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