Economic- Final

What is a Market Failure?

markets fail to deliver goods and services and government fixes it

Define Liquidity

How easily your assets, can be turned into a medium of exchange (money)

What is monetary policy?

The control of the supply of money in circulation

What is the Federal Reserve?

The nation's central banking system

The overriding reason as to why households and societies face many decisions is that

resources are scarce

What is a price ceiling?

maximum price sellers are allowed to charge

The phrase, "There is no such thing as a free lunch," means

people face tradeoffs.

The opportunity cost of an item is

what you give up to get that item.

Why do elite athletes leave college to go pro?

they understand that the opportunity cost of college is very high for them.
A rational decisionmaker takes an action if and only if

A rational decisionmaker takes an action if and only if

the marginal benefit of the action is greater than the marginal cost

How much is the shortage caused by the price ceiling?

8

Efficiency means that

society is getting the maximum benefits from its scarce resources.


In this economic system the government makes all economic decisions & owns most of the property.

command

Comparative advantage is based on

opportunity cost

If this economy devotes all of its resources to the production of robots, then it will produce

5 robots and 0 wheat

This force that makes market economies work

demand and supply

What Causes a shift in the Demand

All choices

If the supply increases which way the supply curve goes?

outward


What does a price floor cause?

Surplus

Which is NOT a Factor Affecting Supply?

Consumer Income

Which of the following is not a factor of production?

money

3% unemployment is…

Too Low could lead to Inflation

Where on a production possibilities curve is the economy working at its most efficient levels?

on the production possibilities curve/line

Complementary Goods are goods that…

Are consumed jointly


If the price of Pepsi increases what will happen to the demand for Coke?

Increase

A substitute is:

A good or service that can be used in place of another

A decrease in the price of MARGARINE will cause what to happen to the demand curve for BUTTER?

Shift the curve left

Suppose that scientists find evidence that proves chocolate pudding lowers cholesterol. We would expect to see

an increase in the demand for chocolate pudding.

An inferior good is one that:

As incomes fall we buy more of


Most goods and services in the economy are

private goods (Produced by businesses)

Which is not an example of a public good or service?

Shopping at Walmart

A budget surplus is when ?

revenue exceeds the spending

Definition of recession?

real GDP declines for two consecutive quarters.

Why is GDP not a perfect measure of well-being

All of the above are correct.

Trade can make everybody better off because it

allows people to specialize according to comparative advantage.

When a recession occurs

employment rates decrease.

7% unemployment is...

Too High Possible Recession

As the price level rises, the value of money

falls, and people desire to hold less of it

What is an export?

Exports are goods sold to other countries

What is a sole proprietor?

One person who owns and operates their own business

Which of these are Included in GDP?

A Car from a American Dealership In America.

Of these two products which would be an example of an intermediate good

a computer chip

What is a Partnership?

A legal form of business operation between two or more individuals

What is the formula used to calculate GDP?

C + I + G + (X-N)

What is the Business Cycle?

The alternating periods of expansion and recesssion


What happens during a recession?

falling GDP, rising unemployment

In general, stock can be both good and bad because?

you can profit but also lose all you invest.

What is cyclical unemployment?

Someone is out of work because the economy has slowed

Printing too much money could lead to...

inflammation

What is a market basket when determining Consumer Price Index?

A representative selection of commonly purchased goods

What is import?

Is a good sold in a country that is made in another country

In the long run, the economy of the United States has

steadily grown over time.