Econ Exam #1

Front 1

What do we produce? (types of g&s)

Back 1

Capital, government, export, comsumption

Front 2

what are capital g&s

Back 2

goods and services bought by businesses to increase production such as tools, machines, and equipment

Front 3

what are government g&s?

Back 3

g&s bought by the government

Front 4

what are export goods and services

Back 4

g&s made in one country and sold in another

Front 5

what are consumption g&s

Back 5

g&s bought for personal enjoyment

Front 6

4 factors of production

Back 6

land, labor, capital, entreprenuership

Front 7

land

Back 7

natural resources such as trees, plants, animals, water, wind, energy, minerals

Front 8

labor

Back 8

work, time and effort people put into production

Front 9

human capital

Back 9

skills and knowledge humans gain such as education, on the go training, and experience to increase productivity

Front 10

capital is NOT...

Back 10

stocks, money, bonds

Front 11

entreprenuership

Back 11

business owners, organize land labor and capital

Front 12

what is paid for land

Back 12

rent

Front 13

what is paid for labor

Back 13

wages

Front 14

what is paid for capital

Back 14

interest

Front 15

what is paid to entrepreneurs

Back 15

profits

Front 16

what g&s accounts for the most percent of total production and how much

Back 16

consumption g&s by 61% of total production

Front 17

what is functional distribution of income

Back 17

distribution of income between factors of production

Front 18

which factor of production receives the most of the total income and how much

Back 18

labor with 69%

Front 19

personal distribution of income

Back 19

between households

Front 20

richest 20% of households received how much of total personal income

Back 20

51% of total income

Front 21

poorest 20% of households received how much of total personal income

Back 21

3% total personal income

Front 22

world population

Back 22

7 billion

Front 23

the 175 economies/countries are classified into 2 broad categories called

Back 23

advanced economies and developing/emerging economies

Front 24

what are adv economies; how many are there; how many people live in them total; examples

Back 24

economies with the highest standard of living; 29; 1 billion; usa, japan, germany, france, italy, uk, canada

Front 25

what are emerging economies; how many are there; examples

Back 25

until the early 1990s, part of the Soviet Union or
its satellites and today are moving toward market-based economies; 28 in Europe and Asia

Front 26

what are developing economies; how many are there; how many people live in them including emerging economies; examples

Back 26

economies/countries without high standards of living; 118 countries; over 5 billion; Africa, Asia, Middle East, Central and South America, Europe

Front 27

Which type of economies have greater production; by how much in the world's total production and in the us

Back 27

adv economies; 53% of the world's total production; 20% of the US's total production

Front 28

World's lowest 20% receives how much of the world income?; highest 20%?

Back 28

lowest = 2% world income

highest=70& world income

Front 29

what is the circular flow model

Back 29

model of the economy that shows the circular flow of expenditures
and incomes that result from decision makers’ choices, and the way those choices interact to
determine what, how, and for whom goods and services are produced

Front 30

what is a firm

Back 30

an economic unit that organizes the production of goods and services

Front 31

what is a market

Back 31

A market is any arrangement that enables buyers and sellers to get information and to do
business with each other

Front 32

goods market

Back 32

Goods markets are the markets in which goods and services are bought
and sold

Front 33

factor market

Back 33

markets in which factors of production are bought and sold

Front 34

real flow include...and which way on circular flow chart

Back 34

goods, services, factors of production;

inside going counterclockwise

Front 35

money flow includes...and which way on circular flow chart

Back 35

rwip, expenditures on g&s;

outside going clockwise

Front 36

governments three main expenditures categories

Back 36

public goods and
services, social security and welfare payments, and transfers to state and local governments

Front 37

government collects three main taxes:

Back 37

personal income taxes, corporate (business) income taxes, and social
security taxes

Front 38

state/local governments have two main expenditure categories:

Back 38

goods and
services, and welfare benefits

Front 39

state/local governments collect three main taxes:

Back 39

sales taxes, property taxes, and
state income taxes.

Front 40

governments buy goods and services from whom, and through whom

Back 40

buy from firms through goods markets

Front 41

government collects what from households and firms? and households and firms receive what from government

Back 41

collect taxes

receive transfers

Front 42

imports

Back 42

g&s bought from households and firms in other countries

Front 43

exports

Back 43

g&s sold to households and firms in other countries

Front 44

boundary between those combinations of goods and services that can be produced and those that cannot

Back 44

production possibilities frontier

Front 45

Production points beyond the PPF are

Back 45

not attainable

Front 46

Production points on and within the PPF are

Back 46

attainable

Front 47

exchange of giving up one thing to get something else

Back 47

tradeoff

Front 48

getting something without giving up anything; a gift

Back 48

free lunch

Front 49

the best thing given up

Back 49

opportunity cost

Front 50

magnitude of the slope on the ppf measures what

Back 50

opportunity cost of the good on horizontal axis

Front 51

formula for opportunity cost

Back 51

quantity lost/quantity gained

Front 52

bowed out shape of PPF shows

Back 52

increasing opportunity cost

resources are not all equally productive

Front 53

outward shift of PPF means there is an

Back 53

economic growth

Front 54

what can help growth in economy

Back 54

decrease production of consumption goods and services (opportunity cost of economic growth)/accumulating capital;

developing technology

Front 55

specialization in labor results in

Back 55

greater productivity

Front 56

occurs when one
person (or nation) is more productive than another (needs fewer inputs or takes less time to
produce a good or perform a production task)

Back 56

absolute adv

Front 57

A person has a __________________________ in an activity if that person can perform the
activity at a lower opportunity cost than anyone else

Back 57

comparative adv

Front 58

this market has many buyers/sellers that not one buyer/seller can influence the price

Back 58

competitive market

Front 59

the amount that consumers are willing and able to buy during a
given time period at a specified price

Back 59

quantity demanded

Front 60

other things remaining the same, if the price of a good
rises, the quantity demanded of that good decreases; and if the price of a good falls, the quantity
demanded of that good increases.

