Economics

What do consumer tastes, consumer incomes, and the price of substitutes have in common

they are all determinants causing demand to change.

In a certain country goods and services have been produced in much the same way as long as anyone can remember. Occupations have been determined at birth. This country is a

traditional economic system

A market exists

where buyers and sellers voluntarily make exchange

How does an increase in consumer population affect the demand for most products

demand increases

If substitutes are readily available for a product, it has

elastic demand

Firms are buyers in which market of the circular flow model?

factor market

The households are sellers in which market of the circular flow model

factor market

According to the law of demand, when the price of an item goes up, the quantity demanded

falls

Every community must choose how to use its resources. If a community chooses to increase its education expenses by $1.5 million and to decrease its fire protection by the same amount, then this community

has traded off some fire protection in order to have more education

The circular flow model of capitalism illustrates

how households and firms interact through market

The whole supply curve will shift to the left if

labor costs go up

In a market economy, buyers want to pay as ___ a price as possible, and sellers want to receive as ___ a price as possible

low, high

grassland is a country in which there is no government ownership of farms and businesses. People may train for jobs and start businesses as best they can. The government does not usually control prices and wages. Grassland is a

market economic system

Almost all economic systems today are

mixed economies

Which of the following would tend to have an inelastic demand curve?

necessities

In a graph of the demand curve, ___ is usually measured along the vertical axis

price

According to the law of supply, higher prices prompt producers to

produce more

Firms are sellers in which market of the circular flow model

product market

The households are buyers in which market of the circular flow model

product market

All the combinations of goods and services that can be produced in a given time with a fixed amount of resources are called

production possibilities.

When income increases, the demand curve for an item is likely to

shift to the right

Which of the following descriptions best explains the meaning of opportunity cost?

the cost of choosing one alternative over another

Which of the following is most likely to result from a general decline in incomes throughout the community

the demand for pleasure boats will decrease

For society, the opportunity cost of making gasoline from a barred of crude oil is

the heating oil that cannot be produced

Suppose this nation starts with producing all military goods. It then decides to produce a mix of civilian and military goods represented by point B. What represents the cost in military goods given up?

the vertical distance from point A to point x

What is the difference between a shortage and a scarcity

A shortage can be temporary or long-term, but scarcity always exists.

Karl Marx and Friedrich Engels outlined

Communism

With time, which one of the following strategies would be most likely to result in an outward shift in the production possibilities curve of an economy?

Institution of a tax policy encouraging capital investment at the expense of current consumption.

In sketching a supply curve, ___ is measured on the horizontal axis

Quantity

At market equilibrium, there is

a balance in supply and demand

Which of the following is a nonprice determinant of demand

all of the above

Which of the following could be a factor of production?

all of the choices

John as an afternoon and weekend lawn mowing service. He uses it to earn money for school. John is planning to buy an edger to help to do a better and a faster job cutting lawns. This edger would be:

an investment in capital goods

When demand for lumber increases, so does demand for nails. When demand for lumber decreases, there is a decrease in demand for nails. Economists would say lumber and nails are

complementary goods

In a market economy, the decision of what to produce is often determined by

consumer demands