Test 1 Flashcards
Technological Change is a key force in shaping today’s economy, true false
True
The gross domestic product is the dollar value of all goods and services produced by the economy, true false
True
A centrally planned economy encourages investment and innovation, true false
False
Globalization is the exchange of ______ among countries
Money and other financial assets
Workers and jobs
Good Services ideas and people
Communications
Goods services ideas and people
A laissez-faire economy has ____
Rules that promote social equality
Very little government regulation of the economy
Centrally planned economy
A large amount of government regulation
Very little government regulation of the economy
Top down management of an economy by the government generally ______
Causes significant increase in GDP
Leads to low rates of economic growth
Creates incentives and opportunities for businesses to expand
Produces exponential results in economic growth
Leads to low rates of economic growth
Which of the following is not a monetary measure of economic prosperity
Life expectancy
Household consumption
Gross domestic product
Annual household income
Life expectancy
Besides the gross domestic product, another measure of how well an economy is doing is
Presidential popularity polls
Publications and economic journals
Annual household income
Government tax rates
Annual household income
Financial markets do not include, which of the following
Stock markets
Nonprofit organizations
Banks
Government regulatory agencies
Nonprofit organizations
Federal taxes have, which of the following effects on the economy
If taxes are increased, the economy expand due to a balanced budget
If taxes are decreased, businesses will invest the difference back into the economy
There is no definitive agreement on the effect
Lower federal taxes will cause budget surplus
There is no definitive agreement on the effect
For the United States one important benefit of foreign trade is
Access to cheaper goods and services
Less domestic competition
Reality check in the economy
Hires tax revenues from tariffs
Access to cheaper goods and services
An example of a company that uses financial market to raise money is
The Social Security administration
Your local carryout restaurant
A local television news website
Ford motor company
Ford motor company
Which of the following countries have safety nets that offer a better retirement, benefits and more job security than the US safety net?
European countries
Asian countries
South American countries
Our nearest neighbors
European countries
Renewable energy sources provided blank of US energy needs as of 2022
13%
10%
Almost 100%
77%
13%
Most people have mixed feelings about the financial markets because
The stock market always falls in the long run
They provide means for the average person to become wealthy
They are controlled by government regulators
They can experience violent swings
They can experience violent swings
Which of the following is not mentioned in the textbook is one of its three goals
Showing the way in which the possibilities of today’s economy are expanding
Promoting and understanding of markets
Teaching how to successfully invest money in the stock market
Presenting the basic tools of economics
Teaching how to successfully invest money in the stock market
The textbook says that which the following is among the key forces shaping today’s economy
Social networking
The evolution of financial markets
Socialism
Accounting scandals
The evolution of financial markets
Supposed the government decides to eliminate some, but not all of the rules that govern how investment banks conduct their business this would be an example of
Central planning
Economic competition
Deregulation
A laissez-faire policy
Deregulation
Gross domestic product is
Not a useful indicator of prosperity
The only indicator of prosperity that economist use
One of many indicators of prosperity, all of monetary nature
One of many indicators, prosperity, some of which are some of which are not
One of many indicators of prosperity, some of which are monetary, and some of which are not
Which of the following does not explain why there are so many disagreements among the economist
In some cases, the controversy is aggravated by political agendas
In some cases, economist have simply not investigated the issue at hand
In some cases, individuals may stand from policy changes
In some cases there isn’t enough data to answer the question
In some cases, economist have simply not investigated the issue at hand
In a market, buyers and sellers
Are in the same place
Compete with one another
Undermine the proper functioning of the economy
Exchange goods and services for money
Exchange goods and services for money
Which of the following gives the best reasons why the possibilities of choices of today’s economy are expanding?
Because they constraints that affect their economy, change every day
Because people are more enlightened today than in the past
Because worldwide population continues to grow
Because laws continue to change more activities legal
Because the constraints that affect the economy change every day
Who competes with whom in a market?
