Economics

Question 1

What are the three main parts of Economics? hint PDC

Answer 1

Production, Distribution, and Consumption.

Question 2

Define Scarcity?

Answer 2

Our resources are limited.

Question 3

With Economics we start learning more about the _____ we have to make?

Answer 3

Choices.

Question 4

With Choices comes a certain ___?

Answer 4

Cost.

Question 5

Everytime we get something, we..

Answer 5

give something up.

Question 6

What are the 3 factors of production? LLC

Answer 6

Land, Labor, and Capital.

Question 7

What is an Entrepreneur?

Answer 7

A person who puts together land, labor, and capital to make new businesses.

Question 8

What is it called when we choose one course of action over another?

Answer 8

Trade-off.

Question 9

What is it called when we give up the most desirable alternative given up for the decision?

Answer 9

Opportunity cost.

Question 10

What is thinking at the margin?

Answer 10

Sometimes a decision involves whether to add or subtract one additional unit of a resource.

Question 11

What does a production of possibilities graph show?

Answer 11

Alternative ways of using a country’s or producer’s resources.

Question 12

What is efficiency?

Answer 12

Uses it’s resources in such a way to maximize production.

Question 13

What is under-utilization?

Answer 13

An economy using fewer resources than it is capable of using.

Question 14

What does the production of possibilities frontier line show on the graph?

Answer 14

It shows the maximum possible production.

Question 15

In a traditional economy what do people live and work as?

Answer 15

Their ancestors.

Question 16

In a free market economy what are people free to do?

Answer 16

Buy and sell whatever their money allows.

Question 17

In a centrally planned economy who makes all the economic decisions?

Answer 17

The Government.

Question 18

What do nations today prefer?

Answer 18

A mixed economy.

Question 19

What is the term used to describe the belief that the government should not intervene in the market?

Answer 19

Laissez-Faire.

Question 20

The free enterprise is a mostly free market economy with…

Answer 20

limited government intervention.

Question 21

In the free enterprise, the government does intervene in the economy when it is…

Answer 21

in the public interest.

Question 22

What is it called when the market doesn’t provide the goods or services consumers need?

Answer 22

A market failure.

Question 23

What is public goods?

Answer 23

A good or service created by the government through tax dollars.

Question 24

What is it called when a person uses a good or service but would not choose to pay for the good and service?

Answer 24

A free rider.

Question 25

What is Automobile pollution an example of?

Answer 25

Negative externality.

Question 26

What is the cancer fighting properties in tomato sauce an example of?

Answer 26

Positive externality.

Question 27

Demand curve shows how price influences the amount...

Answer 27

people want to buy.

Question 28

Demand schedule records...

Answer 28

the quantity demanded at various prices.

Question 29

What is the law of demand?

Answer 29

States that consumers buy more of a good when its price decreases.

Question 30

The substitution effect occurs when a consumer reacts to an increase in a good's price by buying less of that good and more...

Answer 30

of a similar yet cheaper good.

Question 31

What is the income effect?

Answer 31

The change in consumption resulting from change in income. OR When prices rise, your money buys less.

Question 32

The law of supply is the tendency of suppliers to offer more of a good at a...

Answer 32

higher price.

Question 33

A supply curve is a graphic representation showing the tendency of suppliers to supply...

Answer 33

more at higher prices.

Question 34

A supply curve will always rises...

Answer 34

left to right.

Question 35

Elastic is blank to changes in price or income.

Answer 35

Sensitive.

Question 36

Inelastic is blank to changes in price or income.

Answer 36

Insensitive.

Question 37

If equilibrium is quantity supplied equals quantity demanded then disequilibrium is...

Answer 37

Quantity supplied that does not equal the quantity demanded.

Question 38

What is it called when the quantity supplied is greater than quantity demanded?

Answer 38

Surplus.

Question 39

What is another name for surplus?

Answer 39

Excess supply.

Question 40

Does the price have to raised or lowered to restore the market to equilibrium if a surplus happened?

Answer 40

Lowered.

Question 41

What is it called when quantity demand is greater than quantity suplied?

Answer 41

Shortage.

Question 42

What is another name for shortage?

Answer 42

Excess demand.

Question 43

When a shortage happens do you have to raise or lower the price to restore the market to equilibrium?

Answer 43

Raised.

Question 44

If prices are viewed as lights on a traffic light, what are high prices (green/red) to consumers/suppliers? 2 answers.

Answer 44

``` consumers = red suppliers = green ```

Question 45

If prices are viewed as lights on a traffic light, what are low prices (green/red) to consumers/suppliers? 2 answers.

Answer 45

``` consumers = green suppliers = red ```

Question 46

Why is rationing costly to administers?

Answer 46

It requires government planning.

Question 47

What are corporations owned by?

Answer 47

Stockholders.

Question 48

What can corporations not be ? Because they are considered separate entitys.

Answer 48

Sued.

Question 49

What is it called after corporations pay taxes on their profits, and individual stockholders must also pay taxes on their dividends or share of their profits?

Answer 49

Double Taxation.

Question 50

When a person buys stock, he is buying partial ownership in a...

Answer 50

corporation.

Question 51

When a person buys a bond, he is loaning money to a corporation or g...

Answer 51

government.

Question 52

Stocks, you ... Bonds, you ....

Answer 52

Stocks, you own. Bonds, you loan.

Question 53

What is it called when investors make money on their investment?

Answer 53

Return.

Question 54

What is the term that describes payments made by corporations to stockholders?

Answer 54

Dividends.

Question 55

Describe what Capital Gain is?

Answer 55

Selling a stock for more than its original purchase price.

Question 56

If Capital Gain is selling a stock for more than its original purchase price, what is Capital Loss?

Answer 56

Occurs when an investor sells his stock for less than the original purchase price.

Question 57

What is the "thing" called that monitors and reports generally on the trading activities of thirty of the most powerful companies?

Answer 57

The Dow or The Dow Jones Industrial Average.

Question 58

What is it called when the stock market rises steadily over a period of time?

Answer 58

A Bull Market.

Question 59

What is it called when the stock market falls over a period of time?

Answer 59

A Bear Market.

Question 60

What determines how much money each person in a society would receive if wealth from GDP was divided equally among the people of that nation?

Answer 60

Real GDP Per Capita.

Question 61

Describe what Capital Deepening is... | The process of increasing the amount of...

Answer 61

capital per worker.

Question 62

What is the tool for tracking macroeconomic progress?

Answer 62

GDP (Gross Domestic Product).

Question 63

What is Gross Domestic Product?

Answer 63

Is the dollar value of all final goods and services produced within a country's borders in a given year.

Question 64

Explain the difference between durable and non-durable goods?

Answer 64

Durable is when goods last for a long time. | Non-durable is when goods last for a short time.

Question 65

What is it called when a contraction lasts for atleast six months?

Answer 65

Recession.

Question 66

*Blank* is a particularly severe and long contraction.

Answer 66

Depression.

Question 67

What is the money supply made of? | HINT- two things that start with M.

Answer 67

M1 and M2.

Question 68

If M1 is money that people can easily use to pay for goods and services, like cash and checks. Example what M2 is...

Answer 68

Assets that must be converted to cash before they are used, like savings accounts and mutual funds.

Question 69

What is Interest?

Answer 69

The price of borrowed money.

Question 70

By learning the language of banking,...

Answer 70

a person makes better choices.