Econ test part 2

Scarcity always exists because

There is not enough of all goods and services to satisfy everyone's wants and needs

What is an example of market

A yard sale, farmer's market, eBay, Kroger supermarket

What are examples that involve a trade-off

Buying a new car Going to college Watching a football game on Saturday Taking a nap

A company's fleet of trucks represent which kind of factor of production

Capital

True or False: an economic system refers to what kind of technology and labor will be used to generate economic growth

False

True or false: a command economy allows for the most individual liberty when making economic decisions?

False

True or false: in the circular-flow diagram, the factors of production (resources) flow from the firms to the households.

False

True or false: rational self-interest and selfishness are synonymous

False

Describe transitional economy

It's a system that is moving from a command economy to a move market economy

What is an example of a sunk cost

Losing two tickets to the ballet before you could attend

Difference between microeconomics and macroeconomics

Microeconomics is the study of individuals and business decisions, while macroeconomics looks at the decisions of countries and governments.

An opportunity cost is the value of the

Next best alternative

What are 2 criticisms of American capitalism

No government protection of property rights No public goods

3 disadvantages of communism

Resources are wasted Few individual freedoms Government leaders have higher rates of corruption

What is the primary problem addressed by economics?

Scarcity

Entrepreneurship refers to the ability to

Start new businesses, introduce new products and processes, and improve management techniques

A rational decision-maker will make a change only when the following condition occurs

The expected marginal benefit exceeds the expected marginal cost

True or false: North Korea is an example of a command (communists) economy

True

True or false: a trade-off is the exchange of one thing for another?

True

True or false: every economic decision has an opportunity cost

True

True or false: in pure capitalism, there is no government involvement in the economy

True

True or false: in the market economy prices coordinate the interaction between buyers and sellers

True

True or false: sunk costs are irrelevant in economic decision-making

True

True or false: the United States is an example of mixed economy?

True

Trade-offs are required because wants are unlimited and resources are

scarce

Economics is the study of how

society manages its scarce resources