sloping is the characteristic of Demand curve.
A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but statement 2 is True.
C. Both statements 1 and 2 are True
D. Both statements 1 and 2 are False

A

B. Statement 1 is False but statement 2 is True.

23
Q

The cross elasticity of demand between Tide and Surf is positive. Substitute goods are goods that replace the consumption of other goods
A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but statement 2 is True
C. Both statements 1 and 2 are True
D. Both statements 1 and 2 are false

A

C. Both statements 1 and 2 are True

24
Q

Which of the following is not an example of of complimentary goods?
A. Bread & Butter
B. Tooth paste & Tooth brush
C. Mango & Apple
D. Coffee & Sugar

A

C. Mango & Apple

25
Q

The price elasticity of demand equals to the percentage change in the quantity demanded divided by the percentage change in price. Price refers to the monetary value of goods and services.

A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but statement 2 is True
C. Both statements 1 and 2 are True
D. Both statements 1 and 2 are False

A

C. Both statements 1 and 2 are True

26
Q

If goods are compliments, definitely their cross elasticities are negative. Coke and Pepsi are examples of complimentary goods.

A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but statement 2 is True
C. Both statements1 and 2 are True
D. Both statements 1 and 2 are False

A

A. Statement 1 is True but statement 2 is False

27
Q

Income elasticity of demand is high for luxury goods. Income refers to goods and services arises from productive activities of the people.

A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but statement 2 is True
C. Both statements 1 and 2 are True
D. Both statements 1 and 2 are Fase

A

C. Both statements 1 and 2 are True

28
Q

Unitary demand elasticity refers to a change in price it results to an infinite change in quantity demanded. Demand is unitary if the price elasticity of demand is equals 1.

A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but statement 2 is True
C. Both Statements 1 and 2 are True
D. Both statements 1 and 2 are False

A

B. Statement 1 is False but statement 2 is True

29
Q

The price elasticity of demand measure the slope of the indifference curve. Price elasticity of demand is elastic if elasticity coefficient is less than 1.

A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but statement 2 is True
C. Both statements 1 and 2 are True
D. Both statements 1 and 2 are False

A

D. Both statements 1 and 2 are False

30
Q

Demand is inelastic if price elasticity of demand is less than 1. Elasticity refers to a change in price it results to an equal change in quantity demanded.

A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but Statement 2 is True
C. Both statements1 and 2 are True
D. Both Statements 1 and 2 are False

A

A. Statement 1 is True but statement 2 is False

31
Q

The demand for food is most elastic for most countries with low level of income. The Law of demand states that consumers are most likely to buy more goods and services at lower price and buy less goods and services at higher price

A. Statement 1 is True but statement 2 is False
B. Statement is false but statement 2 is true
C. Both statements 1 and 2 are True
D. Both statements 1 and 2 are False

A

A. Statement 1 is True but statement 2 is False

32
Q

Semi Luxury and essential goods are examples of what type of price elasticity of demand?

A. Elastic
B. Inelastic
C. Unitary
S. Perfectly inelastic demand

A

C. Unitary

33
Q

Price elasticity of demand refers to a change in price it results to a lesser change in quantity demanded. Coffee and sugar are examples of complimentary goods.

A. Statement 1 is True but statement is False
B. Statement 1 is False but statement 2 is True
C. Both statements 1 and 2 are True
D. Both statements 1 and 2 are False

A

B. Statement 1 is False but statement 2 is True

34
Q

The cross elasticity of demand between goods A & B is positive if both goods are substitutes. Goods refers to anything that satisfies human wants
A. Statement 1 is True but statement 2 is False
B. Statement 1 is False but statement 2 is True
C. Both statements 1 and 2 are True
D. Both statements 1 and 2 are False

A

C. Both statements 1 and 2 are True

35
Q

The word Economics is derived from the latin word Oikonomous which means household management. Household is the producing unit of the economy.

A

A. Statement 1 is True but statement 2 is False

36
Q

Father of economics

A

Karl Marx

37
Q

Capitalism

A

Market Economy

38
Q

Unable to find work

A

Unemployment

39
Q

Institution Dominates

A

Economic system

40
Q

3 types of demand elasticity

A

price, income and cross elasticity

41
Q

Elastic-
Inelastic
Unitary

A

Luxury
Food
Semi Luxury

42
Q

Perfectly Elastic

A

Vertical

43
Q

Perfectly inelastic

A

Vertical

44
Q

Elastic=
Inelastic=
unitary=
1+
less 1
-1

A

greather than 1
less 1
equal 0
normal luxury goods
necessity
inferior goods

45
Q

Schedule quantity of goods, consumers or buyers

A

Demand

46
Q

demand greater than supply

A

shortage

47
Q

supply exceeds demand

A

surplus

48
Q

most likely to buy at lower price

A

law of demand

49
Q

all things remain constant

A

ceteris paribus

50
Q

water,food

A

free goods

51
Q

limited in quantity

A

economic goods

52
Q

food, shelter clothes

A

basic needs of man

53
Q

economics of limited choice

A

Poverty

Micro Economics (1 decks)

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