quiz 1
Production efficiency is represented by ________ a production possibilities frontier
all points on
Canada is classified by the International Monetary Fund as
an advanced economy
Poland is classified as
an emerging market economy
What is the reason that all economic issues and problems occur
Human wants exceed the resources available to satisfy them.
Consumers regard Dell computers and Apple computers as substitutes. If the price of a Dell computer decreases, the
demand for Apple computers decreases
Normative statements
describe how the world ought to be and depend on people's values and cannot be tested
The most people live in ________ economies and the fewest people live in ________ economies
developing; emerging market
personal distribution of income
distribution of income among households
functional distribution of income
distribution of income among the factors of production
As the circular flow model shows, the factors of production flow from
households to firms through the factor market
human capital describes
human skills, that is, the quality of labor
The statement that "increases in the tax on gasoline increase the price of gasoline" is an example of
positive statement
main influences on selling plans that change supply are
price of related goods, prices of resources, expected future prices, number of sellers, productivity
main influences on buying plans that change demand
price, expected future prices, income, expected future income and credit, number of buyers, preferences
Preferences change when
people become better informed, new goods become available
entrepreneurship
productive resource that organizes labor, land, and capital
demand
relationship between quantity demanded and price of a good
Payments to the factors of production are
rent, wages, interest, and profit or loss
Assume that an association of young workers has lobbied Congress to require that all workers retire once they reach the age of fifty. What impact would this law have on the nation's production possibilities frontier?
The production possibilities frontier would shift inward
economic growth
The sustained expansion of production possibilities
when demand increases, demand curve shifts
rightward
the demand for a good increases, if the price of its substitute
rises
steep slope in a time series graph means the variable is
rising or falling quickly.
The phrase "a change in demand" most directly implies a
shift of the demand curve
time series graph
shows how a variable changes over time.
Which of the following is NOT considered capital?
stocks and bonds that are sold by Pepsico
market demand
sum of the demands of all the buyers in the market
Market demand curves are obtained by
summing the quantities every consumer is willing to buy at each different price
Of the following, the country with the highest average income per day in the world is
the United States
quantity supplied
the amount of a good, service, or resource that people are willing and able to sell
The "quantity demanded" of any good or service is
the amount people are willing and able to buy during a specified time period and at a specified price
When drawing a production possibilities frontier, which of the following is held constant?
the available factors of production and the state of technology
what is a topic studied in macroeconomics
the effect on economic growth if the government raises taxes
If the demand for a good increases when people's incomes increase
the good is a normal good
The downward slope of a demand curve represents
the law of demand
The total amount the federal government has borrowed to make expenditures that exceed tax revenue is called
the national debt
In a production possibilities frontier diagram, the attainable production points are shown as
the points inside and the points on the production possibilities frontier
Which of the following describes the law of demand? When other things remain the same, as
the price of gas falls, the quantity demanded of gas increases
When Ford decides to increase production of hybrid cars, it directly answers the ________ question
what
Scarcity
when human wants exceed the resources available to satisfy them
law of supply
when price of a good increases, the quantity supplied of that good increase. when price of a good decreases, the quantity supplied of that good decrease
A competitive market
has so many buyers and sellers that no one can influence the price
As a factor of production, oil reserves are counted as
land
In the circular flow model, the factor markets are the markets in which
land, labor, capital, and entrepreneurship are bought and sold
when demand decrease, demand curve shifts
leftward
The production possibilities frontier illustrates the
maximum combinations of goods and services that can be produced
Physical capital differences across countries can be seen in the fact that
more advanced economies typically have more sophisticated technology
If x increases and as a result y decreases, then x and y are
negatively related
The Latin term "ceteris paribus" means
"other things remaining the same."
If the quantity of the variable on the y-axis increases by 10 when the quantity of the variable on the x-axis decreases by 2, then the slope of the curve equals
-5
In the United States, the poorest 20 percent of households earn roughly ________ percent of total income
3
Approximately ________ people live in the United States and ________ people live in the world
310 million; 7 billion
scatter diagram
A graph of the value of one variable against the value of another variable
example of capital good
Antonio, the manager of the local Taco Hut, purchases a new deep fryer
________ the owners of the factors of production, while ________ what amounts of those factors to hire
Households are; firms determine
study of economics
Economics studies how we make choices in the face of scarcity
consumption goods and services
Items that are purchased by individuals for their own enjoyment
Which of the following are sources of revenue for state and local governments?
Property taxes, sales taxes, and transfers from the federal government.
Which of the following is NOT classified as an advanced economy
Russia
A change in the quantity of a good that people plan to buy that results from
a change in the price of the good or A Movement along the same demand curve
change in supply
a change in the quantity that suppliers plan to sell when any influence on selling plans other than the price of the good changes
A decrease in the price of a complement in production leads to
a decrease in the supply of the good in question.
Trend refers to
a general tendency for a variable to rise or fall.
inferior good
a good for which the demand decreases if income increases and demand increases if income decreases
normal good
a good for which the demand increases if income increases and demand decreases if income decreases
A real flow in the circular flow diagram is
a household's purchase of a new car, a farmer's use of land to grow corn
An increase in the quantity demanded is shown as
a movement along the demand curve
A statement that "All children should receive free health care" is an example of
a normative statement
example of a consumption good or service
a personal computer purchased in order to play games at home
If the change in y = 10 and the change in x = 3, there is
a positive relationship between y and x.
A market is
any arrangement that brings buyers and sellers together
The production possibilities frontier is the boundary between the
attainable and unattainable combinations of goods and services
The circular flow model shows that goods and services flow from
businesses to households
Which of the following is NOT a function of the federal government?
collecting property taxes
By specializing and trading, a country is able to
consume but not to produce combinations of goods that lie beyond its production possibilities frontier
The largest share of total production in the United States
consumption goods and services
A graph shows the average wage of various demographic groups in 2012. The kind of graph used to show these data would be a
cross-section graph
If there is unemployment in an economy, then the
economy is producing at a point inside the production possibilities frontier.
If two variables are unrelated, their graph is
either a horizontal or a vertical line
the demand for a good decreases, if the price of its substitute
falls
In the circular flow model with the government sector, transfers
flow in the opposite direction as do taxes
The circular flow model is used to show the
flow of expenditures and incomes in the economy
In the circular flow model, consumption goods are bought and sold in the
goods market
In the circular flow model, there are two types of markets: the ________ market and the ________ market
goods; factor
The law of supply states
if the price of a good increases, the quantity supplied increases
A bowed out production possibilities frontier shows
increasing opportunity cost and that resources are not equally productive in all uses
As an economy grows
its PPF shifts outward
factors of production
labor, entrepreneurship, capital, and land
supply
the relationship between the quantity supplied of a good and the price of the good
U.S. exports of goods and services flow to households and firms in ________, and U.S. financial inflows of capital flow to households and firms in ________.
the rest of the world; the United States
The personal distribution of income in the United States shows that
the richest 20 percent of individuals receive approximately 50 percent of total income
Economics
the social science that studies how people make choices to cope with scarcity.
Microeconomics
the study of the choices made by individuals and businesses.
market supply
the sum of the supplies of all sellers in a market
Capital, as a factor of production, refers to
the tools and instruments used to produce other goods and services
when there is a increase in quantity demanded
there is movement down the demand curve
When there is a decrease in quantity demanded
there is movement up the demand curve
Demonstrating how an economic variable changes from one year to the next is best illustrated by a
time-series graph
The majority of the income earned in the United States is paid in
wages
In the circular flow model, which of the following flows in the opposite direction from the flow of factors of production?
wages, rent, interest, and profit