ECON CHPA 1,2,3 Exam 48 Questions with Verified Answers
An American consumer who buys a Ferrari that was produced in Italy is an example of a US... -
... [Show More] CORRECT ANSWER import
Who conducts fiscal policy? - CORRECT ANSWER The executive branch
The nation's legislative body
Congress
What is the process in which workers select specialized tasks to make a product? - CORRECT ANSWER Division of labor
Who conducts monetary policy? - CORRECT ANSWER The country's central bank
Typically an agricultural economy where things are done the same as they have always been done - CORRECT ANSWER Traditional Economy
An economic structure where economic decisions are passed down from government planners where factors of production are owned by the government - CORRECT ANSWER Command economy
An economy where economic decisions are conducted through spontaneous order, factors of production are owned by individuals and businesses supply goods and services based on demand - CORRECT ANSWER Market economy
the social science that seeks to understand the choices people make in using scarce resources to meet their unlimited wants - CORRECT ANSWER economics
A product that is produced in the US and sold abroad is a US - CORRECT ANSWER export
The study of economics is primarily concerned with: - CORRECT ANSWER Making the best use of scarce resources
The role of an assumption in an economic theory is to: - CORRECT ANSWER simplify the theory
The total dollar amount of all final goods and services produce within a country's borders in one year - CORRECT ANSWER gross domestic product
In the circular flow model, households: - CORRECT ANSWER Buy products and sell resources (labor, capital & natural resources)
When economists refer to underground economies, they are talking about: - CORRECT ANSWER Black markets, Employees being paid under the table, Illegal trade
Microeconomics is concerned with: - CORRECT ANSWER The individual units that make up the whole of the economy
A tradeoff between two goods (or services) that could be produced
The maximum combinations of two goods (or services) that can be produced given the economy's available knowledge and factors of production
The efficient use of resources, points beyond the PPF are unattainable and points inside the PPF are inefficient - CORRECT ANSWER The Production Possibility Frontier shows
Marginal analysis is used to - CORRECT ANSWER Examine the decisions of incremental change
What is the term that economists use to describe the satisfaction or happiness gained from consuming a product? - CORRECT ANSWER utility
The law of diminishing marginal utility - CORRECT ANSWER Shows the general pattern of higher levels of happiness for the first few units consumed compared to the last few units consumed
How can society increase productivity - CORRECT ANSWER more land, more labor, more capital. innovation
budget constraint - CORRECT ANSWER shows the maximum quantity of two products that a person can purchase based on the price of the products and the person's budget.
In a closed economy (no international trade), how does a society choose where on the PPF to produce? - CORRECT ANSWER Society will choose the combination of the two goods that maximize society's utility
The invisible hand - CORRECT ANSWER Shows how producers and consumers interact in the spontaneous market to create the immense and dynamic economy that we see today
This is a situation where, given fixed factors of production, it is not possible to produce more of one good without decreasing production of another good. - CORRECT ANSWER Productive efficiency
opportunity cost is - CORRECT ANSWER The next best alternative
What was forgone because you pursued something else that was desired
A true cost that economists incorporate into cost models
All around us and is part of daily decision making
Sunk costs - CORRECT ANSWER Should not be considered when making a new decision
Economists assume that donating money to a stranger is not rational and self-interested. - CORRECT ANSWER false
Economists use the term Marginal to describe - CORRECT ANSWER A little more or a little less of something
An increase or decrease in one unit
Incremental changes
What are economists referring to if additional increments of recourses are added to production but the marginal benefit from those additional resources decreases? - CORRECT ANSWER The law of diminishing returns
"The unemployment rate in April 2014 was 6.3% which was better than the unemployment rate was in March, but it still should have been lower" is an example of: - CORRECT ANSWER normative economis
normative economics - CORRECT ANSWER It is the study or presentation of "what ought to be" rather than what actually is.
classical economics - CORRECT ANSWER is widely regarded as the first modern school of economic thought
positive economics - CORRECT ANSWER Most economists today focus on positive economic analysis, which uses what is and what has been occurring in an economy as the basis for any statements about the future.
"The unemployment rate in April 2014 was 6.3%" is an example of - CORRECT ANSWER positive economics
line shifts when - CORRECT ANSWER supply and demand changes
points shift when - CORRECT ANSWER price itself changes
If there is an increase in Demand, what will happen to equilibrium Price and equilibrium Quantity? - CORRECT ANSWER Equilibrium Price will increase & equilibrium Quantity will increase
the amount of time that you study and how well you perform on the exam is a - CORRECT ANSWER direct relationship
To correct for a surplus, - CORRECT ANSWER The equilibrium price will fall
Quantity demanded will increase and quantity supplied will decrease
Built up inventories will decrease
Supply increases by the exact same proportion that demand increases by - what will happen to equilibrium Price and equilibrium Quantity? - CORRECT ANSWER Equilibrium Price will stay constant & equilibrium Quantity will increase
The relationship between price and quantity demanded is - CORRECT ANSWER Inverse
If there is a decrease in Supply, what will happen to equilibrium Price and equilibrium Quantity? - CORRECT ANSWER Equilibrium Price will increase & equilibrium Quantity will decrease
Price floor - CORRECT ANSWER Is a legally established minimum price that a product is allowed to be sold
To be considered as part of the demand curve for a product, you must - CORRECT ANSWER be willing and able to purchase that item
The purpose of the ceteris paribus assumption used in economic analysis is to - CORRECT ANSWER Restrict the analysis to the effect of a single (or few) economic variables
What are the benefits called when suppliers are willing and able to accept a price lower than equilibrium price but actually receive equilibrium price? - CORRECT ANSWER Producer Surplus
MOney is not a - CORRECT ANSWER factor of production
A shortage takes place - CORRECT ANSWER at a price below eq price [Show Less]