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Economics > Midterm > Flashcards

Midterm Flashcards

1
Q

Deciding whether to do or use one additional unit of some resource

A

Thinking on the margin

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2
Q

A phrase that refers to the trade-offs governments face

A

Guns or Butter

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3
Q

An ambitious leader who creates new goods or services

A

Entrepreneur

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4
Q

All human made goods that are used to produce other goods

A

Physical capital

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5
Q

The effort that people devote to a task

A

Labor

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6
Q

Physical objects (food, phones, etc.)

A

Goods

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7
Q

An item that we desire but is not essential to live

A

Want

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8
Q

The common sense science of how and why people, businesses, and governments make the choices they do

A

Economics

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9
Q

Anything that is finite or limited in quantity

A

Scarcity

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10
Q

Using wisely and well what God has given

A

Stewardship

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11
Q

Determined due to the nature of the product

A

Intrinsic value

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12
Q

Also known as a schedule and a popular method of explaining simple relationships between pairs

A

Tabular model

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13
Q

Contains a horizontal and vertical axis

A

Line graph

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14
Q

Provides a complete visual explanation of how a complete economic system functions

A

Circular Flow Model

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15
Q

Land, labor, capital and entrepreneurship

A

Factors of production

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16
Q

The payment made on borrowed money

A

Interest

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17
Q

When government spending exceeds what it receives in taxes

A

Budget deficit

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18
Q

The difference between revenues received and costs that go into production

A

Profit

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19
Q

All payments for labor

A

Wages

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20
Q

The activity of creating new and useful goods and services

A

Consumption expenditures

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21
Q

Household spending on goods and services

A

Principle of Diminishing Marginal Utility

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22
Q

A graph that shows an alternative way(s) to use an economy’s resources

A

Production Possibilities Curve

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23
Q

The willingness of consumers to purchase the products and the actual act of purchasing it

A

Demand

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24
Q

Goods that experience an increase in demand because of an increase of consumer incomes

A

Normal Goods

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25
Q

Goods that households use in place of others

A

Substitute Goods

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26
Q

Goods that are usually purchased or used together

A

Complementary Goods

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27
Q

Items that see a decline in sales as consumer income increases

A

Inferior Goods

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28
Q

When a demand curve shifts to the left or right

A

Change in Demand

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29
Q

When the government dictates that the price may not rise any higher

A

Price Ceiling

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30
Q

A barrier that prevents prices from falling below the market price

A

Price Floor

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31
Q

The price at which consumers are willing to take from the market; the exact quantity of a product that suppliers that will put in the market

A

Market Equilibrium Price

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32
Q

Supply fluctuations (Up or Down)

A

Change in Supply

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33
Q

What is the difference between an economic cost and an opportunity cost?

A
  • Economic cost- the value people place on a good or service and is reflected by its price
  • Opportunity cost- the satisfaction a person gives up or the regret experienced by not choosing differently
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34
Q

Why do instability and scarcity necessitate choice?

A

Choices are necessary because they pull a person in opposite directions; both cannot be satisfied.

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35
Q 
Explain and give an example of any three of the following: 
>Good
>Service 
>Free Good 
>Nuisance Good 
>Economic Service 
>Free Service
A 
-Good- physical objects 
      Ex. food items 
-Service - non tangible good 
      Ex. buses 
-Free good- physical goods you don't have to pay for 
       Ex. air and water
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36
Q

What is the difference between microeconomics and macroeconomics? Give examples of each.

A
  • Microeconomics- choices made by individual units (U.S. Individuals)
  • Macroeconomics- large scale economics (big companies)
37
Q

What character quality is essential for the Christian to have victory over insatiability?

A

Contentment

38
Q

What are the two purposes for economic models?

A

> Instruction

> Prediction of future events

39
Q

For an economist, what is the primary value of a production possibilities curve?

A

A PPC enables an economist to see the maximum feasible amounts that a business can produce with its limited resources.

40
Q

Name the four factors of production or the four payments business make in exchange for the factors of production.

A

Land, Labor, Capital, Entrepreneurship

Rent, Wages, Interest, Profit

41
Q

Why is the financial market necessary for the effective functioning of a developed society?

A

Financial market takes the savings of houses and channels them to businesses so that the financial capital can help business firms operate effectively.

42
Q

The willingness of businesses to produce more of their product at any given price

A

Increase of supply

43
Q

With what economic principle do we most often associate Ludwig vos Mises?

A

Free market

44
Q

Who identified the principle of diminishing marginal utility?

