Econ 102 - Exam 1 - Sample 2 Flashcards
Things that are valuable are things that are ____
Scarce
Because of the answer to question 1, we have to make _____
Question 1 things that are valuable are things that are scarce
Choices
A good is anything that
Creates utility for at least one person
Capital is defend as
Anything used to make a good
The four factors of production are capital, land, labor, and _______.
Entrepreneur
Maria spends $100 on a ticket to a concert and goes without telling her mother, who did not want her to go, and who finds out from someone else that Maria went anyway. The opportunity cost of the concert to Maria is:
The $100 she spent
The loss of her mother’s trust.
Good choices involves comparing
Opportunity costs to benefits.
Globalization is defined as:
The economic integration of nations
(True/False) Globalization benefitted everyone in Columbus’ time, but today it creates winners and losers.
False
(True/False) Globalization has happened historically when new technologies change the
nature of business relationships between countries.
True
(True/False) Scientists believe that it is possible to disprove theories, but not to prove them
correct.
True
On the _____ is the economist’s word for making decisions based on the costs or benefits of one more of something.
Margin
(True/False) The most common reason goods are made in different countries in different
ways is that the mix of labor and capital is different in the different countries
True
_______ means getting the most output per unit of input
Efficiency
_________ _______ is the economist’s phrase for a person’s education, training, and skills
Human Capital.
(True/False) When England gained colonies such as the US and India, it was able to facilitate
free trade among them, and switched from Mercantilism to Comparative Advantage as a result. That success is why economists believe in free trade.
False
MErcanitlists believe that to gain from trade, a country must:
Export, but not import.
(True/False) Mercantilism is not believed or used by any countries today.
False
(True/False) Mercantilism argues that trade is a form of war, no different from using armies
True
The theory of comparative advantage believes that to gain from trade, a country must:
Specialize and trade
_____ is about making your country strong, _____ is about making everyone better off.
Mercantilism, comparative advantage
(True/False) The same three basic economic questions apply to all economies, regardless of
their “ism
True
Capitalism is called that because the ______ is previously owned
Capital
In socialism, the ____ creates the answers ot the basic economic questions.
Government
(True/False) Because you cannot negotiate with Albertson’s shopping there is not technically a market.
False
A _______ occurs when someone pays a cost for for someone else’s choice.
Externality
A common property resource will be:
Over used
Example: People chopped the trees when it was for common property resource
A public good is (among other things):
Nonrivalous
Adam Smith’s theory and the US deceleration of Indepednecne are based on the philosophy of John Locke which says that:
Government exists to protect people’s property rights
(True/False) If the price of a good is set below the equilibrium price, a shortage of the good
will result
True
(True/False) Demand and supply both increase by moving to the right.
True
If free trade can benefit everyone, why is it that some countries continue to pursue mercantilist philosophies?
If countries use Mercantilist philosophies they are manipulating trade in such a way that it will advantage them and make their country richer.
(Essay) why is capitalism preferred by economists over socialism
Capitalism gives us incentive and gives us decentralized. In capitalism they make their own decision.
More incentive in capitalism
Less incentive in socialism since their is no reason to work harder when you wont be awarded more.
