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Terms in this set (65)
What type of economy is an economic system in which private businesses can operate freely with minimal state control?
If a society decides to produce consumer goods from its available resources, it is answering the basic economic question,
What to produce?
Mark wants to sell his condo. Jack and Nick are two prospective buyers. Jack is willing to pay the amount quoted by Mark, while Nick is unable to pay such a high price for the condo. Because Jack is able to pay the asking price, Mark sells his condo to Jack. In which type of economy does this transaction take place?
Which factor determines who a society will produce goods and services for?
The economic system in the society.
Some of the money that people deposit into a bank eventually becomes and injection into the economy when the bank
Which rights are necessary for entrepreneurs to obtain credit and capital?
People who want to obtain _____ from financial institution can use their _____ rights to do so.
A communist country decides to give its people more economic freedom in an attempt to improve its failure, what outcome is a government most likely worry about in this case?
People will want more political freedom
Mark is an excellent cook. He does not have any formal training but learned to cook by following the recipes of several famous chefs and his mom. Every weekend, he invites friends over for dinner so he can try new dishes and get honest feedback from his friends. Mark wants to start his own restaurant someday because he thinks he would be successful and become wealthy. Which of Adam Smith's ideas made Mark think of starting a restaurant?
The price of mangoes is currently $5.00 per pound. At this price, producers are supplying 4,000 pounds of mangoes. Point C on the graph shows the current equilibrium price and quantity. To which point will the equilibrium shift if the demand increases suddenly because of a non-price determinant of demand?
This graph shows the demand and supply of a a particular brand of shampoo in the market. Which point on the graph indicates a surplus production of shampoo?
Which statements are true according to the law of supply?
- A decrease in price leads to a decrease in supply.
- An increase in price leads to an increase in supply.
Which phrase describes the substitution effect?
Buying cheaper alternatives when a product becomes expensive.
Which phrase defines a demand schedule?
A table showing the quantity demanded for a good at different prices.
In the construction of a new housing development, which factor of production can be categorized as land?
What are the factors of production?
All the resources used to produce any goods and services.
Approximately 200 people are working on developing a new community just outside a major city. unlike other communities in the area the development will feature Innovative amenities such as solar powered houses bike baths and small locally owned stores. The decision to include these amenities is an example of which factor of production?
(ECONOMICS) A country specializes in agricultural production—in particular, pineapples and coconuts. Last year, its economy was operating efficiently at point A. To capitalize on its favorable climate for growing these fruits, the country decides to build some islands near its coast to use for growing pineapples and coconuts. Which PPC represents the change that results from this decision?
Match each economic scenario with the correct economic term.
Efficiency - A country cannot produce more units of good A without producing fewer units
of good B.
Underutilization - A country can produce more units of good B without reducing the units of good A it produces.
Unattainability - A country wants to produce 10 units of good A and 12 units of good B but
can produce only 5 units of good A and
4 units of good B.
Match each business structure with the scenario that describes it.
1)Lucas and Tyler are best friends. They pool their resources to start a Web-design business. Lucas does the design work, and Tyler brings in the clients. The two friends share the profits as well as the liability for debt or losses.
2)Pluto Candies is a candy manufacturing company. The company issued three million shares and sold them at an opening price of $17. A thousand shareholders came on board, helping the company raise $45 million dollars.
3)Ruth starts a handmade crafts business. She obtains a license and turns her guest room into a workshop. She has an assistant whom she pays a monthly salary. Ruth keeps all the profits and accepts full liability for debt or losses.
3. sole proprietorship
Match each scenario with the economic concept at play.
1.Jamie borrowed $10,000 from the bank. Eventually, the loan payments will total $11,156.
2.Super Soba noodles was doing fine until the arrival of a new brand of noodles, Magic Soba. People stopped buying Super Soba, opting for Magic Soba instead. Gradually, Super Soba had to reduce production as demand decreased.
3.Michael owns a two-story house with a large lawn. He decides to use his house and lawn to run a fitness boot camp
2. consumer sovereignty
3. property rights.
Which two sentences describe characteristics of a partnership?
1. The owners pool their resources to raise capital
2. The business benefits because owners can share responsibilities.
What are 3 critical questions that entrepreneurs need to ask themselves while starting a business?
1. Which location would be the most advantageous for my business?
2. What business structure would best suit my business
3. What is the total cost of ownership of my capital purchases?
Which two sentences describe the characteristics of a corporation?
1. The company is treated as a separate tax entity by law
2. it is possible to raise large amounts of capital by selling company stock.
There are 45 potential workers in this economy. How many people are unemployed?
Choose the point on the graph that shows an excess supply of labor at minimum wage.
The point is on the green dotted line ($18)
What does the market value of a good or service mean?
Current price of a good or service.
What happens in the labor market?
People who are willing and able to work offer their skills to firms for wages.
