Exam 1

Question 0

What does trade do?

Answer 0

Creates value and increases the wealth created by a society’s resources.

Question 1

Scarcity

Answer 1

Whenever there is less of a good or resource freely available from nature than people would like.

Question 2

Factors that cause a “change in demand”:

Answer 2

Changes in consumer income.
Changes in the number of consumers in the market.
Changes in the price of a related good.
Changes in expectations.
Demographic changes.
Changes in tastes and preferences.

Question 3

Normative Economics

Answer 3

“What ought to be”

Question 4

What happens when the demand for a good increases?

Answer 4

It’s price will rise.

Question 5

Perfectly vertical demand line.

Answer 5

Perfectly inelastic.

Question 6

Statements that can neither be confirmed not proven false by scientific testing.

Answer 6

Normative

Question 7

Good intentions don’t necessarily mean…

Answer 7

Good outcomes.

Question 8

Ceterus paribus

Answer 8

Other things constant

Question 9

Value is..

Answer 9

Subjective

Question 10

The benefit or satisfaction that an individual expects from the choice of a specific alternative:

Answer 10

Utility

Question 11

Positive economics

Answer 11

“What is”

Question 12

Shift in the entire demand curve:

Answer 12

Change in demand

Question 13

Movement along the same demand curve.

Answer 13

Change in quantity demanded

Question 14

Shows max amount of any two products that can be produced from a fixed set of resources, showing possible trade offs between them.

Answer 14

Productions Possibility Curve

Question 15

Total output will be greatest when the output of each good is produced by the person with the lowest opportunity cost for that good.

Answer 15

Law of Comparative Advantage

Question 16

Choice

Answer 16

Act of selecting among alternatives.

Question 17

Statements that involve potentially verifiable or refutable propositions.

Answer 17

Positive

Question 18

Tools, machines and buildings.

Answer 18

Physical resources

Question 19

Where is price located?

Answer 19

Y-axis

Question 20

Where is amount located?

Answer 20

X-axis

Question 21

Transaction costs:

Answer 21

Time, effort and other resources necessary to conclude an exchange.

Question 22

Shift of the supply curve.

Answer 22

Change in supply

Question 23

There is an inverse relationship between the price of a good or service and the quantity of it that consumers are willing to purchase.

Answer 23

The Law of Demand

Question 24

There is a direct relationship between the price of a good and the amount suppliers are willing to produce.

Answer 24

The Law of Supply

Question 25

What kind of slope is demand curve?

Answer 25

Negative

Question 26

Producer surplus:

Answer 26

Above supply, below middle point.

Question 27

Flat demand curve

Answer 27

Elastic

Question 28

Steep demand curve

Answer 28

Inelastic