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jeremy harmon > Macro Quiz 1 > Flashcards

Macro Quiz 1 Flashcards

1
Q

In the circular flow illustration what should go on the bottom of the arrow pointing from factors market to business?

A

Factors of production

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2
Q

Instead of using sunk cost fallacy what decision making method should you use?

A

Economic decision rule

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3
Q

In the circular flow illustration what should go on top of the arrow pointing from goods market to households?

A

Goods and services

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4
Q

Comparative Advantage

A

Someone who is better suited to do the production of one good than to the production of the other good

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5
Q

How does a market economy answer the 3 key economic questions?

A

The market answers these questions

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6
Q

What decision method should you not use in economics?

A

Sunk Cost Fallacy

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7
Q

Absolute Advantage

A

Who can make more with the same amount of resources

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8
Q

For government where should you have arrows pointing?

A

Have 2 sided arrows(➡️⬅️) to and from households and business

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9
Q

If supply and demand shift in the same direction what will be unknown?

A

Price

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10
Q

When does supply and demand shift?

A

When there are two effects or if you see “and”

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11
Q

When is there no shift on the supply and demand graph?

A

If only price changes

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12
Q

Sunk Cost

A

Are costs that you already had to pay and cannot be recovered

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13
Q

How does a traditional economy answer the 3 key economic questions?

A

Tradition answers all three key economic questions

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14
Q

What goes at the top of the circular flow diagram illustration

A

Goods Market

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15
Q

At the end of the drawing of the circular flow diagram what should you do?

A

Have arrows going in both directions connecting the four sectors of the economy together

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16
Q

In the circular flow illustration what should go on the bottom of the arrow pointing from government to households?

A

Services

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17
Q

What are the 3 key economic questions?

A

What to produce?
How to produce it?
Who gets what?

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18
Q

What are the five things included in a circular flow diagram illustration?

A 
Government
Goods Market
Business 
Factors Market
Households
19
Q

What goes on the right in the circular flow diagram illustration

A

Business

20
Q

If supply and demand shift in opposite directions what will be unknown?

A

Quantity

21
Q

In the circular flow illustration what should go on the bottom of the arrow pointing from government to business?

A

Services

22
Q

In the circular flow illustration what should go on top of the arrow pointing from government to households?

A

Tax

23
Q

What goes on the bottom in the circular flow diagram illustration

A

Factors market

24
Q

When does a shift in supply happen?

A

Something that affects how much people want to produce

25
Q

What is the return on the factor of production for land?

A

Rent

26
Q

When does a shift in demand occur?

A

Something that affects how much people want to consume it

27
Q

What are the 3 factors of production?

A

Land
Labor
Capital

28
Q

What are the 2 returns on the factor of production for capital?

A

Interest

Profits

29
Q

How does a market economy answer the first key economic question: what to produce?

A

Consumers ultimately dictate

30
Q

Quota

A

A license that the government implements which limits entry into the market

31
Q

What is the return on the factor of production for labor?

A

Wages

32
Q

What goes in the center of the circular flow diagram illustration

A

Government

33
Q

What is an example of a quota?

A

Taxi driver license

34
Q

In the circular flow illustration what should go on the bottom of the arrow pointing from households to goods market?

A

Money

35
Q

In the circular flow illustration what should go on top of the arrow pointing from business to factors market?

A

Factor Payment

36
Q

Economic decision making rule

A

If marginal benefit is greater than the marginal cost we should do it

37
Q

What goes on the left in the circular flow diagram illustration

A

Households

38
Q

Sunk cost fallacy

A

Making decisions based on sunk costs

39
Q

How does a command economy answer the 3 key economic questions?

A

The government determines the answers to these questions

40
Q

Marginal Cost

A

Any new cost you will have to pay if you do something knew

41
Q

What are quotas also known as?

A

Quantity restrictions

42
Q

How does a market economy answer the 3rd key economic question: Who gets what?

A

Pricing system

43
Q

How does a market economy answer the 2nd key economic question: How to produce it?

A

Firms choose based on maximizing their profits

44
Q

In the circular flow illustration what should go on top of the arrow pointing from government to business?

A

Tax

jeremy harmon (108 decks)

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