Economics

Which of the following best represents a "supply curve"?

B

Why is it important to remove an increase in prices from the calculation of Real GDP?

Including inflation into the calculation of GDP will overestimate the GDP

Which of the following would be represented by "Z" on a Demand curve?

Quantity

What is the inflation rate for soda if the price was $5 last year and $10 this year?

%100

A small level of inflation is indicative of a growing economy. What inflation rate do most economists recommend?

%2

Assume a nation's Nominal GDP is $20 trillion with an inflation rate of 5%. Find its Real GDP.

19 trillion

Which of the following percentages would be considered "Healthy" inflation during a year?

3%

A "want" is very different than a "need". What is a "want"?

A want is a non-essential thing to life that we desire

Aaron open a bicycle store. Which of the following gives the best example of how Aaron uses the scarce resource of labor?

Aaron hires someone to work the front desk so he can focus on bicycle repairs

When exchanges are taking place between nations with specialized products, what is the result?

Businesses and consumers will benefit more

Real GDP is found by removing the effects of inflation. How is this done mathematically?

By multiplying Nominal GDP by (100/(100+inflation rate))

Which of the following letter best represents where "Market equilibrium" would be on a supply and demand graph?

C

According to the table, which country has a LOWEST comparative advantage in producing timber?

England

GDP is the aggregation of all domestic production. Which of the following formulas correctly represents GDP?

GDP=C+I+G+Net Exports

According to the table, which country has a comparative advantage in producing timber?

Germany

Which of the following statements would be true based upon the Production Possibilities Frontier Curve?

If you make more of Product A then the curve stats you must make less product B

Suppose Italy can make either 1000 statues or 700 bottles of wine. Suppose the US can make either 100 statues or 900 bottles of wine. How should each specialize?

Italy should produce statues and the US should produce wine

Suppose Italy can make either 1000 statues or 700 bottles of wine. Suppose the US can make either 100 statues or 900 bottles of wine. How should each specialize?

Italy should produce statues and the us should produce wine

An inferior good is identified by an increase in demand when there is a decrease in income. For example: Which of the following will occur when Jodi goes to college and has a decrease in income?

Jodi will decrease her food expenditures

In the scenario, which of the following would benefit the grocery store the most?

Mr. Smiths management skills as an employee

The calculation of the CPI is similar to the calculation for inflation. What is the acronym for the calculation of CPI?

NOO

What is the acronym for this formula to find the inflation rate? [(New Price- Original Price)/Original Price] (100)

NOO

Nominal GDP will always be a higher reporting than Real GDP during periods of inflation. Why is this?

Real GDP focuses strictly on adjusted inflation levels

The Law of Increasing Opportunity Costs is the economic principle that states the greater production of one good requires giving up more of another good. How is the represented?

The PPF Curved is bowed outward

What effect would an increase on the factors of production (higher worker wages) have on the quantity of a product in a supply curve?

The curve would shift from the right to the left due to positive impact

Debtors are always helped by inflation. Why?

The money is worth less so they can now pay back less

Both Private Property and Limited Government are integral to a purely Capitalistic economic system? The USA is not a purely Capitalistic economic system. Why?

We have private property but not limited government

Which of the following two goods would most likely experience the greatest effect from the "Law of Increasing Opportunity Costs"?

a business replaces peach orchards with cattle farm

GDP is composed of four components. Which of the following would be considered a component of GDP?

a husband buying a card to give his wife for their anniversary

Which of the following would best describe the concepts of Capitalism?

a system where private owners create a business to sell a product with little government involvement

Inflation is defined as a general increase in the prices for all goods and services. What metaphor illustrates the concept of inflation?

balloon

If one nation uses comparative advantage to produce cattle, while another nation uses comparative advantages to produce timber, what should happen for the benefit of both nations?

both nations should exchange their specialized products

Which of the following statements would be associated with the concepts of Capitalism?

business owners have their own self interests in how their company will make money

Which of the following would fall under the category of private consumption for the GDP?

buying gas for your car

If Mark offered to sell Mr. Wilkins the goats and he declined the offer, what other resources would Mark have to sell in order to raise the necessary capital to keep the farm?

cattle

The Consumer Price Index (CPI) is the tool used to measure inflation. It is calculated through which of the following methods?

census

The Circular Flow Model includes several factors. Which of the following is NOT listed in the Circular Flow Model?

charities

The circular flow model includes several factors. Which of the following is NOT listed in the circular flow model?

charities

Prices above or below market equilibrium are generally called "Market Disequilibrium." Which of the following would NOT cause Market Disequilibrium"?

consumers and produce agree on both price and quantity

Price above or below market equilibrium are generally called "Market disequilibrium" Which of the following would NOT cause market disequilibrium?

consumers and produces agree on both prices and quantity

Most of Western society operates on a Capitalistic economic system. Which of the following is NOT a current Western society with a Capitalistic system?

cuba

Which of the following statements is true about the circular flow model?

economic activity can flow back and forth between households, government, and businesses

At higher prices, suppliers produce more and consumers buy less. Name this effect

excess supply

At higher prices, supplies produce more and consumer buy less. Name this effect

excess supply

Which of the following exists in a Capitalistic system?

