Econ Test One
any place where factors of production are bought and sold is a...
factor market
to answer the HOW to produce question, society should...
find all optimal method of producing goods and services
wlefare programs are designed to address the...
for whom question
if government intervention fails to improve economic outcomes, the result is known as...
government failure
when a price floor is set for a market, quantity supplied will be...
greater than the equilibrium quantity, and price will be greater than the equilibrium price
the primary concern of economics is the study of...
how best to allocate scarce resources among competing uses
given that resources are scarce...
opportunity costs are experienced whenever choices are made
nominal GDP measures changes in...
output and prices
ceteris paribus, which of the following will cause the demand curve for basketballs to shift to the left?
parents decide soccer is a better sport for their children than basketball
entrepreneurship refers to...
people who are creators
the essential feature of the market mechanism is...
the price signal for both consumers and producers
which of the following is a goal of businesses?
to maximize profits given resource constraints
what is the opportunity cost of increasing the production of missiles from 2 to 3 in terms of houses?
7.00 houses
the opportunity cost of playing tennis with your friend is...
the next-best alternative use of your time that is forgone
according to the law of demand, a change in _____ causes a movement along the demand curve
the price of the good
which of the following will not cause a shift in the demand curve for a good?
the price of the good itself
which of the following is an example of labor as a factor of production?
the skills and abilities of workers
economists make a distinction between changes in quantity demanded and changes in demand...
to distinguish a movement along a demand curve from a shift of the demand curve
which of the following is not included in U.S. GDP?
toys produced by a U.S. firm located in China
the market mechanism...
uses prices as a means of communication between consumers and producers
for government, most market activity can be explained by the goal of...
welfare maximization
which of the following situations is sufficient to represent current demand for a car?
you have enough money to buy it, and you are willing to spend the money on the car
which of the following is not an example of investment?
a business owner uses his profits to play the lottery and wins
which of the following will not shift the demand curve for natural gas?
a change in the technology used to produce natural gas
GDP is...
a dollar measure of output produced within a nation's borders during a given time period
ceteris paribus, the quantity demanded of a good will decrease in response to...
a higher price for the good
which of the following is not an example of land?
a homebuilder
the most desirable and attainable mix of output for society...
consists of a point on the production curve
the quantity of a good demanded in a given time period increases as the price falls, which is known as...
the law of demand
if per capita GDP were distributed across the United States, each individual would receive...
the market value of final goods and services produced in the U.S. per year divided by the population
which of the following is not a factor of production?
the money hidden in an old basement
suppose during a year an economy produces $10 trillion of consumer goods, $4 trillion of investment goods, $6 trillion in government services, and has $4 trillion exports and $5 trillion of imports. GDP would be...
$19 trillion
scarcity means...
the desire for goods exceeds our capacity to produce them
which of the following explains why economic choices must be made?
the factors of production are scarce
it is not possible for society to produce this combination with current resources and technology, elect the appropriate point
A
society might be able to produce this combination if new resources were discovered but cannot produce it with current resources, select the appropriate point.
A
society is producing some output, but some of the available resources are employed. select the appropriate point.
C
economic growth always results in...
an expansion of production possibilities
which of the following events would cause a rightward shift in the supply curve for automobiles?
an improvement in the technology used to produce automobiles
which of the following is an example of government failure?
an increase in bureaucracy and red tape the fails to improve economic outcomes
ceteris paribus, the demand curve for a good will shift to the right in response to...
an increase in tastes or preferences for the good
which of the following is an example of a negative externality?
an increase in the incidence of cancer due to pollution
economic growth is represented by...
an outward shift of the production possibilities curve
if output exceeds population growth for a country, then...
average living standards will increase
if resources are limited...
choices must be made which involve tradeoffs
a price floor...
creates a market surplus
a price ceiling does all of the following except...
creates excess supply
a demand schedule refers to the combinations of price and quantity that represent the...
desires of consumers
in economics, capital refers to...
goods that can be used to produce other goods
total output includes all the following except...
imports
by definition, progressive tax...
imposes a higher tax rate as income increases
the production possibilities curve shifts outward in response to...
improved technology or more resources or both
according to the law of demand, demand curve...
is downward sloping
which of the following is not a reason why the United States is able to produce such high levels of GDP?
labor-intensive production process
which of the following are available in limited quantity and contribute to the problem of scarcity?
land, labor, capital, and entrepreneurship
ceteris paribus, which of the following will cause the demand for peanut butter to decrease?
many people learn that they are allergic to peanut butter
if the market mechanism causes the economy to arrive at the wrong mix of output, there is...
market failure
pollution is an example of...
market failure
for consumers, most market activity can be explained by the goal of...
maximizing happiness
per capita GDP is the most practical way to...
measure how much output is potentially available to the average person
the value of output produced int eh United States in current prices measures...
nominal GDP
real GDP is a more accurate measure of economic growth than nominal GDP because...
nominal GDP can increase due to an increase in production or prices or both
ceteris paribus, if Korea increases the size of its military, then its production...
of consumer goods will decrease
Country D and Country E both recorded an increase in real GDP of 4 percent per year from 1997 to 2007. During this time, the population for Country D grew at 3 percent per year and the population for Country E grew at 2 percent. Which of the following is true during this period?
per capita GDP increased for both Country D and Country E
which of the following is an example of an externality?
pollution
the essential signal of the market mechanism is...
price
according to the law of demand...
price and quantity demanded are inversely related
a market in which finished goods and services are exchanged is a...
product market
in the united states, government regulation is designed to..
protect labor, consumers, and the environment
ceteris paribus, according to the law of supply, if the price of lawn mowing decreases from $50 per lawn to $45 per lawn then the...
quantity supplied of lawn mowing will decrease
the inflation-adjusted value of final goods and services produced in the United States measures...
real GDP
which of the following is the best measure of an increase in actual output?
real GDP
all points on the production possibilities curve...
represent the use of all available resources
output choices are made necessary with a market because of...
scarcity of resources
the central problem of economics is the...
scarcity of resources relative to human wants
in order to measure what a country produces, we...
summarize the monetary value of output