Semester One Final (Economics) Flashcards
Qarth has a closed economy. In 2012, the total income of everyone in Qarth was $4 million. The Gross Domestic Product of Qarth in 2012 was
$4 million
In 2000, Azeroth’s exports totaled $300 million and its imports totaled $200 million. In 2000, Azeroth had a
Trade surplus
Oil-rich countries often have a high rate of economic growth thanks to their
Large amount of natural resources
The price elasticity of demand for hazelnuts is 4. Demand for hazelnuts is
Elastic
A good with high excludability and high rivalry of consumption is a
Private Good
Which economist developed a widely used interpretation of efficiency?
Vilfred Pareto
India’s economy is split into three categories: agriculture, services, and
Industry
Since 1900, United States economic growth
Exceeded population growth
A severe recession is a period of
Depression
According to the law of demand, the demand curve for most goods should be
Downward sloping
True or False: Gross Domestic Product can be calculated by summing tax revenue
False
Compared to the rest of the world, India has the fifth largest reserve of
Coal
Supply shocks shift the
Short-run aggregate supply curve
If the reserve ratio is 1/15, the money multiplier is
15
An increase in input prices for a good causes an inward shift in the
Supply curve for the good
The economy went into a recession and Janie was laid off. Janie is currently looking for a job. Janie is
Cyclically unemployed
The Indian government initially sought to restrict trade and foreign investment to
Encourage the growth of domestic industries
The dearth of fish off the Atlantic coast is a result of
A tragedy of the commons
India’s large population and slow economic growth have led to high levels of
Poverty
Lobbying is a common cause of
Rent seeking
Producer surplus is graphically represented by the area
Above the supply curve and below market price
India’s precipitation is
mostly limited to the monsoon season
Scarcity is the combination of finite resources with infinite
Desires
When income increases, the demand for a
Normal good increases
Economists who focus on the behavior of individual firms study
Microeconomics
The “Goods and Services” tax
Has never been established
In 2010, Tom’s car factory ordered a new piece of equipment. In 2010, that piece of equipment was used to manufacture 200 cars. How many times is the value of that piece of equipment counted in 2010’s Gross Domestic Product?
1
In one day, Bill can produce 4 teapots or 6 forks. Assume his production possibility frontier is linear and is graphed so that forks are on the y-axis and teapots are on the x-axis. The slope of the production possibility frontier is
-3/2
Equilibrium occurs when quantity supplied
Equals quantity demanded
Which body uses open market operations, reserve requirements, and the discount rate?
Federal Reserve
The Consumer Price Index for the year 2013 is found by multiplying the cost of the market basket in 2013 by 100 and then dividing the product by
the cost of the market basket in the base year
In the circular flow model, which of the following entities provides land, capital, and labor?
Households
The total accounting costs for a firm is the sum of
All fixed and variable costs
According to Joseph Schumpeter, entrepreneurs create
Creative destruction
Whose return accelerated India’s independence movement?
Mohandas Gandhi
The Delhi-Mumbai Industrial Corridor aims to improve Indian
Infrastructure
The value of the next best choice is the
Opportunity Cost
Olga and Paulita go to a museum. Olga pays $15 for a ticket, but Paulita is a student and therefore only pays $10 for a ticket. The museum has implemented
Price discrimination
True or False: In a perfectly competitive market, the good varies slightly among sellers
False
Economists who focus on analyzing cause and effect without value judgments study
Positive economics
When a good becomes more popular
Both quantity demanded and the market price increase
True or False: Lack of government intervention hurts the Indian agriculture sector
False
Both taxes and monopolies produce
Deadweight loss
An oligopoly occurs when there are a few
Sellers and many buyers
High oil prices put stress on India’s tiny reserve of
Foreign currency
Price elasticity of demand is calculated by dividing percentage change in quantity demanded by the corresponding percentage change in
Price
A surplus exists when
Quantity supplied exceeds quantity demanded
Alan’s coworker enjoys humming at work. Alan can hear this humming and finds it pleasant. The humming is a
Positive externality
The slope of the long-run aggregate supply curve is
infinite
M1 and M2 are both measures of
money
