Economics Flashcards
If a country wants to prevent its exchange rate from rising it could do what?
If a country sells its own currency, this would increase supply and keep the price down.
Economics focuses on three basic questions:
- What to produce?
- For whom to produce?
- How to produce?
Economics calls the money I do not earn:
Opportunity cost.
The essence of a market economy is?
Freedom.
A market economy relies on what to allocate resources?
Market forces. (Supply and Demand).
An example of a country with a planed economy is…?
China.
Resources that are readily abundant are considered what?
Free goods.
Free Goods.
Are goods that are not scarce.
Which of the following is NOT an example of a scarce resource?
Carbon Dioxide.
Scarce Resources.
Scarcity is based on the idea that a limited supply of goods and services comes up against an ever-increasing demand for it, as a result, every effort must be made to ensure its proper utilization and distribution in order to avoid inefficiency. Most goods and services can be defined as scarce since individuals desire more of them than they already possess (scarcity is maintained by demand). Ex. Diamonds.
Scarcity is maintained by…?
Demand.
What are the factors of production in economics?
Land, labor, capital, and entrepreneurship.
Quotas, license fees, and subsidies are a part of?
A planned economy via government intervention (excluding taxes).
Macroeconomics studies the elements of economics on the…?
National level. It is probably the largest sub-field of economics and includes output, consumption, investment, government spending, and net exports.
Microeconomics is the study of economic behavior of…?
Small economic groups such as firms and families.
Which of the following businesses has the highest barrier to entry?
The automotive industry.
Which is the best way to describe the GNP?
It is the Gross National Product and is defined as the total goods and services produced by the nation in a given year.
Perfect competition for the most part is…?
A theoretical extreme.
In a monopoly..?
One firm controls the entire industry, so the firm IS the industry. Consumers are at the mercy of the monopoly and there is no competition.
Which of the following is an example of monopolistic competition?
The film industry. In a market structure in which several or many sellers each produce similar , but slightly different products , monopolistic competition is a very common market form. Each producer can set its price and quantity without affecting the marketplace as a whole.
What is an oligarchy?
Is a market form in which a market or industry is dominated by a small number of sellers.
