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83 Cards in this Set

  • Front
  • Back

___________ is a keyword in the study of economics

scarcity

An ________________________ is distinguished by decentralization of most economic decisions

exchange or marketing economy

In a _____________ economic system, capital goods are owned and used primarily by individuals and firms in the economy.

free-enterprise

A _____________________ depends largely on the operation of markets to prevent the development of unbalanced production.

free-enterprise economy

Consumer demand ________ determines incomes to the various factor of production.

indirectly

_______________ is the process of allocating limited means in an effort to satisfy unlimited wants

economizing

A _________ can serve as an economic model

diagram

The ____________________ serves as a rationing mechanism in a market economy.

price system

______ help to determine incomes in the U.S. economy

Prices

The four factors of production are _____________

land, labor, capital, and entrepreneurship

Without __________ there would be no economic problems

scarcity

Economic decisions are __________ decisions

allocation

In a competitive, free-enterprise economy consumer demand is the principal determinant to __________________________________.

what and how much is produced

A _________________________ relates input factors to output choices

production-possibilities curve

A production possibilities curve shows the _________________ and the ____________ combinations of goods that a society

use of resources and alternative

If a nation is producing a combination of goods inside its production possibilities curve, it is ___________ its resources

underutilizing

A nation's production possibilities curve can be shifted outward by ________________.

technological development

A production possibilities curve will shift outward when ___________________________.

additional resources are found

If existing capital wears out faster than new capital is produced , the PPF will shift ____ over time

in

The process of specialization and exchange is limited by the ____ of the market in which a firm operates

size

Under a __________________________ it is assumed that prices will result in the production of goods that are most needed for the promotion of the general well-being of the people

system of free enterprise

One of the functions of price in a capitalistic economy is the _____________________________.

allocation of the factors of production

To abandon prices as a method of directing production requires the ___________________.

substitution of political controls

A _____________ is one that possesses utility but has no price

free good

_______________ is the study of the problems and issues associated with the individual, the firm, the allocation of goods and services, and the markets for goods and services.

Microeconomics

An ___________________ is one which is scarce, useful, transferable, and material.

economic good

In a _________________, buyers and sellers are considered rational when they attempt to maximize their own self interest

market economy

___________________ constitute the most important set of factors determining the market price of a commodity

supply and demand

When a demand curve has been plotted and drawn, it usually slopes ________________.

downward to the right

With an increase in supply, the supply curve shifts to the _______.

right

_____ is an expression of exchange value in terms of money

Price

Whenever buyers will purchase more or less at a given price a shift in demands _________

occurs

It is possible for a change in the price of one good to lead to a change in __________________.

the demand for another good

An increase in demand will tend to increase both ________ and ___________________.

the price and the amount of the commodity exchanged

Under competitive conditions, price is established at that point where ________________

demand and supply are in equilibrium

An equilibrium price results in the _____________.

"clearing of the market"

The law of supply states that as the price of aa good increases producers will ________________

offer more of it for sale

At equilibrium price there are ________________ in the market

no shortage or surpluses

In ________________________, prices cannot stay above or below the equilibrium point for a long period

competitive markets

A surplus in a competitive market indicates ____________________

prices are too high

If a decrease in the price of good A cause an increase in the demand for good B, then ___________________.

A and B must be complements

A leftward shift in a supply curve represents a _________________

decrease in supply

If suppliers expect an increase in price, they will _______________________

reduce the current supply of a good

If supply increases and demand decreases, then _____________________ will fall

equilibrium price

As the real wage increases, the opportunity cost of not working outside the home _____________

increases

Personal income in the US is primarily determined by _____________________

selling labor services

The fastest-growing component of US personal consumption is _________________

services

Household production still exists because it often requires ________________________ than market production does

fewer specialized resources

The ___________ is the least common form of business organization in the US

partnership

One important role of government in the economy is to ___________________ and ________________

safeguard private property and enforce contracts

When externalities are present, market prices ________________ all the social costs or benefits of the activity

do not reflect

Federal individual income taxes illustrate the ___________________ of taxation

ability-to-pay principle

Import restrictions usually ________ domestic producers at the expense of domestic consumers

benefit

Since prosperity usually follows depressions, it is __________________ that depressions cause prosperity

not evident

Today economists are __________________ that the study of economics should be limited to the realm of positive economics

not in universal agreement




*fallacy of composition*

________________ is concerned with value judgements regarding what economic policy ought to be

normative economics

______________ is a study of aggregates in the economy

macoeconomics

When the entire production possibilities curve shifts inward, the economy is ____________

declining

The opportunity cost of a choice is defined as the _________________________

value of the best alternative choices

In a ___________________, the government is the dominant mechanism for rationing goods and services

market economy

Probably the main characteristic of supply curves is that...

they generally slope from left to right

Anytime the market price moves away from the equilibrium position to a lower price, market action will tend to force it ___________ its original equilibrium position

towards

The quantity demanded of a good or service varies _________ with the change in price

inversely

A change in quantity demand occurs whenever the consumers will purchase more because of a _______ in price

decrease

A demand curve shows the graphic relationship between the ____________ and ___________

price of a good and quantity

An increase in the price of a good will cause a ____________ in the demand for its substitute

increase

The determinants of supply are ______________ related to the determinants of demand

not closely

If the price of pork is above its equilibrium price there will be a ____________________ of pork

surplus increase

Movement along an existing demand curve indicates a _______________________

"change in quantity"

A rightward shift in a demand curve represents a _________________ in demand

increase

As the price of ballpoint pens increases, the demand for felt-tip pens can be expected to ___________

increase

If demand decreases, then quantity supplied will ______________

decrease

If supply increases, then quantity demanded ____________

increases

A decrease in the price of peanut butter will __________ a leftward shift in the supply curve of peanut butter

not cause



*movement, not shift*

An improvement in technology shifts the supply ___

out

If the price of labor increases, employers will hire _______ labor since _______________

less, it is higher priced

An increase in professor's salaries ________ the supply of college education

decreases

If both supply and demand increase, then the change in price is _____________

indeterminate

A price floor set below the equilibrium price will result in a ____________

shortage

The personal income tax is based on the ________________________ principle of taxation

ability to pay

markets are linked by....

money

fallacy of compensation

what is good for you is good for the group

what type of economy deals with basic questions?

All the Above