Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/24

Click to flip

24 Cards in this Set

  • Front
  • Back
The term scarcity in economics refers to the fact that

A. economic wants are limited and resources are abused

B. Even in the richest country some people go hungry

C. No country can produce enough products to satisfy everybody's economic wants

D. It is impossible to produce too much of any particular good or service in a market economy
C. No country can produce enough products to satisfy everybody's economic want
The satisfaction or pleasure one gets from consuming a good or service is

A. price
B. utility
C. consumption
D. preferences
B. Utility
Which expression is another way of saying "marginal cost"?

A. total cost
B. additional cost
C. rational behavior
D. scarcity
B. additional cost
The private ownership of property resources and use of prices to direct and coordinate economic activity is characteristic of

A. a command system
B. a market system
C. communism
D. socialism
B. market system
The economy of Germany would best be classified as

A. a command system
B. socialism
C. pure capitalism
D. a market system
D. a market system
Which is characteristic of the market system?

A. unselfish individuals
B. centralized decision-making
C. free enterprise and choice
D. government ownership of the means of production
C. free enterprise and choice
How do workers typically express self-interest?

A. by minimizing the economic losses of other business firms
B. by maximizing the economic profits of other business firms
C. by seeking the highest price when purchasing a consumer product
D, by seeking jobs with the best combination of wages and benefits
D. by seeking jobs with the best combination of wages and benefits
Which is an example of barter?

A. a person trades a desk for a box of tools
B. a person buys clothes at a used clothing store
C. a gift of tuition money from parents to their children
D. the purchase of stock on the New York Stock Exchange
A. a person trades a desk for a box of tools
A demand curve-

A. shows the relationship between price and quantity supplies
B. indicates the quantity demanded at each price in a series of prices
C. graphs as an upward sloping line
D. shows the relationship between income and spending
B. indicates the quantity demanded at each price in a series of prices
When the price of a product rises, consumers shift their purchases to other products whose prices are now relatively lower. This statement describes:

A. an inferior good
B. the rationing function of prices
C. the substitution effect
D. the income effect
C. the substitution effect
An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction is based on the assumption that:

A. there are many good that are substitutes for bicycles.
B. there are many goods that are complementary to bicycles
C. there are few goods that are substitutes for bicycles
D. bicycles are normal goods
D. bicycles are normal goods
If L and M are complementary goods, and increase in the price of L will result in:

A. an increase in the sales of L
B. no change in either the price or sales of M
C. a decrease in the sales of M
D. an increase in the sales of M
C. a decrease in the sales of M
Which of the following would most likely increase the demand for gasoline?

A. the expectation by consumers that gasoline prices will be higher in the future.
B. the expectation by consumers that gasoline prices will be lower in the future
C. a widespread shift in car ownership from SUC's to hybrid sedans
D. a decrease in the price of public transportation
A. the expectation by consumers that gasoline prices will be higher in the future
If the price of a product increase, we would expect:

A. demand to decrease
B. quantity supplied to increase
C. Supply to decrease
D. Quantity demanded to increase
B. Quantity supplied to increase
Suppose you are given the following data on demand for a product. The price elasticity of demand when price decreases from $9 to $7 is:


Price Q demanded
$10 30
$9 40
$8 50
$7 60
$6 70


A. .63
B. 1.16
C. 1.60
D. 2.27
C. 1.60
Price Q demanded
$4 300
$3 400
$2 500
$1 600

What is the elasticity of demand between the prices of $3 and $2?

A. .22
B. .4
C. .55
D. 1.22
C. .55
The elasticity coefficients of demand are 2.6, .5, 1.4, and .18 for demand schedules D1, D2, D3, and D4. A two percent increase in price will result in an increase in total revenues in the cases of

A. D1 and D3
B. D1 and D4
C. D2 and D4
D. D1, D2 and D3
C. D2 and D4
When the competitive market system does not allocate resources to economically desirable goods, economists say what has occurred?

A. market failure
B. government failures
C. externalities
D. productive inefficiency
A. market failures
Private firms cannot profitably produce a public good because of

A. liability rules and lawsuits
B. inflation and unemployment
C. nonrivalry and nonexcludability
D. positive and negative externalities
C. nonrivalry and nonexcludability
Which is an example of negative externality?

A. an increase in the value of land you own when a nearby development is completed
B. the costs paid by a company to build and automated factory
C. decreased property values in a neighborhood where several houses are burglarized
D. the higher price you pay when you buy a heavily advertised product
C. decrease property values in a neighborhoods where several houses are burglarized
The legal concept of limited liability is important in which of the following types of business organizations/

A. monopolies
B. corporations
C. partnerships
D. sole proprietorships
B. corporations
A person receives a paper asset from a corporation that is a promise from the corporation to repay a loan at a fixed rate of interest. This type of asset is referred to as a:

A. bank loan
B. share
C. stock
D. bond
D. bond
Suppose you own $50,000 of personal property, $5,000 of stock in Gerneral Statics Corporation, a $10,000 savings account, and a $20,000 of govt bonds. In General Statics goes bankrupt , the most you could lose is:

A. $50,000
B. $5,000
C. $35,000
D. $85,000
B. $5,000
Accounting profits are typically

A. greater than economic profits because the former do no take explicit costs into account
B. equal to economic profits because accounting costs include all opportunity costs
C. smaller than economic profits because the former do not take implicit cost into account
D. great thank economic profits because the former do not take implicit costs into account
D. greater than economic profits there former do not take implicit costs into account.