Sellers compete with other sellers buyers are not part of the competition
Buyers compete with other buyers and sellers compete with other sellers
Buyers and sellers compete with each other
Buyers and sellers compete with the government
Buyers compete with other buyers and sellers compete with other sellers
Which of the following cell significant declines between late 2007 and early 2009
House pricing only
Stock prices, housing prices and the US economy
Stock prices and housing prices only
The US economy only
Stock prices, housing prices and the US economy
Which of the following is not a good indicator of prosperity
Environmental quality
The size of the safety net
Results from surveys of happiness
Life expectancy
The size of the safety net
Individuals in a market economy can be both buyers and sellers true false
True
Buyers and sellers who are geographically close to each other are part of the national market true false
False
The law of supply says that higher prices tend to blank the quantity of goods or services blank, assuming no other changes
Decrease supplied
Increase supplied
Increase demand
Decreased demanded
Increase supplied
The demand schedule is a description of the behavior of blank in the market
Goods or services
Labor
Buyers
Sellers
Buyers
Opportunity cost is defined as the value or benefit of the
Equilibrium price
Least valuable item
Most valuable item
Next best alternative
Next best alternative
The way that economist explain it the worker is a blank in the blank market
Buyer labor
Seller labor
Seller job
Buyer job
Seller labor
If at the market price of $10 per lawn, Maya is willing to mow 15 lawns and at the market price of $15 per lawn. Maya is willing to mow 25 lawns. What does Maya supply curve look like?
It’s slopes down to the right
It slopes up and to the right
It is a vertical line
It is a horizontal line
It’s slopes up into the right
In economics satiation means
Eventually, the marginal value of the good consumed decreases
Quantity demanded and quantity supplied rises
The market prices been attained
Eventually, the marginal value of the consumed increases
Eventually, the marginal value of the good consumed to decreases
What would it mean if a demand curve sloped upward into the right?
Quantity demanded in price both can only decrease
Quantity demanded increases as the price increases
Quantity demanded in price both can only increase
Quantity demanded decreases as the price increases
Quantity demanded increases the price increases
One of the biggest benefits of a market-based economy is
Government regulation
The ability to adapt quickly to change
Consumer protection policies
Central planning
The ability to adapt quickly to change
Buying a used textbook from a fellow student is an example of what type of market
Labor
Local
Global
National
Local
What phrase do economics use to describe the assumption that everything else about a situation stays the same allowing only one variable such as price to change
Caveat emptor
Vini vidi vici
Ceteris paribus
E pluribus unum
Ceteris paribus
When you have to give up one opportunity in order to choose another, the value of the opportunity that is not chosen is called the
Choice equilibrium
Opportunity cost
Opportunity price
Forgone value
Opportunity cost
What typically happens when the market price for haircuts rise
Cutting hair would be less profitable
Some hair salons might hire more stylist
Some salons might close
Some stylist would work fewer hours
Some hair salons might hire more stylists
The demand schedule reports the quantity demanded at
The market equilibrium price
The average of all prices
Many different prices
Zero price
Many different prices
The individual quantity demanded is the amount the blank is willing to blank at a given price
Buyer purchase
Seller purchase
Seller sell
Buyer sell
Buyer purchase
A graph plot price versus quantity when price is five dollars quantity is 100 when price is $20. Quantity is 400 a line is drawn from one point of interception to the other graph is pictured above is most likely.
