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