Choose the point on the graph that shows the equilibrium wage.
33 workers with 12 dollar wages.
the major manufacturing companies in a small, less-developed country have decided to jointly build hospitals in rural areas in the country where they assemble their products. Because of this investment, the GDP of the country will (decrease/Increase/not to be affected). Access to health care services will protect the health of the (companies/workforce) and maintain their (beauty/productivity/sincerity).
Which statement describes an event that would shift the nation's PPC to the right?
Within three months of coming into office, Bertolini passed regulations that made college education available to students from low income families.
How can a nations government invest in human capital?
1. by providing affordable medical care
2. by making education free
3. by facilitating vocational training.
How can international trade agreements lead to economic growth?
1. by creating jobs in the export industries
2. By opening up new markets for domestic goods.
Match each scenario with the government agency it involves.
Dwayne's Company - Occupational Safety and Health Administration
Ryan's new car - Environmental Protection Agency
Lisa - Food and Drug Administration.
Which of the following scenarios would the National Highway Traffic Safety Administration be involved in?
1. Investigating the use of a faulty gearbox in a semitrailer.
2. Modifying the fuel efficiency standards for new cars.
Match each situation with the agency or act that would address it.
Casey applied for a home loan - Fair Credit Reporting Act
Shoppers discover that the breakfast cereal they bought is contaminated - Food and Drug Administration
john is pestered by marketers - Federal Communications Commission.
Which government agency is responsible for protecting the nation's transportation systems to ensure freedom of movement for passengers and commerce?
Transportation Security Administration
What is eminent domain?
The right of a state or government to make public use of a private property.
The economy of a country has shown signs of overheating, such as high inflation rates. The government decides to implement fiscal policy. Which action should it take to achieve the nation's economic goals?
How many workers would producers be willing to employ at a wage of $40 per hour?
Economic stability is a situation in which the economy experiences constant _____ and low ____
Match each situation with the method of government intervention used to rectify it.
1. Contractionary Fiscal Policy
2. Expansionary Fiscal Policy
3. Price Floor
4. Price Ceiling
Which term is defined as the maximum legal price for a good or service?
Jack has to pay ______ tax to the government for his house. This type of tax is _____ tax.
Which statement about progressive taxes is true?
The rate increases as income increases.
the table shows the federal governments budgeted revenue and expenditures from 2001 through 2010. Identify the years in which there was a budget deficit.
2002, 2003, 2005, 2006, 2008, 2010
How does the rate of a proportional tax change with income?
The rate remains the same, even if income increases or decreases.
Cassandra is 80 years old. Last month she broke her leg while biking with her grandchildren. She was admitted to a hospital for surgery. Which card should she show then to get benefits?
A medicare insurance card.
A small community uses cattle as money. A man from the community traded five cows for a plot of farmland. Wich characteristic of his money allowed him to take this transaction?
Who makes decisions regarding changes in the discount rate?
The board of governors
which of the following is a characteristic of money?
Identify the type of money used for each transaction.
Representative Money - Karen Bought a bike
Commodity Money- Luke país for six Apples
Fiat Money Chris bought a bagel
glen found three brands of earbuds that have the specifications he wants. the three pairs of earbuds looked a bit different from each other, but glen knew they would perform similarly. still, each company offered its earbuds at a different price. what economic concept does this situation represent?
John is a producer in a perfectly competitive market structure. Identify the point where he will set his output.
In a perfect competition, there are __ buyers and sellers of __ products, and there is __ entry and exit the market.
Which market structure has a single company or seller in a market with many barriers to entry?
Jack, Jamie, Ronnie, and Stephan own the only computer software manufacturing companies in the country. When Jack increases the price of his product and advertises extensively to promote it, the other three manufacturers immediately increase their prices and launch promotional strategies. What type of market structure do these four companies operate in?
What is Cultural Imperialism?
The imposition of a foreign culture on a nation's policies
Which country has an absolute advantage for producing books?
If the ____ Cost for Producing a particular good is lower for one producer than another, the former producer has _____ for producing the good
2. A comparative advantage
What is absolute advantage?
Having a lower cost of production than other firms or nations.
Recently, people in the United States have started demanding more products from the United Kingdom. What effect will this growing demand for UK products have on the British pound relative to the US dollar?
The pound will appreciate
Which trade agreement or union does not include the United States.
Which three factors decrease because of protectionism?
2. Goodwill with Trade partners
3. Importation of goods
The North America Free-Trade _____ is an agreement among North American countries. The US government benefits from this agreement because it expands the market for American ______ by giving American ______ easy access to North American markets.
Which three of the following are characteristics of an economic union?
1. Common Trade regulations
2. Free movement of capital and labor
3. free movement of goods
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Under perfect competition, what sets the equilibrium price?
two movements that combine to create the law of supply
The money a firm raises is considered which factor of production?