Pa 6603 - 2015 Study Guide – Week 6 – 1

Front 1

What is the name of an exchange rate that is set at a pre-determined value

Back 1

p. 386 fixed exchange rate

Front 2

What is the name of the global banking organization with 180+ member nations

Back 2

The World Bank

Front 3

What is the name of an exchange rate that follows the value of another currency within a narrow band

Back 3

p. 387 pegged exchange rate

Front 4

What is the name of the summary of all economic transactions between one country and all others

Back 4

p. 388 balance of payments

Front 5

What is the name of the record of foreign transactions consisting in large part of goods and services

Back 5

p. 389 current account

Front 6

In computing the balance of trade, are imports counted as debits or credits

Back 6

p. 389 debits

Front 7

What is the name of the record of foreign transactions involving exchanges of assets and extensions of loans

Back 7

p. 390 capital account

Front 8

What is the name of the record of transactions among central banks

Back 8

p. 390 official reserve account

Front 9

The general law of diminishing returns is more specifically known in microeconomics as what

Back 9

p. 400 law of diminishing marginal utility

Front 10

What is the increase in the consumption of one good in response to the increase in price of another good

Back 10

p. 403 substitution effect

Front 11

What is the increase in consumption in response to the increase in real income

Back 11

p. 403 income effect

Front 12

What describes how responsive a consumer is to a change in the price of a product

Back 12

p. 405 price elasticity of demand

Front 13

What type of good is defined by rising demand in response to rising consumer income

Back 13

Luxury goods

Front 14

Does a necessity have higher or lower income elasticity than a luxury

Back 14

p. 413 lower

Front 15

What type of good is defined by falling demand in response to rising consumer income

Back 15

Inferior good

Front 16

The owners of a firm who receive any excess of revenues over costs are called what

Back 16

p. 417 residual claimants

Front 17

What problem typically exists between an employer and an employee

Back 17

p. 418 principal agent problem

Front 18

What is the name of a business owned by an individual

Back 18

p. 418 proprietorship

Front 19

What type of business is owned by a few individuals

Back 19

p. 418 partnership

Front 20

What type of business is owned by its stockholders

Back 20

p. 419 corporation

Front 21

Economic profit is different from accounting profit since it includes what type of implicit cost

Back 21

p. 421 opportunity cost

Front 22

What is the normal profit rate in terms of economic profit

Back 22

p. 421 zero

Front 23

What type of cost does not change with output

Back 23

p. 423 fixed cost

Front 24

What type of cost does change with output

Back 24

p. 423 variable cost

Front 25

What general law postulates that the input of resources increases the output of products at a decreasing rate

Back 25

p. 425 law of diminishing returns

Front 26

Mass production relies upon what principle involving lower unit costs

Back 26

p. 431 economies of scale

Front 27

What type of expenditures as referred to as historical costs

Back 27

p. 435 sunk costs

Front 28

A seller who must accept the price offered by a buyer is known as what

Back 28

p. 440 price taker

Front 29

What type of market is dominated by firms selling an identical product

Back 29

p. 440 price taker market

Front 30

Most firms face a downward sloping demand curve for their products. What are they called

Back 30

p. 441 price searcher market

Front 31

A better term for so-called pure competition is what

Back 31

p. 441 price taker market

Front 32

What products are distinguished from similar products by such characteristics as quality, design, location, or advertising

Back 32

p. 459 differentiated products

Front 33

What type of market features low costs of entry and exit

Back 33

p. 462 contestable market

Front 34

What form of discrimination is common among price searchers

Back 34

p. 465 price discrimination

Front 35

What type of market is characterized by a single seller

Back 35

A monopoly

Front 36

What type of market is characterized by small number of sellers

Back 36

Oligopoly

Front 37

What term describes a conspiracy among firms to fix prices?

Back 37

p. 482 collusion

Front 38

What are the initials of the international cartel that conspires to fix the price of oil?

Back 38

p. 483 OPEC

Front 39

The Department of Justice is unlikely to pursue anti-trust action against what type of monopoly?

Back 39

p. 489 natural monopoly

Front 40

What general name is given to markets involving labor, capital, and raw materials?

Back 40

p. 500 resource markets

Front 41

What term describes the ease with which factors of production can move among alternative uses?

Back 41

p. 509 resource mobility

Front 42

What general type of worker compensation goes beyond mere wages?

Back 42

p. 516 fringe benefits

Front 43

What type of compensation do athletes and entertainers typically aspire to?

Back 43

p. 519 tournament pay

Front 44

What is the term for resources that increase the ability to increase output?

Back 44

p. 532 capital

Front 45

What is the economic term based on the fact that people prefer to get things sooner rather than later?

Back 45

p. 533 positive rate of time preference

Front 46

What increase in the rate of interest does a lender extract due to expected inflation?

Back 46

p. 535 inflationary premium

Front 47

What is the current worth of future income after it is discounted to reflect the positive rate of time preference?

Back 47

p. 536 present value

Front 48

What general type of entitlement is limited to poor people?

Back 48

p. 557 means-tested

Front 49

What situation typically arises when charity meets poverty?

Back 49

p. 559 Samaritan’s dilemma

Front 50

What entitlement is effectively a negative income tax?

Back 50

p. 560 Earned Income Tax Credit