Words

Question 1

(C) principle #1

Answer 1

Choices are necessary because resources are scarce

• money
• time

Question 2

(O) Principle #2

Answer 2

Opportunity cost
The true cost of something is opportunity
-what I must give up for what I want
- all cost are opportunity cost

Question 3

(T) Principle #4

Answer 3

People usually respond to incentives

Question 4

(G)Principle #5

Answer 4

There are gains from trade

Question 5

(eq) Principle #6

Answer 5

Markets move towards equilibrium

-an economic situation is in equilibrium when no individual would be better off doing something different

Question 6

(R) Principle #7

Answer 6

Resources should be used efficiently to achieve society’s goals
-an economy is efficient if it takes all opportunities to make some people better off without making other people worse off

Question 7

(Ef)Principle #8

Answer 7

Markets usually lead to efficiently 
-the invisible hand 
-definition of efficiency 
-some people made better off without making me others worse off 
Market failures

Question 8

(S)Principle #9

Answer 8

When markets don’t achieve efficiently,government intervention
Can improve society’s welfare

Question 9

(I)Principle #10

Answer 9

One persons spending is another persons income

Question 10

GATT

Answer 10

The general agreement on tariffs and trade

Covers international trade in goods

Question 11

WTO

Answer 11

World trade organization

• it is a forum for governments to negotiate trade agreements
• it is a place to settle their trade disputes

Question 12

Trade barriers

Answer 12

Anything that keeps you out of something

Prevents trading

Question 13

Exchange rates

Answer 13

Different currency between countries

Measure of currency in different countries

Question 14

The current account

Answer 14

Book keeping, measuring national wealth

Question 15

Future of trade

Answer 15

Depends on a a lot, factors of production

Can’t predict

Question 16

Marginal analysis

Answer 16

Make decisions that add value

Question 17

Rational behavior

Answer 17

People behave towards their wants and needs

Question 18

Open economy

Answer 18

Economy that trades with other economies

Question 19

Reality

Answer 19

My perception is my reality

Question 20

Paradox

Answer 20

People try to save money during a recession

Affecting the demand

Question 21

Comparative advantage

Answer 21

The ability to produce goods at a lower cost than another producer

Question 22

Absolute advantage

Answer 22

The ability to produce goods with fewer resources than another producer

Question 23

Tariffs

Answer 23

Tax on imports

Question 24

Embargo

Answer 24

Restrictions on imports

Question 25

Quotas

Answer 25

Limits on allowable imports/exports

Question 26

USMCA

Answer 26

United States Mexico agreement

It’s a free trade agreement between those countries

Question 27

NAFTA

Answer 27

Trade pact signed in 1992 any products and services passing thru u.s, Canada, Mexico
Now the called the usmca

Question 28

(M)Principle #3

Answer 28

Marginal analysis

Examining the cost/benefits of an opportunity

Question 29

Imports

Answer 29

Traded goods coming in from other countries

Question 30

Exports

Answer 30

Traded goods going out to other countries

Question 31

Trade/purpose

Answer 31

We trade so we don’t go to war with one another and it makes sense to trade if one can produce certain goods

Question 32

Globalization

Answer 32

Process of ideas ,knowledge, information, goods and services spread around the world

Question 33

Trade deficit

Answer 33

When a country imports exceeds its exports

Question 34

Trade surplus

Answer 34

When a countries exports exceeds its imports