Economics Q3

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Flatscreen TVs: the technology required for flatscreen TVs production becomes cheaper

Supply increases

The amount of good producers are willing and able to supply at any given price in a given time. Depends on

The state of technology at the time

Because resources are scarce society must make decisions about all of the following except; a. what to produce b. whether scarcity exists or not c. how to produce the selected goods and services d. for whom the goods and services are produced

b. whether scarcity exists or not

From an economic standpoint government intervention is justified

When the market mechanism fails to achieve the optimal mix of output

Suppose during the course of a year an economy produces $11 trillion of consumer goods $3 trillion of investment goods $6 trillion in government services and $3 trillion of exports and $1 trillion of imports for this economy, GDP would be

$22 trillion

Suppose lamps cost consumers $100 and tables cost consumers $250 what contribution does the production of 50 lamps and 75 tables made to GDP

$23,750

If I nation has a GDP of $12500 billion in a population of 200 million what is the nations GDP per capita

$62,500

In order to attain a higher living standards in the long run

A country must devote some of it scarce resources to investment

Ceteris paribus if the price of a digital camera rises then we can expect

A decrease in the quantity demanded of digital camera

GDP is

A dollar measure of output produced during a given time period

The economy but she was efficiency in production at

All points on the PPF line

Ceteris paribus, which of the following is most likely to cause an increase in the demand for boots

An increase in income

Assume Pepsi and Dr Pepper are substitutes, an increase in the price of one will result in

An increase in the demand for the other

All goods and services: the level of income increases for all consumers

Demand increases

Which of the following is not one of the three core economic issues that must be resolved A.how to produce the goods and services we select B.what to produce with unlimited resources C.who should get the goods and services we produce D.what to produce with limited source resources

B.what to produce with unlimited resources

In a market the equilibrium price is determined bye

Both supply and demand

The role of the entrepreneur in an economy is to

Bring the factors of production together and assume the risk of production

Who participates in markets?

Business firms, consumers, and government agencies

A nations GDP is

C plus I plus G plus (X minus M)

Which of the following would advocate a laissez fairs economic policy A. Karl Marx B.John Maynard Keane's C. Adam smith D. Resident Franklin Roosevelt

C. Adam Smith

Which of the following statements refers to public goods

Characterized by joint consumption

Most of the United States GDP is used by

Consumers

Which of the following is most likely to cause an increase in the quantity demanded a perfume

Decrease in the price of perfume

French fries: people become more healthwise and prefer apple wedges instead of french fries

Demand decreases

PS twos:2008 model PS3's are introduced for purchase in the market, and consumers prefer the new game system

Demand decreases

Current model year cars: consumers confidence in the economy improves

Demand increase

What are the three questions that all economies must ask

For whom the goods and services are produced, what goods and services are produced, how to produce the selected goods and services

The total market value of all final goods and services produced within a nation's borders in a given time. Is

GDP

Which of the following are treated differently in computations of GNP as compared with GDP

Goods produced by the US law firms located in foreign countries

Define traditional economic system

Guided by habit, custom, or ritual the system is family centered and is found primarily in small isolated communities. There is very little innovation or change, a gender bias in labor, and I low standard of living

Define labor and give an example

Human effort, teacher

Cell phones: an improvement in Teknowledge he reduces the cost of producing cell phones

Supply increases

Price ceilings are intended to address the problem of

In equity in the distribution of goods and services

Define market system

In the system decisions are made by individuals based on the exchange of trade or what is known as supply and demand. Capitalism is the closest example that we have today

Define Command economic system

In the system one person or group decides all of the economic questions creating a centrally planned economy he/Soviet communism is the closest thing we have had in the modern world

Per capita GDP will rise if GDP

Increases more rapidly than the population increases

Points on the PPF graph that are inefficient are

Inside the PPF curve

Government intervention

Is just fired when the market failure occurs. Subsidies our taxes are implemented in order to move the point of production from point a to point B

bMarket failure implies that the market mechanism

Leads the economy to the wrong mix of output

Define capital and give an example

Means of production, factory or hammer

National income accounting is defined as the

Measurement of aggregate economic activity

Define land and give an example

Natural resources, cornfield

Which determinant of demand changes in the personal computer market as more individuals become interested in surfing the Internet?

Number of buyers

Market failure

Oakhurst when the market does not produce at the optimal mix of output on its own for example on the PPF suppose point B is the optimal mix of an output (on the PPF line) failure occurs at point A (also on the PPF but not the optimal mix) ex. Organ market

Government failure

Occurs when the government intervention either fails to move the market closer to the optimal next-door has no effect at all for example if the Apple makes occurs at point B but the market was producing at a government stepped in and implemented a subsidy to fix it but this move the market to inside the PPF or didn't move at all

You avoid counting the same output more than once in the calculation of GDP includes

Only the value of final goods

Points on the graph that are unattainable are

Points outside the PPF curve

Market mechanism tends to over produce

Private goods

When a surplus exists for a product

Producers reduce the level of output and reduce price

The market mechanism tends to underproduce

Public goods

A shift in demand is defined as a change in the

Quantity demanded at any given price

Suppose you volunteer to help clean up your neighborhood and the only payment you received is the sense of goodwill that develops with your neighbors your efforts cause the GDP of the economy to

Remain unchanged

Suppose a friend claims he is helping the economy by throwing trash on the street rather than in trash cans because the extra expenditures necessary to clean up the streets will increase GDP your friend is

Right GDP will increase

The goal of the business firms in a market economy is to maximize

Rough

Paper: the government introduces environmental restrictions on the dumping of wastes from producing paper

Supply decreases

housing: the cost of lumber increases because the United States restrict the import of lumber from Canada

Supply decreases

If there is a shortage at a given price then

That price is less than the equilibrium price

The invisible hand refers to

The allocation of resources by market forces

A buyer is said to have a demand for a good only when

The buyer is both willing and able to purchase the good at alternative prices

If there are only two airlines that fly between Dallas and New Orleans, what will happen in the market for one airline if the other one goes out of business

The demand curve will shift to the right

Macro economics focuses on the performance of

The entire economy

Tickets to a sporting event go on sale and sell out almost immediately this implies that

The price for the tickets is below the equilibrium price

The goal of the consumer in a market economy is to use their limited income to buy

The set of goods and services that maximizes their utility

Define mixed system

This system combines aspects of the other three and is the system practice by all successful modern economies today

If the economy relies entirely on the market mechanism to answer the what how and for whom question it tends to

Under produce goods that yield external benefits and overproduce those that generate external costs

according to the law of increasing opportunity costs

in order to produce additional units of a particular good it is necesary for a society to sacrifice increasing larger amounts of alternative goods

the basic factors of production inclue

land labor capital and entrepenurship

a production possibilities curve indicates

maximum combinations of goods and services an economy can produce given its available resources and technology

efficiency can be defined as the

maximum output of a good produced from available resources

Given that resources are scarce;

opportunity costs are experienced whenever choices are made

If north korea decreases the size of its military than as long as nothing else changes its

production of non military goods will increase

economic growth would best be represented by a

shift outward of the production possibilites curve

the opportunity cost of studying for an economics test is

the best alternative use of your time

the fundamental problem of economics is

the scarcity of resources relative to human wants


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