Abeka Economics Test 9

what type of good is a truck used by a florist to deliver flowers?

capital

group that favored a natural economy

physiocrats

if gordon mcconnell's accounting business had expenses equaling $90k and revenues totaling $115k last year, but he could've had a salary of $80k working elsewhere, what was his opportunity cost?

$55,000

states that when the price of a good falls, consumers tend to buy more of that good

income effect

type of good that doesn't last more than three years

nondurable good

type of good directly related to a consumer's income

normal good

type of economic system controlled by a centralized authority

command

type of economic system based upon custom, heredity, and caste

traditional

to what does the free market economy owe its proficiency

property rights, limited government, freedom of enterprise

group of firms that produce similar products or provide similar services

industry

what is the retail clothing industry in a large city an example of?

monopolistic competition

what is the american automobile industry an example of?

oligopoly

which is a non pricing strategy?

advertising

adam smith

invisible hand

carl menger

diamond-water paradox

e. i. du pont

gunpowder entrepreneur

david ricardo

comparative advantage

henry ford

mass production

pierre samuel du pont

physiocracy

study of the choices that individuals and societies make in the production, distribution, and consumption of goods

economics

the four factors of production

natural resources, labor, capital, entrepreneurship

name of adam smith's most famous book

the wealth of nations

list of numbers that compares price with quantity demanded

demand schedule

if firm a can produce 40 coats or 50 shoes with the same resources from which firm b can produce 45 coats or 65 shoes, which firm has the comparative advantage in coats?

firm a

governmental agency that investigates trade practices

federal trade commission

first act implemented in 1890 to regulate monopolistic trusts

sherman act

antitrust act passed in 1914 that addressed practices not addressed in earlier laws

clayton act

three things that mass production is based on

division of labor, standardized parts, automatic conveyance

production of goods in which a country or region has absolute or comparative advantage

geographic specialization

makes possible a better standard of living for everyone in a prosperous society

competition

consumers send these to producers to let them know what goods are wanted at what price

market signals

term that deals with the study of specific components within a major economy

microeconomics

illegal system developed to avoid governmental regulations

black market

exchange of goods in the absence of governmental restrictions or penalties

free trade

tax on imported goods

tariff

amount of satisfaction resulting from a one-unit increase of a product

marginal utility

total amount invested in the production of a good

input

total value of a business minus any liabilities

equity

value of the best alternative that is foregone when a different alternative is taken

opportunity cost

place at which quantity demanded and quantity supplied are equal

equilibrium

forces the consumer to buy certain products before he is able to buy what he really wants

tying contract

total amount of a good produced

output

excess of the total revenue payday buyers for goods over the seller's total expense of producing those goods

profit

total amount of satisfaction received from a particular amount of some good

total utility

t/f one way to improve efficiency is to keep output constant and INCREASE input

false, decrease

t/f when the demand for a good increases, the good's equilibrium price tends to INCREASE

true

t/f if the supply of tennis rackets increased while the demand remained steady, stores would likely INCREASE the prices of rackets

false, decrease

t/f the value of a good varies according to its utility and its SCARCITY

true

t/f ABSOLUTE advantage is the ability of an entity to produce a good or provide a service at an opportunity cost that is lower than that of another producer

false, comparative

t/f the TOTAL cost is the sum cost of all the factors of production used in making goods

true

t/f a NATURAL monopoly occurs when a single firm can fill the demand for a good more efficiently

true

t/f a SERVICE is a tangible item for which people will pay

false, good

t/f a CONSUMER is an individual who provides goods

false, producer

t/f SUPPLY is the relationship between a good's price and the amount that producers are willing to make available

true

t/f PROFICIENCY is the quality of producing effectively with a minimum of waste

false, efficiency

t/f the result of a price ceiling would be called a SHORTAGE

true

t/f a failing business should continue production as long as total revenue exceeds VARIABLE costs

false, fixed

t/f a decrease in the DEMAND for workers is caused by increased wages

true

t/f a ppc bending INWARD signifies that two goods are best produced in moderation with each other

false, outward

t/f a CONSERVATIVE economic philosophy seeks full employment over economic growth and stability

false, liberal

blocked entry to market

monopolies

produce a standardized product

perfect competition

few firms in entire industry

oligopolies

significant entry barriers

oligopolies

large number of firms

monopolistic competition

no close substitutes for firm's products

monopolies

large number of independent buyers and sellers

perfect competition

sole supplier of a good or service

monopolies