econ Flashcards
why might a nation continue domestic production even when imports are cheaper
following strategic trade policy
what best describes schumpter’s creative destruction concept
economic progress requires the elimination of outdated industries
in economic decision making what characterizes a Nash equilibrium
no player improve their position by acting alone
how does the coase theorum address externalities
private bargaining can resolve externalities when transactions are low
what is the correct definition of rent-seeking
increasing wealth share without creating new value
how does diminishing marginal utility support taxation policy
it justifies higher tax rates on higher incomes
what relationship does the Phillips curve illustrate
inflation and unemployment levels
what moral hazard concern exists with bank bailouts
banks might take greater risks due to bailout expectations
what does the herfindahl hirschman index measure
market concentration levels
how does the stolper Samuelson theorem affect trade
trade benefits export-intensive factors
what is the impossible trinity in economics
cannot simultaneously have fixed echamge rates, free capital movements, and independent monetary policy
what does akerlof’s market for lemons demonstrate information asymmetry
market failure can result from asymmetric information
what defines the efficent market hypothesis
asset prices reflect all available information
how does simon’s satisficing concept challenge traditional economics
it suggests people seek adequate rather than optimal solutions
What is the Mundell-Fleming model’s key insight about fiscal policy
it works better under fixed exchange rates
what is the fundamental problem of economics
scarcity
who is considered the father of modern economics and wrote the wealth of nations
Adam smith
which of the following is not a principla of economics thinking
every decision leads to profit
what is an example of an economic enigma
why movie theater popcorn is so expensive
what are the four factors of production
labor, land, capital, entrepreneurship
which is the following best defines opportunity cost
the next best alternative given up when making a decision
a production possibilities curve PPC shows:
the maximum possible output combinations of two goods
what type of economic system is based on customs and traditions
traditional economy
in a command economy, who decides what goods and services will be produced
the government
the U.s is best classified as a
mixed market economy
In a capitalist economy, prices are determined by
supply and demand
what is one key characteristic of socialism
public ownership of key industries
example of public good
highways
what is the main goal of a command economy
equal distribution of wealt
which economic system is most associated with Karl Marx
communism
what does the term laissez faire mean
the economy should be free from government interference
what happens when a monopoly exists in a market
one company controls all or most of the supply
which law was passed to prevent monopolies in the US
the Sherman antitrust
what is globalization in economic terms
the increase in reliance on trade interdependence among nations
what does guns vs butter mean
a country’s decision to allocate resources between military and consumer goods
