9 week Economics

What is the relationship between scarcity and decision making in economics?

People must make choices on how to use scarce resources to satisfy wants.

What national fiscal policy action would increase personal income for retired workers?

Increase the FICA payroll tax funding Social Security.

What does high unemployment combine with high inflation and a shrinking economy indicate in the business cycle?

We might be entering a Recession.

What is a benefit of the U.S. free enterprise system?

A large variety of choices for consumers.

What is the economic motive for a progressive income tax?

To decrease the income differences in a society.

How do households earn income in the circular flow model?

By providing labor resources to companies.

What is one result of competition in a free enterprise system?

Lower prices for goods.

What characterizes the economy of China compared to the U.S. economy?

Lack of choices and competition.

How is the equilibrium price identified on a graph?

Where the Demand Curve and Supply Curve intersect.

What would cause the price of a sports magazine to decrease?

If the competition lowered their price or offered a free subscription.

How does an increase in price affect the law of demand?

Consumers are less likely to pay or willing to pay.

Which resources fall under the factor of production called land?

Natural gas, water, oil, iron ore, coal.

In a free market society, how is the amount to produce determined?

By Consumer Demand.

Does an increase in productivity result in economic growth?

Yes.

What inflation rate is considered high for a country?

Inflation Rates above 8%.

Which area is both a source of federal revenue and expenditure?

Social Security.

What type of taxes are collected by state and local governments but not by the federal government?

Property Tax and Sales Tax.

What characteristic of the U.S. free enterprise system creates incentives to work, save, and invest?

Our ability to own private property and start our own businesses.

What characterizes the U.S. free enterprise system?

Markets that respond to consumer demand.

What is a basic characteristic of all economic systems regarding distribution?

Distribution of goods and services.

What might cause the demand curve to shift to the left?

An incident causing consumers to buy less of the product.

How do quantity supplied and quantity demanded react to a price increase of a popular item?

Supply will increase and Demand will decrease.

What is opportunity cost?

The product not purchased when deciding to buy something else with a limited budget.

What represents capital needed for a tailoring business?

Weaving Machines and Sewing Machines.

What does the statement 'choices produce costs' signify in Economics?

Choice presents a basic problem in Economics.