Economics Q3
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