Demand curve because it’s an upward slope
Demand curve because it’s downward slope
Supply curve because it’s an upward slope
Supply curve it’s a downward slope
Supply curve because it’s an upward slope
The law of demand says that the most cases of the lower the price the lower the quantity demanded true false
False
The loft man suggests that most demand curves will be
Curved
Downward sloping
A straight line
Upward sloping
Downward sloping
Access demand generally causes prices to fall true false
False
Excess supply occurs when suppliers prepared to sell more at a certain price than buyers are prepared to purchase true false
True
Left to themselves most markets will tend towards market equilibrium, true false
True
A demand shift is a change in the amount of sellers want to supply at various prices true false
False
Government action can cause a significant market demand shift, true false
True
For most goods and services and increase and income will cause the demand curve to shift to the left true false
False
With inferior goods demand will increase with an increase in income, true false
False
If supply is inelastic, then a demand shift will have a bigger effect on quantity then on price true false
False
Market equilibrium is the point where quantity supplied and blank are equal
Market price
Quantity demanded
Equilibrium supply
Quantity sold
Quantity demanded
The price of which the quantity supply equals quantity demanded is the
equilibrium price
Opportunity cost
Negotiated price
Market price
Equilibrium price
A demand shift effects
Buyers willingness to purchase at the equilibrium price only
Sellers willingness to sell at the equilibrium price only
Sellers willingness to sell a various prices
Buyers willingness to purchase various prices
Buyers willingness to purchase a various prices
Movement along the demand curve means a demand schedule blank in the price blank
Stays the same changes
Stays the same, also stays the same
Changes also changes
Changes stays the same same
Stays the same changes
Luxury good is one whose demand blank is income increases
Rises sharply
Decreases sharply
Does not change
Rises proportionately
Rises sharply
Demand is an elastic if
That a man curve is bowed outward away from the origin
The quantity demand does not change very much, even if the prices change drastically
The quantity demanded changes more or less proportionally with the price
The curve and towards the origin
The quantity demanded not change very much, even if the prices changed drastically
If supplies in elastic, then a demand shift will have a blank effect on blank
Bigger quantity them on price
Bigger price than on quantity
Big, both quantity and price
Smaller price then on quantity
Bigger price than on quantity
How many government causes a man shift to the right?
By increasing taxes
By causing a shift and consumer tastes
By regulating supplies
By requiring consumers to purchase certain products
Requiring consumers to purchase certain products
In the long run, hotel room prices that are falling as a result of excess supply will blank the quantity of hotel room supplied in the market
Decrease
Increase
Stabilize
Destabilize
Decrease
A demand shift to the right generally leads to
Lower prices and lower quantities
Lower prices and higher quantities
Higher prices and higher quantities
Higher prices and lower quantities
Higher prices and higher quantities
What will happen as a result of an increase in demand?
Equilibrium price and quantity both rise
Equilibrium price falls an equilibrium quantity rises
Equilibrium price rises, equilibrium quantity falls
Equilibrium price rises and quantity both fall
Equilibrium price and quantity both rise
What will happen as a result of an increase in supply?
Equilibrium price and quantity both rise
Equilibrium price falls, and equilibrium quantity rises
Equilibrium price and quantity both fall
Equilibrium price rises in equilibrium quantity falls
Equilibrium price falls, and equilibrium quantity rises
Inputs for a business or the goods and services that it sells to its customers true false
False
Revenue was the money that customers pay for the output of the business true false
True
Cost is what a business receives after subtracting expenses from revenue true false
False
The marginal product of labor is the extra amount of output. A firm can generate by adding one or more unit of labor true false.
True
The average product is calculated by dividing total inputs by the number of hours worked to true false
False
Marginal cost is the added expense producing one more unit of output true false
True
Variable costs or short term cost and fix costs or long-term costs true false
True
What is the difference between revenue and cost?