A

William Stanley Jevons

45
Q

State the law of demand.

A

Everything else being held constant, the lower the price charged for a good or service, the greater the quantity people will demand and vise versa.

46
Q

When an individual makes a decision at the margin, how does he determine the amount to obtain?

A

The individual chooses the amount to obtain at which the marginal benefit just offsets the marginal cost.

47
Q

What four conditions may change the demand for a product?

A
  • Change in people’s incomes
  • Change in price of related goods
  • Change in people’s tastes and preferences
  • Change in people’s expectations
48
Q

What are the three functions of prices?

A

> Transmit information
Provide incentives
Redistribute income

49
Q

State the law of supply.

A

The higher the price buyers are willing the pay, other things being held constant, the greater the quantity a supplier will be willing to produce and the inverse is true.

50
Q

What occurs when the price of a product is higher than the price at which supply equals demand?

A

Surplus

51
Q

What is the simplest solution to a surplus?

A

The producer lowers the price until the quantity demanded equals the quantity he has to supply.

52
Q

Which way does a supply curve slope and why?

A

Slopes upward to the right indicating that the greater the price buyers are willing to pay for the product, the greater the quantity the firms will supply.

53
Q

What three factors could lead to a change in supply?

A
  • Changes in technology
  • Changes in production cost
  • Changes in the prices of related goods
54
Q

True/ False

Opportunity benefit is the regret you feel over a choice you made.

A

False

55
Q

True/ False

Positive economics refers to making value judgements about existing or proposed economics policies.

A

False

56
Q

True/ False

Normative economics observes economic choices and predicts economic events.

A

False

57
Q

True/ False

Menger proposed that an individual’s decisions are based on personal utility.

A

True

58
Q

True/ False

Economics is considered a science.

A

True

59
Q

True/ False

A line graph provides more data than a tabular model.

A

True

60
Q

True/ False

On a PPC, the point on the curve represents inefficient production.

A

False

61
Q

True/ False

Financial capital is the tool that business firms use to produce goods and services.

A

False

62
Q

True/ False

Entrepreneurship is the most important factor of production.

A

True

63
Q

True/ False

Transfer payments involve the government.

A

True

64
Q

True/ False

If the government receives less in taxes than it is paying out, it is operating under a budget surplus.

A

False

65
Q

True/ False

Dissaving is any time households withdraw money from an account or borrow it.

A

True

66
Q

True/ False

Crowding out has nothing to do with governmental budget deficits.

A

False

67
Q

True/ False

A financial market is the collection of a nation’s financial institutions.

A

True

68
Q

True/ False

Inferior goods increase in sales as consumer income increases.

A

False

69
Q

True/ False

When a demand curve stays the same, economists say that the product is experiencing a change in demand.

A

False

70
Q

True/ False

Whenever a change in price causes a change in the number of items demanded, a change in quantity demanded has occurred.

A

True

71
Q

True/ False

US currency is currently based on gold and silver.

A

False

72
Q

True/ False

According to the World Factbook, the USA now has the 3rd largest GDP in the world.

A

True

73
Q

True/ False
The principle of diminishing marginal utility states that people tend to receive less and less additional satisfaction from any good or service as they receive more and more of it during a specific period of time.

A

True

74
Q

True/ False

Complementary goods work best when separated.

A

False

75
Q

True/ False

China has the largest GDP in the world.

A

True

76
Q

True/ False

The average American has no idea how bad our debt situation is.

A

True

77
Q

True/ False

A shift to the right on a supply schedule generally means that a decrease in supply has occurred.

A

False

78
Q

True/ False

When a supply schedule is plotted on a graph, it is called a supply curve.

A

True

79
Q

True/ False

Supply is the amount of goods and services business firms are willing and able to provide at different prices.

A

True

80
Q

True/ False

The point at which buyers and sellers disagree is called the market equilibrium point.

A

False

81
Q

True/ False

A surplus is an excess of unsold products.

A

True

82
Q

Baby step 1

A

1,000 dollars in emergency fund

83
Q

Baby step two

A

Pay off all debt except for house , utilizing debt snowball

84
Q

Baby step 3

A

3 to 6 months of expenses in savings

85
Q

Baby step 4

A

Invest 15% of your household income into Roth IRAs and pre tax reiterment plan

86
Q

Baby step 5

A

College funding

87
Q

Baby step 6

A

Pay of your home early

88
Q

Baby step 7

A

Build wealth and give

Economics (22 decks)

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