econ

If you choose between two summer jobs, what is the one you do not choose called?

Opportunity cost

What are examples of factors of production that an economist would categorize as land?

Land, labor, and capital

What are examples of physical capital?

chinery, factory, tools, and food products

The most basic economic problem that forces us to make choices is

Scarcity

Education and experience lead to a growth in

Human capital

What does "consumer sovereignty" mean in a free market economy?

By what they buy

What is the best description of the economy of the United States?

Free market

When the government provides a safety net, which economic goal is it meeting?

Economic security

Unlike a free market system, a centrally planned economy.

Discourages innovation

What is the main difference between a mixed economy and a free market economy?

In a mixed economy, there is a greater government involvement.

In a system of voluntary exchange, who makes the final decisions?

Buyers and sellers

Why is legal equality important to the free enterprise system?

Guaranteed all the same people the same legal rights allows everyone to compete in the marketplace

What are the government's three goals as it tries to promote economic strength?

High employment, growth, and stability

Each payday, some of your pay is withheld for Social Security. What happens to this money?

Redistribute to people with disabilities and to the elderly

Why has the federal government passed laws requiring businesses to disclose product information to the public?

To make buyers more knowledgeable and safe

What is an example of the law of demand at work?

Demand for pizza rises when the prices of pizza fall

What does elasticity of demand measure?

It measures how much demand will rise or fall

The price of a popular shoe rises from $28 to $39 a pair. What will happen to demand for the shoe?

It will decrease

Which of these must consumers have in order to have demand for a good?

Desire and ability

Jean needs a certain medicine. Even though the price for the medicine suddenly goes up very much, Jean continues to buy it. Why is Jean's demand for this medicine inelastic?

There aren't substitutions

Both individual and market supply schedules show possible combinations of what two things?

Price and quantity supplied

A hot summer causes demand for ice cream to go up. What happens next?

Ice cream makers raise prices

Which is a government subsidy?

A minimum price for soybeans

Which of the following is the best example of the law of supply?

A paper plate factory makes more plates when prices go up

What costs of running a company do you think is a variable cost rather than a fixed cost?

Raw materials for making goods

According to Adam Smith, what makes producers want to provide the goods people need?

Profit incentive

Excess demand is also known as

Shortage

A maximum price, set by law, that sellers can charge for a good or service is called a

Price ceiling

A minimum price, set by the government, that must be paid for a good or service is called a

Price floor

When quantity demanded in a market is more than the quantity supplied, what occurs?

Shortage

Which is an example of a monopoly?

A company that makes a drug no one else makes

Why are patents granted to pharmaceutical companies?

So the company can make back the money it spent developing the drug

Which is a commodity?

Gasoline

What is price discrimination?

When a company charges a different price to different groups

How are prices & output of goods in a monopoly different from the prices and output of goods in perfect competition?

Low output, high price

How is monopolistic competition different from perfect competition?

Goods are not identical but are similar

Which describes a company using nonprice competition to sell jeans?

The company tells why its jeans are better

When does a group of companies qualify as an oligopoly?

Four firms making 80% of a nation's sodas

Which group of people might be helped by price discrimination in the travel industry?

Senior citizens

What is the purpose of government allowing and regulating a natural monopoly?

To limit waste and maintain fair prices

The fact that money can withstand the wear and tear from being used over and over again is a measure of its

Durability

Divisibility means that money can be easily divided into

Smaller units of value

The difference between representative money and fiat money is that

Representative money can be traded for gold but fiat money can't

Two units of the same type of money must be the same in terms of what they will buy, which is the principle of

Uniformity

Why is portability an important characteristic of money?

So we can carry it with us

What is one banking reform the government made during the Great Depression?

The FDIC was created

What is the difference between how simple and compound interest are paid?

Simple: principle only, compound: principle & interest

How does a bank make most of its profit on its business?

Paying out less interest than it collects on loans