Exam One Economic
what production is farmer elise's tractor?
capital
what production is nic's taco truck (the truck itself)?
capital
which phrase do we use to indicate that we are trying to study the relationship between two variables while values of all other variables are held unchaged?
ceteris paribus
in command economies, factors of production are owned by?
collectivelly owned
what economic system is this north korea is country ruled by the dictator Kim Jong-un. All resources in the economy are owned by the state and allocated based on his wishes.
command economy
what are the two kinds of command economies?
communism and socialism
what are the functions of markets from accompanying list?
determine the distribution of goods, decide the types of good produced, allocate resources for production
what is traditional economics?
economic decisions are made on the basis of precedent. it usually serve the needs of small and simple societies
what is command economies?
economic decisions making is centralized and made by the government or citizen groups.
what should be produced in order to be efficient?
efficency in resources allociation is achieved when no alternative mix of goods and services would make society better off.
for whom should it be produced in order to be efficient?
efficiency in distribution is achieved when the peolple recieve particular goods and services are the ones who place the highest value on them.
how should it be produced in order to be efficient?
efficiency in production is achieved when firms employ the capital, labor, and other inputs that minimize the cost of producing the desired quanity of output.
in production possibilites frontier, the points on the curve are what?
efficient and attainable
what production is nic's taco truck (the idea)?
entrepreneurs
which resource earn profits?
entrepreneurs
what production is aunt sandy's jammin' jellies (the business)?
entrepreneus
What is Scarcity?
exists when supply of something doesn't satisfy everyone's desire for it
fill in the blank, firms receive___ from the goods market.
expeditures on goods and services
what are positive economic?
fact-based,descriptive sides of economics describes the things are in the economy
in product market, what does the consumers (business) buy?
final goods and services
in product market, what does producers sell?
final goods and services to conumsers
what is socialism?
general asemblies and councils of workers and consumers make economic decisions, sometimes with the government oversight.
fill in the blank, through the ____, people can acquire what they want without needing the ____ necessary to produce all the products they wish to consume.
good and service market, and knowledge and skills
what are transfer payments?
government payments that are not made in exchange for goods or services like grants, social security, welfare, and subsidues
in market economies, who owns the factors of production?
households
the three fundamental questions are not concerned with:
how well the goods are made
why is the restriction of ceteris paribus so useful in economic analysis?
if every varibale is allowed to change, it would be impossible to isolate the impact of one variable of another
what are some examples of product market?
imports, exports, government supply goods and services/
what are some examples of firms to market for factors of production to household?
income that bill obtains from consulting job and rent paid by sapling for its offcie building.
please label the circular flow diagram: resource market to households
jacks makes a decent living prunning beanstalks
what production is adrianne, a server at sonic drive in?
labor
what production is your coworkers?
labor
what production is your favorite bartender?
labor
what are some examples of households to markets for factors of production to firms?
labor that larry provides intel as an engineer and the long hours that Mot, hairstylist, works at a futuristic hair salon
in factor market, business buy what?
labor, resources, equipment they need to produce their products
what production is lake Balboa?
land
what production is ore?
land
what production is the rio grande?
land
what is communism?
legislators from a single political party determine production levels and wages. no private firms because everything is owned and operated by the government
microeconomics or macroeconmics, increased consumer spreading cuases the rate of inflation to rise
macroeconomics
microeconomics or macroeconomics, as a result a servere recession, the total output, or gross domestic product, of a nation falls by 4 percent
macroeconomics
microeconomics or marcoeconomics, increased consumer speanding causes the national unemployment rate to fall
macroeconomics
what economic system is Australia's economy is marked by the private ownership of resources, along with prices directing their allocation?
market economy
what are the goals of makert participants in government?
maximize general welfare of society
what are the goals of market participants in consumers?
maximize happiness or satisfication from goods and services
what are the goals of market participants in business?
maximize profits
please label the circular flow diagram: households to product market
michelle buys a toaster to make toast each morning
microeconomics or macroeconomics, optimisim about future car sales leads general motors to hire auto workers.
micreconomics
microeconomics or macroeconomics, robotic technology reduces the demand for auto workers.
micreconomics
microeconomics or macroeconomics, a tax on tires increase the price of tires paid by car owners.
