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Terms in this set (55)
Who wrote The Wealth of Nations?
Whenever you choose one thing over another, you're making a...
What you give up to add one unit to an activity is known as
The value of the next best alternative that is given up when making a choice
Which of the following is NOT one of the seven principles that guide economic thinking
shortages are temporary
Physical items produced for sale are
Which of the following is NOT one of the factors of production
Utility is defined as
the satisfaction one gains from consuming a product
Quantity is shown on the
A point to the right or "outside" the PPC is
Which type of economic system is based on custom?
What is an example of a factor payment?
Which of the following is one of the three fundamental economic questions?
How are goods and services produced
What type of economic system leaves decisions up to producers/consumers?
The following country would be an example of a command economy
The following leader helped implement a command economy in the Soviet Union
The following term means "let alone" or "hands off"
Which of the following is NOT a characteristic of the American Free Enterprise system?
When someone can produce a good/service using fewer resources they have
What is the medium of exchange that we use to trade for goods/services?
Tariffs are an example of a...
Why do we specialize?
all of the above
when both parties give up something in order to get something
the ability to perform a task at a lower opportunity cost is called
why does trade makes us better off?
it puts goods in the hands of those who value them
The production possibilities curve is
downward sloping left to right
QD and QS stand for
quantity demanded and quantity supplied
The amount of a good/service consumers are willing to buy at prices in a period
the demand curve is
a move ALONG the demand curve is a change in
the law of demand states that
price increases, QD decreases
an example of a substitute to a hot dogs would be
what factor is NOT one of the three that affects consumer spending?
law of diminishing marginal utility
which of the following is NOT a shifter of the demand curve?
the following would cause the demand curve to shift to the left
an increase in the price of a complementary good
and increase in the price of a product will reduce the quantity demanded for that product because
consumers will substitute other products for the one whose price has risen
An economist for a computer company predicts that a rise in consumer incomes will increase the demand for computers. This prediction assumes that
computers are normal goods
a product that is consumed along with another product is called a
the law of supply states that
as price increases, quantity supplied increases
which of the following is not a shifter of supply
changes in tastes and preferences
Cash payment aimed at helping a producer to continue to operate is a
an example of an inelastic good is
to calculate elasticity of demand, you use the following formula
E = % change in QD divided by % change in P
what is the demand elasticity of an energy bar with an 80% change in QD and a 50% change in P
Total revenue is calculated by
price x quantity
Which of the following does NOT influence the elasticity of demand
cost of producing the good
a leftward shift of a supply curve for avocados (a normal good) might be caused by
some avocado farmers leaving the market
Refer to Figure A. At price $20, which of the following would occur?
shortage of 100
Refer to Figure A. What would be the effect of a price floor at $60?
surplus of 100
A steep (almost vertical) line on a graph represents that a product is
According to the law of diminishing marginal utility, which of the following is true when consuming marshmallows?
the additional satisfaction received from consuming extra marshmallows decreases as consumption of a good increases
promotoers of a traveling circus know that if they charged $5 a ticket, 200 people would buy tickets for the circus, and if they charged $2, 500 people would buy tickets. Over this price range, the demand for the tickets for the traveling circus is
the relationship between quantity supplied and price is _________ and the relationship between quantity demanded and price is
a max price set by the gov't to prevent prices from going too high
Assuming Ramen noodles are an inferior good, a decrease in income will shift the
demand curve for ramen noodles to the left
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