Unit One

Question 0

Purposeful behavior

Answer 0

Individuals look to increase their utility (pleasure)

Economics realize impulse

Question 1

Opportunity Cost

Answer 1

To obtain one good thing society forgoes the opportunity of getting the next best thing

Question 2

Micro economics

Answer 2

Decisions making of individuals

Question 3

Macro

Answer 3

Performance of the whole economy

Question 4

Aggregate

Answer 4

Collection of specific economic units as if they are one unit

Question 5

Positive economics

Answer 5

What is
Facts and cause/effect
Description theory development and testing

Question 6

Normative economics

Answer 6

What should be

Value judgements and desirability of certain economic aspects

Question 7

Individual Economic problem

Answer 7

Limited realities, unlimited wants

Question 8

Budget line

Answer 8

Schedule or curve showing combinations of two products and how they go up and down
To obtain more of one you must give up the other

Question 9

Society’s economizing problem

Answer 9

Where do we donate our resources?

Question 10

Four factors of production

Answer 10

Land, labor, capital, (entrepreneurial ability)

Question 11

PPC assumes

Answer 11

Full employment of resources, fixed resources and technology, two goods~~consumer goods (direct) and capital goods (efficiency)

Question 12

Why is the PPC concave?

Answer 12

The law of increasing opportunity costs~~economic resources are not adaptable to alternate use

Question 13

How can the PPC move?

Answer 13

Increase of resources, improvement of quality, trade and technology advances

Question 14

Capital goods

Answer 14

Goods to produce other goods IE a factory. Lead to future economic growth

Question 15

Does employment lead to shifts in the PPC?

Answer 15

NO. 4% unemployment is good. The employment moves the point not the curve

Question 16

Marginal benefit in relation to total benefit

Answer 16

The slope of TB

Question 17

Marginal cost

Answer 17

Slope of total cost

Question 18

Direct relationship

Answer 18

Two variables move in the same direction

Question 19

Inverse relationship

Answer 19

Two variables move in opposite directions

Question 20

Economics

Answer 20

Social science examining how individuals and society make optimal choices under conditions of scarcity

Question 21

Markets

Answer 21

Prices and profits lead to incentives

1) efficiency
2) incentives
3) freedom

Question 22

Circular flow

Answer 22

Households to firms~~household gives money to firms in exchange for goods and services
Firms give households rent wages interest and profit in exchange for land labor capital and entrepreunial ability

Question 23

Two aspects of an economic system

Answer 23

1) who runs the factor of production

2) method used to motivate coordinate and direct economic activity

Question 24

Two extremes of economic systems

Answer 24

Command system and laissez faire capitalism

Question 25

Command system

Answer 25

Government runs and owns almost everything with a central plan leading to socialism/communism In reality soviets allowed some private ownerships

Question 26

Laissez faire capitalism

Answer 26

Pure capitalism when gvnmt has very little say and no society has ever done this

Question 27

Market System

Answer 27

Capitalism with a mixed economy and it relies on private property and freedoms Dominant force is the market The result is competition and incentives

Question 28

Private property

Answer 28

Encourages people to cooperate to ensure "mutually agreeable" transactions Facilitates exchange Includes intellectual property rights

Question 29

Freedoms

Answer 29

Freedom of enterprise ensures people can obtain resources | Freedom of choice

Question 30

Market

Answer 30

Institution bringing buyers and sellers together

Question 31

Specialization

Answer 31

Makes use of differences in ability Fosters learning by doing Saves time

Question 32

Geographic specialization

Answer 32

Regional and international specialization

Question 33

Five fundamental questions

Answer 33

1) what goods and services are produced? 2) how are they produced? 3) who gets them? 4) how will the system accommodate change? 5) how will it promote progress?

Question 34

Consumer sovereignty

Answer 34

Crucial to determine the types and quantities of goods produced "Dollar votes"

Question 35

Competition

Answer 35

Eliminates high cost producers

Question 36

Absolute advantage

Answer 36

Country who specializes in one thing | Ends up being irrelevant

Question 37

Comparative advantage

Answer 37

Lower opportunity cost than other producer

Question 38

Terms of trade

Answer 38

Exchange ratio | Depends on world's supply and demand

Question 39

Output problem

Answer 39

Two actors, what can they produce?

Question 40

Input problem

Answer 40

How much time will it take

Question 41

Fallacy of composition

Answer 41

The false notion that what is true for an individual is true for the whole group

Question 42

Product market

Answer 42

A system in which products or bought by households and sold by firms

Question 43

Two insurmountable problems of a command economy

Answer 43

Coordination and incentives

Question 44

For the 20th century what economic ills did people blame on the free marker capitalism?

Answer 44

Inflation recession depression and unemployment

Question 45

What was impressive about lenins Soviet Union

Answer 45

Industrialized a backwards society in a single generation

Question 46

Goals of central planning of the soviet system

Answer 46

Criminalment controlled the economy | Became a military industrial super power

Question 47

What did Oleg gordievsky reveal about the soviet economy

Answer 47

Devoted more than 50% of economy to military

Question 48

AWPA

Answer 48

Alaskanwilderness preservation act

Question 49

OSHA

Answer 49

Occupational safety and health administration | Protected workers

Question 50

Production surplus

Answer 50

Amount the seller is paid less the cost of production

Question 51

How do curved and straight PPCs differ

Answer 51

They do not

Question 52

What problems do economic systems face

Answer 52

How to allocate scarce resources among unlimited wants | How to decide what to produce how to produce and for whom to produce