Profit
Output
Input
Production
Profit
What name is given to the process of turning inputs in the outputs of a business will sell to customers
Production
Revenue
Profit maximization
Profit
Production
The hours of work supplied by various types of workers are referred to by an economist as
The marginal product
The business know how
Wage hours
Labor
Labor
If you add too much of anyone input, your business is likely to experience
Accelerated product function
Diminishing marginal cost
Increasing marginal revenue
Diminishing marginal product
Diminishing marginal product
Output divided by the number of hours worked or by the number of workers is called
Average product
Marginal product
Average input
Marginal revenue
Average product
The price per unit of labor times the amount of labor used equals the
Labor input
Labor cost
Marginal cost
Marginal labor
Labor cost
Marginal cost generally rises as
Average cost falls
Quantity produced rises
Quantity produced falls
Average cost rises
Quantity produced rises
Blank is the amount of money accompany receives for selling its product or service
Cost
Profit
Revenue
Average marginal revenue
Revenue
A profit maximizing business will increase production as long as
Average product exceeds marginal price
Marginal revenue, exceeds marginal cost
Marginal price exceeds average product
Marginal cost exceeds marginal revenue
Marginal revenue, exceeds marginal cost
Theodore can make six pizzas in one hour if Theodore labor has a diminishing marginal product what must be true about the number of pizzas that Theodore can produce in three hours
It must be equal to 18
It must be greater than 18
it must be less than 12
It must be less than 18
It must be less than 18
If Sarah can produce 25 muffins for a total cost of 15, but her production process is subject to increasing marginal costs, which of the following can be the total cost of producing 100 muffins
15
60
80
20
80
If June can earn $1500 in revenue from painting two houses how much can she earn in revenue from painting three houses?
Less than $2250
More than $2250
Exactly 4500
Exactly $2250
Exactly $2250
Suppose a local food truck owner occurs a total cost of $200 per month even if he makes Incel no food but that is total cost rises to $202 if he makes and sells one hamburger, which of the following is true
His fixed cost is $200. The marginal cost of the hamburger is two dollars.
Suppose a local food truck representing a small part of an overall very large market can sell 20 hamburgers for 100 total and can sell 30 hamburgers for 150 total which of the following is not true
The marginal revenue for the 20th hamburgers five dollars
The marginal revenue for the 30th hamburgers five dollars
The total revenue for the 20th hamburger is five dollars
The price of the hamburgers five dollars
The total revenue of the 20th hamburger is five dollars
If by selling one or more unit of a good a certain business can increase revenue from $500-$525. What is the marginal revenue in this case?
$25
500
525
Marginal revenue cannot be calculated without knowing the quantity
$25
In 2022 Starbucks had 32.3 billion in revenue and made a gross profit of 21.9 billion what it costs in 2022
10.4 billion
1.4 billion
54.1 billion
27.1 billion
10.4 billion
Imperfect competition all buyers and sellers are price takers true false
True
Imperfect competition, if there are no barriers to entry, only lowest cost, businesses will survive in the long run, true or false
True
A business can escape perfect competition by building a better more innovative, product true false
True
Monopolistic competition is characterized by
A limited number of sellers with a variety of products,
one seller with a variety of products
One seller with a standardized product
A large number of sellers with similar products
A large number of sellers with similar products
And oligopoly occurs when there
Are a large number of sellers in a market producing a variety of products
Are a large number of sellers producing similar products
Is only one seller in market
Only a few sellers in market
Are only a few sellers in the market
Blank collusion can occur when oligopolistic businesses do not directly communicate with each other
Explicit
Implicit
Marginal
Ordinary
Implicit
An example of a barrier to entry is
Lack of key resource
Plentiful natural resources
Low cost resources
Helpful government regulation
Lack of key resources
The four main types of market structure are
Land labor, capital and business know how
Perfect competition, monopolistic, competition, oligopoly, and monopoly
Marginal cost of marginal revenue, product and price
Average average cost long run short run
Perfect competition, monopolistic competition oligopoly monopoly
The profit maximizing rule says that any seller role expand output up to the point where
Marginal revenue is less than the price
Marginal revenue equals marginal cost
Marginal revenue equals price
Marginal cost equals price
Marginal revenue equals marginal cost
The easiest way to have a monopoly today is
To have the government protect you
Own everything in your market
Have a strong business plan
To be in socialistic country
To have the government protect you
Market power is
Another term for equilibrium
The ability to rise prices above perfectly competitive prices
The balance between average and marginal product
The combination of price and product
The ability to raise prices above perfectly competitive prices