Back 60

law of demand

Front 61

refers to the entire relationship between the price of the good and
the quantity demanded of the good when all other influences on buying plans remain the same.

Back 61

demand

Front 62

a list of the quantities demanded at each different price when all
other influences on buying plans remains the same

Back 62

demand schedule

Front 63

a graph of the relationship between the quantity demanded of a good
and its price when all other influences on consumers’ planned purchases remain the same.

Back 63

demand curve

Front 64

the sum of the demands of all the buyers in the market

Back 64

market demand

Front 65

When any factor that influences buying plans other than the price of the good changes,
there is a ___________; and the demand curve ____

Back 65

change in demand; shifts

Front 66

5 factors that cause change in demand

Back 66

1. price of related goods (subs, comps)

2. expected future prices

3. income

- expected future income/credit

4. number of buyers

5. preferences

Front 67

rise in the price of a substitute causes _____ in demand for that good

Back 67

increase (rightward shift)

Front 68

fall in the price of a sub causes ____ in demand for that good

Back 68

decrease (leftward shift)

Front 69

rise of price for a complement causes __ in demand for that good

Back 69

decrease

Front 70

fall of price for a complement causes __ in demand for that good

Back 70

increase

Front 71

a higher expected future price for a good does what to current demand and what for future demand?

Back 71

increases current demand

decrease future demand

Front 72

a lower expected future price for a good does what to current demand and what for future demand?

Back 72

decrease current demand

increase future demand

Front 73

a good for which demand increases when income
increases and demand decreases when income decreases

Back 73

a normal good

Front 74

a good for which demand decreases when income increases and demand increases
when income decreases (such as generic goods, instant ramen noodles, canned
meat)

Back 74

inferior good

Front 75

When income is expected to increase in the
future or when credit is easy or inexpensive to get, the demand for some goods ___

Back 75

increases

Front 76

the larger the number of buyers, the ____ the demand

Back 76

larger the demand

Front 77

if people "like" a good, demand ___

Back 77

increases

Front 78

A change in price results in ..., which is ...

Back 78

movement along demand curve which is change in quantity demanded

Front 79

A change in other factors shifts the demand curve, which is

Back 79

change in demand

Front 80

the amount that people are willing and able to sell during a given
time period at a specified price

Back 80

quantity supplied

Front 81

other things remaining the same, if the price of a good rises,
the quantity supplied of that good increases; and if the price of a good falls, the quantity supplied
of that good increases

Back 81

law of supply

Front 82

The law of supply occurs because an increase in the quantity of a good
produced results in an

Back 82

increase in marginal cost

Front 83

the relationship between the quantity supplied and the price of the good
when all other influences on selling plans remain the same.

Back 83

supply

Front 84

list of the quantities supplied at each different price when all other
influences on selling plans remain the same

Back 84

supply schedule

Front 85

a graph of the relationship between the quantity supplied of a good and
its price when all other influences on selling plans remain the same

Back 85

supply curve

Front 86

the sum of the supplies of all the sellers in the market

Back 86

market supply

Front 87

At each
price, add the quantity each seller supplies and the sum is the..

Back 87

market quantity supplied

Front 88

5 factors that change supply

Back 88

1. price of related goods (subs/comps)

2. price of resources and other inputs

3. expected future prices

4. number of sellers

5. productivity

Front 89

price of sub in production increases, supply___

Back 89

decreases

Front 90

price of sub in production decreases, suppy___

Back 90

increases

Front 91

price of comp in production increases, supply___

Back 91

increases

Front 92

price of comp in production decreases, supply__

Back 92

decreases

Front 93

If the price of a resource used to produce
the good rises (input cost rises), the cost of producing the good _____ so the supply of the good _______

Back 93

production cost rises

supply decreases

Front 94

If input costs falls, the production cost ___, so supply ___

Back 94

production cost falls,

supply increases

Front 95

If the price of a good is expected to rise in the future, the current supply of the good ______

Back 95

decreases

Front 96

If the price of a good is expected to fall in the future, the current supply of the good ___________

Back 96

Increases

Front 97

If the number of sellers increases, supply ____-

Back 97

increases

Front 98

output per unit of input is

Back 98

productivity

Front 99

An increase in productivity
lowers costs and ________ supply

Back 99

increases

Front 100

technological advances and increased capital ________ productivity and therefore _____ supply

Back 100

raise; increase

Front 101

A change in price results in a movement along the supply curve, which is

Back 101

change in quantity supplied

Front 102

A change in other factors shifts the supply curve, which is a

Back 102

change in supply

Front 103

the price at which the quantity demanded equals the quantity
supplied.

Back 103

equilibrium price

Front 104

the quantity bought and sold at the equilibrium price

Back 104

equilibrium quantity

Front 105

states “When there is a shortage, the price rises; and when there
is a surplus, the price falls."

Back 105

law of market forces

Front 106

A situation in which the quantity supplied exceeds the
quantity demanded

Back 106

surplus

Front 107

if the price is above equilibrium price, there is a

Back 107

surplus

Front 108

A situation in which the quantity demanded exceeds the
quantity supplied

Back 108

shortage

Front 109

if the price is below equilibrium price there is a

Back 109

shortage