Economics Test 1

what are two types of goods and services produced are _____.

consumption goods and services and capital goods

if sam has an absolute advantage in growing strawberries and raspberries, she will _______.

be more roductive than daniel

if the USA and Cuba decide to open up in trade. if each country specializes in the good in which it has a comparitive advantage, ______ will gain from that trade because ______.

both countries: consumption possibilites in both Cuba and the USA will lie outside their PPFs

the "money flows" are

Factor incomes, household and government expenditures on goods and services, taxes, and transfers

If the borrower can't afford to keep up the payments and defaults, the borrow is pursing ______.

Self Interest

If the bank forecloses on the delinquent borrower, the bank is pursuing _____.

Self interest

Consider the market for coffee. Suppose the price of a cup of coffee falls. Explain the effect of this event on the quantity of coffee demanded and on the demand for coffee.

The quantity of coffee demanded increases and the demand for coffee is unchanged.

Ceteris Paribus

a Latin phrase that means "all other things held constant"

when you buy a movie ticket, you are buying ______.

a service

For consumers, ski trips and ski jackets are complements. If the price of a ski trip increases, the demand for ski jackets will _______.

decrease, and the demand curve for ski jackets will shift leftward

Economics studies choices that arise from one fact. What is that fact?

everyone has unsatisfied wants

Gustavo graduates from college and his income increases by $20 comma 000. Nothing else changes. Gustavo decreases the quantity of hot dogs and toast that he buys and increases the quantity of gourmet ice cream that he buys. For Gustavo, _______.

gourmet ice cream is a normal good

daniel has a comparative advantage in producing sandwiches if ________.

he produces sandwiches at a lower opportunitiy cost than Sam

expenditure on consumption goods and services flows from ______ through the ______ markets.

households to firms; goods

the factor of production most people supply is ____, and the income these people earn is ______.

labor; a wage

the fator of production ____. and the factor of production ______.

land earns rent: labor earns wages

Globalization has reduced african poverty

macro

the government must cut its budget deficit

macro

apple sells 20 million iphones a month

micro

coffee prices rocket

micro

motor vehicle production in China is growing by 10 percent a year

micro

describe how goods and services are produced in developing ecoomies

most production does not use modern capital intensive technologies but some industries do

The law of demand states that ______, the ______ the price of a good, the smaller is the quantity demanded; and the ______ the price of a good, the greater is the quantity demanded.

other things remaining the same; lower; higher

Suppose a person gets a loan from a bank to buy a new home. The borrower is pursing _____ and the bank is pursuing ______.

self interset; self interest

What is comparative advantage?

the ability to produce a good at a lower opportunity cost than another producer

capital good

the pizza oven at a pizzeria

If the price of a laptop rises, with all other influences on buying plans remaining the same, _______.

the quantity of laptops demanded decreases

8. Demand is _____, when all other influences on buying plans remain the same.

the relationship between the quantity demanded of a good and the price of the good

economic growth is defined as the _______.

the sustained expansion of production possibilities

capital consist of _________.

tools, instruments, machines, buildings, and other items that have been produced in the past and that business now use to produce goods and services.

consumption good

your ipad