microeconomics
what are some examples of households to market to firms?
money paid fo rlunch at a school cafeteria and the 100 a mobile privder recieves from one of its customers each month
are lotteries efficient?
no, they are inefficent
what is one weakness of market economies?
people who value a good the most are unable to afford it
in production possibilites froniter, the points below the curve are what?
possible but are inefficient, not all sources are being used.
in market economies, low prices lead firms to what?
produce less and consumers to consume more
in market economies, high prices lead firms to what?
produce more and consumers to consume less
what makes up product market?
producers and consumers of goods and services in economy
what are the goals of market participants in foreign participants?
purse same goals as consumers, producers, and government agencies
fill in the blank., factor markets provide ____ to households.
rent, wages, interest, and profit
what is land?
represent the earth and everything drawn from it, includes water, minerals, plants, and anomals.
what is normative statements?
say something about how the world ought to be
what is postivie statements?
say something that describes how the world currently is
what are the 4 firm?
sole proprietorship, partnership, corporation, limited liability company
what best explains the shape of the production possibility frontier in the graph?
some resources used to produce one of the good are not as productive when they are used to produce the other good
please label the circular flow diagram: business to resource market.
super dollar mart buys a lot on which to build their next store.
fill in the blank, there is a flow of __ taxes from both households and firms
taxes
what is demand?
the ability and willingest to buy specific quanities of good at alterative prices in a given time peroid. only exists if someone is both willing and able to pay for a good
what are factors of production?
the building blocks of goods services, including land, labor, capital, entrepreneruship
what is capital?
the manufactured goods used produce other goods or services includes construction equpiment, factories, trucks, sewing machines, chocolate molds.
what is labor?
the physical and mental contribution of people to the production process, includes the work of any employee of any company
What is economics?
the study of decision making under condition of scarity
What is microeconomics?
the study of scarcity and choice at the levels of the individual decision markers includes individuals, households
What is macroeconomics?
the study of the economy as a whole
what is economy?
the system society uses to coordinate productive activites
what is opportunity cost?
the value of the next best alternative that is forgone when a choice is made
what is entrepreneurship?
the willingness and ability to take risk, initiate productive activities, innovate, and organize the other factors of production to provide goods and services
which statement or statements are true of all households?
they consume goods, services, or both
which statement or statements are true of all firms?
they sell good, services, or both. they produce goods, services, or both
what economic system is the economy of a small village in the amazon rainforest is based on past methods of production and tradition?
traditional economy
fill in the blank, governments supply ____ to both households and firms.
transfers
what is normative economics?
type of economics that deals with judgement about the way things should be.
what are the outcomes of efficent?
usually not fair or equitable
in the production possibilities frontier, the points above the curve are what?
usually not possible, untainable
are auctions efficient?
yes
please label the circular flow diagram: product market to businesses
JC nickel has a record quarter selling blaack trenchcoats
what are some example of firms, amrket for goods and services to households?
a bike bought from a local walmart and a laptop sold b y amazon is a lighting deal
what is the production possibilites frontier?
a model that shows all efficient alternative combinations of two goods that can be produced in an economy within a givien time period
what is a household?
a person or group of people living together and sharing incomes
fill in the blank, business ____ and _____, whereas households____and _____.
buy resources, sell products, buy products , sell resources
what makes up factor market?
buyers and sellers of factors of production in economy
what are the three fundamental economic questions?
1. what should be produced? 2. how should it. be produced? 3. for whom should it be produced?
which of the following is the best definition of the opportunity cost of a decision?
benefits from the best foregone alternative
where does economic growth come from?
advances knowledge or technology and increases in the availability of resources
what is mixed economy?
an economic system with characterstics of all three of these types of economics
how is efficency achieved?
an economy when firms individually purse efficiency
what is economic growth?
an increase in the maximum amount of output an economy can produce over a period of time
what is firm?
any enterprise that employs factors of production and sells goods or services
what is factor market?
any place where factors of production (land, labor, capital, and entrepreneurship) are bought and sold
what is product market?
any where finished goods and services (products) are brought and sold.
think about scarcity in terms of the economic way of thinking, why does scarcity exist?
because people virtually have unlimited wants and because the earth has limited supply of land, labor, capital, and entrepreneurial ability
