Exam questions Flashcards
1
Q
What is a free good
A
A good that has zero opportunity cost
2
Q
What is the consequence of using money instead of a barter system
A
Removed the need for a double coincidence of wants
3
Q
When is an economy allocatively efficient
A
The output maximizes consumer welfare
4
Q
What is the effect of price increasing in a substitute good
A
Demand will increase
5
Q
If government provides free healthcare what will have to happen as a result
A
Some level of rationing because demand
6
Q
What do weights in the CPI show
A
The proportion of total expenditure spent on different categories of goods and services
7
Q
Explain what is meant by GDP per capita
A
The income/expenditure/output of a country divided by its population
