Exam 1 macro
When you think of an arrangement or institution that brings buyers and sellers of a good or a service together, what are you thinking of?
A market
Which of the following describes the two goods that are subsitutes?
As the price of one of the goods increases the demand for the other good increases
In which markets are factors of production, such as labor, capital, natural resources, and entrepreneurail ability traded?
Factor markets
Economics is the study of all the following except
How to eliminate scarcity with new ideas and inventions
Which of the following covers the study of topics such as inflation and unemployment?
Macroeconomics
Fill in the blank: ________ is the study of how households and buisnesses make choices, how they interact in markets, and how the government influences their choices.
Microeconomics
Which of the following statements best defines scarcity?
Scarcity is a situation in which unlimited wants exceed the limited resources availiable to fulfill those wants
What happens if a country produces a combination of goods that uses all of the resources availiable in the economy?
The country is operating on its production possibilites frontier
Which of the following statements is most consistent with the principle about the basis for international trade?
The united states would be better off if it specialized in the production of some goods, and then traded some of them to other countries
In economics, how do rational people behave?
They decide on an action only if its benefits outweigh its cost
Fill in the blanks. The slope of a straight line equals the change in value on the ____ axis ____ by the change in the value on the other axis between any two points on the line.
Vertical; divided
Which of the following is NOT among the fundamental economic questions taht every society must solve?
What goods and services will be exchanged
Which of the following would not shift the demand curve for a good or service?
a change in the price of the good or service
Which of the following is the correct definition of demand curve?
a curve that shows the relationship between the price of a product and the quanitity of the product demanded
Which of the following is the textbook's definition of a supply curve?
a curve that shows the relationship between the price of a product and the quantity of the product supplied
What is an inferior good?
a good for which demand decreases as income rises
what is a normal good?
a good for which demand increases as income rises
What type of assessment is one in which a person's values and political views form part of that assessment?
a normative assessment
Which of the following is the correct definition of demand schedule?
a table showing the relationship between the price of the product and the quantity of the product demand
which of the following is the textbook's definition of a supply schedule?
a table that shows the relationship between the price of a product and the quantity of the product supplied
which of the following is consistent with the law of supply
an increase in price causes an increase in the quantity supplied, and a decrease in price causes a decrease in the quantity suppied
Which of the following would result in an increase in the demand for apples iphone 5?
an increase in the price of Samsung's Galaxy, a subsititue for apples iphone 5
If a market system functions well, which of the following is necessary for the enforcement of contracts and property rights?
an independent court system
What is the name given to the development of a new process of making a good?
an invention
In the united states, property rights
are guaranteed by two amendments to the u.s. consitituion
Fill in the blank. In economics, optimal decisions are made ____
at the margin
When the price of one good increases, the demand for another good decreases as a result. The two goods can be regarded as
complements
If a country has a comparative advantage in the production of a good, then that country
has a lower opportunity cost in the production of that good
What is the outcome of enforcing contracts and property rights in a market system?
increased economic activity
What is the term for the highest valued alternative that must be given up to engage in any activity?
opportunity cost
The stock of computers, factory buildings, and machine tools used to produce goods better are known as
physical capital
Absolute advantage is the ability of an individual, firm, or country to
produce more of a good or service than competitors using the same amount of resources
Which of the following refers to markets where goods such as computers or services such as medical treatment are offered?
product markets
What are copyrights designed to do?
protect intellectual property rights
Generally speaking, for a market system to work, individuals must
take risks and act in rational, self-interested ways
A firm's process to produce good and services are called
technology
Human capital is
the accumulated training and skills that workers possess
Which of the following is the correct definition of market demand?
the demand by all the consumers of a given good or service
The term "quantity supplied" refers to
the quantity of a good or service that a firm is willing and able to supply at a given price
Which of the following is critical to the success of a market system?
to allow individuals or firms to have exclusive use of their property