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

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


Play button


Play button




Click to flip

30 Cards in this Set

  • Front
  • Back
In economics, productive resources are assumed to be limited. Which is NOT considered a productive resource by economists?

land; labor; capital; money; natural resources;
Scarcity requires that people make _____.
The opportunity cost of something is the _____.
value of the thing you must give up to get it
If John uses all of his resources to produce water, he can produce 1,333 gallons of water per hour. If he uses all of his resources to produce bottles, he can produce 4,000 bottles of water per hour. Measured in bottles per gallon of water, what is John's opportunity cost?
If John uses all of his resources to produce water, he can produce 1,333 gallons of water per hour. If he uses all of his resources to produce bottles, he can produce 4,000 bottles of water per hour. John’s opportunity cost of producing bottles is _____.
Because resources are not equally productive in all activities, as production of a good increases, _____.
most opportunity costs are increasing
In economics, another word for a “factor” is _____.
Mr. Peters thought what was good for him as an individual would be good for all others. What term refers to Mr. Peters’ erroneous belief?
fallacy of composition
Capital resources do NOT include _____.

office buildings; factories; inventories; machines; money;
All points along a production possibilities frontier meet the conditions for _____.
production efficiency only
For allocative efficiency, _____.
marginal costs must equal marginal benefits
The United States is a good example of which economic system?
Which of these is an example of a group under a command economic system?

Europe in the Middle Ages; the aboriginies of Australia; the US; the Inuit of Canada; most Western European countries
Europe in the Middle Ages
The economic rivalry among businesses is called _____.
One of the fundamental principles of economics is that sellers encourage buyers through applying _____.
In a market, the use of money reduces dependence on _____.
Which interaction of buyers and sellers constitutes a market?

desires; assets; voluntary exchanges; comparative advantages; absolute advantages
voluntary exchanges
A market in which the goods offered for sale differ according to who produced them, but with so many buyers and sellers that each has a negligible impact on market price is considered _____.
Which of the following is NOT a feature of the market system?

strong government intervention; flexible economies; profit incentives; entrepreneurial activity; prices set by supply and demand;
strong governmnt intervention
A double coincidence of want _____.
must exist when barter occurs
The ability to produce a good or service using fewer resources than other producers is called _____.
absolute advantage
A producer has a comparative advantage in the production of a good or service if that producer can produce the good or service _____.
at a lower opportunity cost than other producers
The observation that tariffs deny individuals and nations the benefits of greater productivity and a higher standard of living that results from absolute and comparative advantage is an argument for _____.
free trade
A duty or tax levied on foreign imports is called a(n) _____.
Which is NOT considered a non-tariff barrier to trade?

embargoes; import quotas; export subsidies; tax on import; exchange rate controls;
tax on import
The production possibilities curve illustrates that each combination of resources used in production has a(n) _____.
maximum output
The MOST accurate description of when scarcity occurs is _____.
whenever wants are greater than the available supply of resources
Trade barriers are designed to do all of the following EXCEPT _____.

protect infant industries; reduce competition from foreign firms; save jobs in the domestic economy; decrease prices in domestic markets; reduce foreign imports;
decrease prices in domestic markets
What measurement is used to determine a nation’s trade balance?
net exports
What writer first proposed that individuals make decisions that benefit the larger society by acting in ways that serve their own self-interest?
Adam Smith