ECONOMICS FINAL

Question 0

What is an economy?

Answer 0

an economy is the sum total of all decisions regarding the allocation of resources in a given society

Question 1

What is Economics?

Answer 1

the study of how scarce resources are used to meet supply and demand

Question 2

What are the four resource types?

Answer 2

human, natural, capitalst, entrepreneurship

Question 3

What is scarcity?

Answer 3

limited resources, unlimited wants

Question 4

What is opportunity cost?

Answer 4

the total value of what you give up when you make a choice

Question 5

What is utility?

Answer 5

the pleasure, satisfaction, or benefit a person receives from consuming a product or service or from taking an action

Question 6

What is an incentive?

Answer 6

a thing that motivates or encourages one to do something

Question 7

What is a disincentive?

Answer 7

tends to discourage people from doing something

Question 8

What is comparative advantage?

Answer 8

the condition that exists when someone can produce a good or service at a lower opportunity cost than someone else

Question 9

What is cost-benefit analysis?

Answer 9

estimates and totals up the equivalent money value of the benefits and costs to the community of projects to establish whether they are worthwhile.

Question 10

What are the different types of economies?

Answer 10

traditional, command, pure market, and mixed

Question 11

What are the characteristics of a traditional economy?

Answer 11

an economic system in which decisions about production and consumption are based on custom and tradition

Question 12

What are the characteristics of a command economy?

Answer 12

an economic system in which decisions about production and consumption are made by a powerful ruler or government

Question 13

What are the characteristics of a market economy?

Answer 13

an economic system in which economic decisions are left up to individual producers and consumers

Question 14

What are the characteristics of a mixed economy?

Answer 14

an economic system in which both the government and individuals play important roles in production and consumption. most modern economies are mixed economies

Question 15

Who was Adam Smith? What was Wealth of Nationns?

Answer 15

Scottish economist who wrote the wealth of Nations, pioneering the idea of market economy

Question 16

What is the unemployment rate?

Answer 16

the percentage of the labor force that is seeking work.

Question 17

What is frictional unemployment?

Answer 17

when someone is in-between jobs

Question 18

What is structural unemployment?

Answer 18

advances in technology reduce the demand for certain skills

Question 19

What is seasonal unemployment?

Answer 19

demand for labor depends on the season. businesses shut down for part of the year

Question 20

What is cyclical unemployment?

Answer 20

occurs during periods of decline

Question 21

What is economic growth?

Answer 21

a condition in which an economy is expanding and producing more and better goods and services

Question 22

What is the business cycle?

Answer 22

a recurring pattern of growth and decline in economic activity overtime

Question 23

What is self interest?

Answer 23

acting in a manner in your best interest

Question 24

What is trade?

Answer 24

exchange of goods and services

Question 25

What are the goals of any economy?

Answer 25

enrichment of everybody, survival, provide structure

Question 26

What do we mean by Demand and Supply?

Answer 26

demand is how much consumers are able to purchase. Supply is how much is produced

Question 27

What can cause shifts of the Demand Curve?

Answer 27

change in income, change in the number of consumers, change in consumer tastes and preferences, changes in consumer expectation, changes in the price of substitute goods, price of complementary

Question 28

What can cause shifts of the Supply curve?

Answer 28

cost of inputs, number of producers, conditions (natural disaster) , technology, expeectations, government

Question 29

What is money?

Answer 29

medium of exchange, unit of currency, store of value

Question 30

What is the function of Households in the Circular Flow Model?

Answer 30

provide a labor force, purchase goods and services

Question 31

What is the function of businesses in the Circular Flow Model?

Answer 31

produce goods and services

Question 32

What are the different market types?

Answer 32

monopoly, oligopoly, perfect competition, monopolistic competition

Question 33

What is the role of government in the Circular Flow Model?

Answer 33

programs to households, subsidizes businesses

Question 34

What is the role of Financial Markets in the Circular Flow Model?

Answer 34

provide loans to businesses

Question 35

What is GDP?

Answer 35

sum total of all final goods

Question 36

What is GDP per capita?

Answer 36

measure of efficiency

Question 37

What are some short-comings of GDP and GDP per capita as measures?

Answer 37

biased because of outliers

Question 38

What is inflation?

Answer 38

devaluation of money

Question 39

Describe the US economy

Answer 39

high GDP, high inflation

Question 40

What is a public good?

Answer 40

available to anyone, nobody can be prevented from using it

Question 41

What are taxes?

Answer 41

money paid to the government

Question 42

What are the largest items in the US federal budget?

Answer 42

social security, medicare, welfare

Question 43

What is the largest item in state budget?

Answer 43

Education

Question 44

What is a deficit?

Answer 44

shortfall between revenues and expenditures for any given year

Question 45

What is fiscal policy?

Answer 45

taxes and spending

Question 46

Who controls fiscal policy?

Answer 46

Congress

Question 47

When is expansionary fiscal policy used?

Answer 47

during a recession

Question 48

When is contractionary fiscal policy used?

Answer 48

during inflation

Question 49

Who controls monetary policy?

Answer 49

The Federal Reserve