For a given market, a profit maximizing monopolist would always charge blank a firm in perfect competition
Higher price then
A price equal to marginal cost unlike
A price equal to marginal cost just like
A lower price than
A higher price than
If all the restaurants restaurants in a small town, colluded agreed to raise dinner prices this will lead to a loss to society because
Some dinners that could be served would not be served
The restaurant will become too crowded with new customers
Collusion is illegal
The number of dinner serve stay the same, but the buyers face higher prices
Some dinners that could be served would not be served
Imperfect competition P =MC means
Prophet equals marginal cost
Price equals market cost
Price equals marginal cost
Profit equals market cost
Price equals marginal cost
Differentiating ones product from the product of one’s competitor as a way to
Escape, perfect competition
Cause profit to tend towards zero
Become a price taker
Increase the degree of competition
Escape, perfect competition
Most markets meet all of the conditions for perfect competition true false
False
The public sector include state, local governments, as well as the federal government true false
True
Private sector includes privately owned businesses and for-profit divisions of various governments true false
False
The new deal was a government outgrowth of World War II truth false
False
The era of deregulation began as a result of the governments failed response to the oil price shock of 1973 true false
True
An example of command and control approaches public education, true false
True
The new deal was
Legislation passed by the Roosevelt administration
The name of the television game show in the 1930s
A government agency that regulated auto dealerships
The cornerstone of the Kennedy administration
Legislation passed by the Roosevelt administration
The new deal was
Legislation passed by the Roosevelt administration
The name of the television game show in the 1930s
A government agency that regulated auto dealerships
The cornerstone of the Kennedy administration
Legislation passed by the Roosevelt administration
Which of the following was not part of the new deal?
Medicare
Federal minimum wage
Unemployment insurance
Social Security
Medicare
The oil price shock of 1973 was caused by
The drawing up of two major US oil wells
A series of earthquakes in Venezuela
The overthrow of the Iranian government by terrorist
Embargo by the organization of petroleum exporting countries OPEC
OPEC
The government government share of employees peaks during the
1970s
1940s
1960s
1930s
1940s
The wage and price control of 1971 was an example of
A mixed approach
A command and control approach
Market-based economics
Free enterprise
A command and control approach
Rent seeking behavior refers to
Companies that spend money on influencing government rather than nonprofit increasing strategies
A transfer of knowledge between private and public sectors
Companies try to increase profit or improving products
Consumer real estate studies on versing buying
Companies that spend money on influencing government than nonprofit increasing strategies
Imposing attack on a market generally hurts
Either buyers or sellers but never both
Both buyers and sellers
Sellers more than buyers
Buyers more than sellers
Both buyers and sellers
The free rider problem can occur when
Government regulates the public transit system
The government tax is a good service
Goods are provided to an individual who receives the benefit, but not pay for it
Welfare programs are not regulated well enough
Public goods are provided to an individual who receives the benefit, but not pay for them
Blank means the government set the rules for market competition
Market regulation
Market dynamics
Government metrics
Market economics
Market regulation
The Uniform Commercial Code governs
Commercial transactions between companies and consumers
What can be broadcast on public Airways?
Commercial transactions between the United States and the foreign countries
International commerce transactions
Commercial transactions between companies and consumers
The securities and exchange commission regulates
The stock market
Auto insurance companies
Non-monetary exchanges like bartering
Security and alarm companies
Stock markets
Which of the following is not a type of externality?
Market externality
Network externality
Positive externality
Negative externality
Market externality
The disadvantages of government intervention include
Incentive problems
Reduced regulation
Lower taxation
Achieving desirable goals
Incentive problems
The unintentional impact that the actions of an individual can have on others is called
The network effect
An externality
A public good
The free rider problem
An externality
When one person’s actions harm others economist say that a blank is present
Negative externality
Market external
Network externality
Antitrust externality
Negative externality
A commanded control approach to government regulation works best when
There is a significant agreement on the goals, but not on the best ways to achieve them
There’s a significant agreement on the goals and the best way to achieve them
There’s a significant disagreement on the goals of government regulation
Markets can and will produce socially desirable economic outcomes
There is a significant agreement on the goals and the best ways to achieve them