free enterprise

Which of the following would fall under the category of net exports for the GDP?

goods traded to and from China

A Census is given out by whom every ten years?

government agencies

Which of the following would NOT fall under the category of net exports for the GDP in the Circular Flow model?

growing wheat in the United States

The CPI looks at the amount of money households spend on different categories of goods. Which of the following options does this include?

housing, food, entertainment, and transportation

When there is a decrease in the supply of a good in the marketplace, what will the business need to do in order to meet the excess demand for the product?

increase the price

The CPI is calculated by comparing the spending levels at the beginning of each year to the end of each year. In this way, the calculation is similar to what?

inflation

All resources are limited. Which of the following is NOT a resource?

interest rates

Businesses buy Factors of Production from households. In which part of GDP would a firm purchasing a Factor of Production be considered?

investment

Market equilibrium maximizes both consumer and producer surplus. This means which of the following for the total benefit for everyone?

it is maximized

Why is Markey Equilibrium unique and important?

it is the only point where supply and demand meet

Which of the following best explains the GDP?

it is the report card for the U.S economy

Households send factors of Production to firms. Which of the following is a factor of production?

management skills

the supply curve is upward -sloping and to the right because firms always seek to do what?

maximize profits

The difference between a want and a need is that a want is not necessary for survival. Things necessary for survival are known as what?

needs

If you are going to start a business, which one of these "Factors of Production" must you consider?

opportunity cost

Consumers with the Consumer Surplus area are willing to do which of the following for a good?

pay more

What are consumers within the consumer surplus area willing to do?

pay more for the good

In a supply curve what variable is represented by the letter "W"?

price

Which of the following would be represented by "W" on a Demand Curve?

price

Which of the following would be represented by "W" on a demand curve?

price

When there is a producer surplus, what is the benefit for the producer?

prices go up

Firms receive expenditures from households. In which part of the GDP would "household purchasing expenditures" be considered?

private consumption

Which statement explains why all societies face "Opportunity cost"?

production is limited by the availability of scarce resources

Consider the cement used for the foundation; the bricks and timber used for the walls; and the shingles used for the roof. All of these fall under what category is making the house?

resources

The "Law of Increasing Opportunity Costs" makes the PPF curve bow outward. This would cause which of the following to the bow of the PPF curve when looking at it?

right

Opportunity cost relies on a company making a choice that requires some level of what?

sacrifice

What is it called when you, or a company, has to give something up in order to make a decision?

sacrifice

Consumer Surplus can be thought of as paying less and obtaining more of a good. How else can we think of Consumer Surplus?

saving more of our income

A substitute in demand means you can choose one or the other. You do not consume them together. Therefore, if the price of a substitute increases, we expect the demand to do what?

shift to the right

What is the chief benefit to using a capitalistic economic system where the government does not interfere with operation of the free market (Supply and Demand)?

society always maximizes its economic surplus and opportunity

GDP is composed of four components. Which of the following is NOT a component of GDP?

tariffs imposed by foreign country

The Circular Flow Model includes government. What do households and firms sent to the government?

tax revenue

The circular flow model includes government. What do household and firms sent to the government?

tax revenue

What influence has the "invisible hand" had in the scenario?

the "invisible hand" has encouraged buyers and sellers to purchase the video game at a higher price

Which of the following statements is true about the Consumer and Producer Surplus Curve?

the curve us based on demand and supply

What effect would "technological improvement" have on the quantity of a product in a supply curve?

the curve would shift from the left to right

In the circular flow model, the government does which of the following?

the government provides services to households

The PPF curve shows a curved, negative relationship between two goods. This means that an increase in the production of one good requires which of the following?

the greater sacrifice of the other good

Which of the following statements would most likely be true according to the scenario?

the higher cost of product(increased wages) will decrease the quantity of chairs being produced

The resource of Management is defined as "direction of Land, Labor, and Capital." Which of the following is likely fall under the resource of "Management"?

the owner of a small business

Which of the following is true when there is a producer surplus?

the producer is below the market equilibrium price

Which of the following examples would NOT experience the "Law of Increasing Opportunity Costs"?

the production of light bulbs and production of dog food by the same company

Answer the following question while assuming 100% efficient utilization of resources: The PPF model can be used to show that with an increase in the production of microchips, what would happen to the production of weaponry by the same company?

the production of weaponry would decrease

When looking at the demand curve, which of the following occurs when demand of a product has a low price?

the quantity of the products increases

In the scenario, which of the following would be a service provided by the government?

the recent construction of the highway

As the demand of a quantity of a product increases, what happens to the price as it shifts to the right on the supply curve?

there is an increase in price

Which of the following is the reason for having substitute products?

to have the option of a different product at a cheaper price

Which of the following is the reason for having a substitute products?

to have to the option of getting a similar product at a cheaper price

In economics, which of the following statements would be true when it comes to scarcity?

wants and needs must balance out depending on availability of resources

Which of these is a need?

water

If the product your business is making are on the Production Possibilities Frontier Curve, then which of the following statements would be true?

your business is operating at 100% efficiency