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Terms in this set (62)
Items that are purchased by individuals for their own enjoyment are called
consumption goods and services.
Items bought by individuals to provide personal enjoyment are termed
What would be an example of consumption good?
Jake buys an iPhone.
Which of the following is a consumption good or service?
a personal computer purchased in order to play games at home
What would be an example of consumption service?
Rhiana gets a haircut
The income paid for the use of land is called
The income paid to labor is called
Which factor of production is paid "interest"?
The owners of the resource ________ are paid ________ .
Which factor of production is paid "profit"?
Which of the following is an example of an effort to decrease physical capital differences between an advanced and a developing economy?
American troops build roads in Afghanistan.
Of the following, the country with the highest average income per day in the world is
the United States.
Income equality has
increased within countries but has narrowed across countries.
The world population is approximately ________ people.
Which of the following statements is true?
Income inequality within most countries has increased during the past 20 years.
Income inequality across the entire world has decreased during the past 20 years.
The emerging market economies are
in transition from
production to free markets.
The circular flow model shows the
flow of expenditure and incomes that arise from the households', firms', and governments' decisions.
The circular flow model shows the flow of
expenditure and income throughout the economy.
A money flow in the circular flow diagram is
the government's collection of taxes and Nike's payment of wages to its workers
Which of the following is NOT shown explicitly in the circular flow model?
the legal system
Of the following, the largest single component of U.S. federal government expenditures is spent on
Medicare and Medicaid.
An example of a U.S. export is
a washing machine made in Indiana sold to a buyer in France.
Within the circular flow model, economists define households as
individuals or groups living together.
Goods produced in the United States and sold in other countries are called
An export good is a good produced
in the United States and sold in other countries.
If a product becomes more popular and consumers want more produced, which of the following best describes what happens to move more factors of production into that industry?
Wages, rent, interest, and profit increase in that industry, thereby giving factors the incentive to move to that industry.
People become entrepreneurs because they _______. The income entrepreneurs earn is called _______.
are frustrated with their jobs; profit
The factor of production most people supply is _______, and the income these people earn is _______.
labor; a wage
The income of labor earns ____ percent of total income
Which factor of production earns the highest percentage of total U.S. income? Define that factor of production. What is the income earned by this factor of production called?
labor, which is the work time and work effort that people devote to producing goods and services;
With more job training and more scholarships to poor American students, which special factor of production is likely to grow faster than in the past?
Define the factor of production called capital. Give examples of capital.
Distinguish between the factor of production capital and financial capital.
tools, instruments, machines, buildings, and other items that have been produced in the past and that businesses now use to produce goods and services
Examples of capital include all of the following except _______.
Financial capital includes _______.
money, stocks, and bonds, which are not capital because they are not used to produce goods and services
California added construction and manufacturing jobs.
California added 25,000 jobs in March, particularly in construction and manufacturing. Construction jobs showed the most growth.
Source: Los Angeles Times, April 19, 2019
How you would expect these facts to influence what, how, and for whom goods and services are produced in the United States?
The what goods and services produced are _______ and how they are produced is _______.
the new construction goods and manufactured goods;
by employing more labor
For whom the goods and services are produced is determined by _______.
the income earned by the newly employed workers
Why you can get a free college education in Germany but not in California
Even American students can get a free college degree in Germany, where high taxes pay for colleges. Despite college being free, fewer students in Germany earn college degrees than in the United States and more enter vocational apprenticeships.
Los Angeles Times, October 29, 2015
If California adopted the German model of higher education, how would that change for whom goods and services are produced? If California adopted the German model of higher education, ______would get more and ______ would get less.
college graduates and skilled workers; taxpayers
Consumption goods and services _______.
are items that individuals and governments buy and use up in the current period
An example of a consumption good and service is _______.
a chocolate chip cookie
Capital goods _______.
are goods that businesses and governments buy to increase productive resources to use during future periods to produce other goods and services
An example of a capital good is a _______.
Which of the following list are not factors of production? Explain why.
Item a: Trucks used by FedEx to make deliveries
Item b: Your dog
Item c: Undiscovered coal reserves
Item d: A garbage truck
Item e: A pack of bubble gum
Item f: The President of the United States
Items b, c, and e because they are not productive resources used to produce goods and
labor, capital, or entrepreneurship.
Consider the factors of production and the type of income that each factor of production earns.
Which of the following pairs does not match?
A Job Creation through Entrepreneurship Act, debated in the House of Representatives in 2009, would award grants to small business owners, some of which would be aimed at women, Native Americans, and veterans. The Act would provide $189 million in 2010 and $531 million between 2010 and 2014.
How you would expect this Act to influence what, how, and for whom goods and services are produced in the United States?
change to include more goods produced by the targeted groups;
change to use more technologies common to small business
As a result of this Act, you would expect for whom goods and services are produced in the United States to ______.
change because small business owners will be receiving more income
The pace at which new businesses are created in the U.S. economy and the percentage of U.S. jobs in young firms have fallen.
Explain how these facts might influence what, how, and for whom goods and services are produced in the United States.
The facts in the news clip have implications for ______ goods and services are produced
and for whom
Facts or speculation?
The description of the trends in what we produce is ______ and the implications of the trends for future jobs and incomes are ______ .
a facts that can be checked; guesses that could be wrong
What are the key trends in what is produced in the U.S. economy?
Manufacturing is shrinking and services are expanding
What are some of the jobs more likely to lead to steadily rising incomes in the United States?
healthcare and education
What is a likely successful plan for avoiding economic hardship?
Invest in human capital in a services oriented activity
A circular flow model shows the interrelationship between the ____ markets and the ____ markets.
The major expenditures of the state and local governments are _______.
goods and services, and welfare benefits
What is an example of government activity in the circular flow model?
buy goods and services from firms, which flow through the goods markets
The goods and services that we buy from other countries are U.S. _______. The goods and services that we sell to households and firms in other countries are U.S. _______.
The Commerce Department reports that export orders in the second half of 2008 fell by almost $35 billion while U.S. consumers slashed their spending.
Where, in the circular flow model, do these choices appear?
The fall in exports is ______. The decrease in U.S. consumer spending is a decrease in the money flow from ______.
a decrease in the expenditure flow from the rest of the world economy to the U.S. economy through the goods market;
households to firms through the goods market
Which of the following classifications is correct?
A shopping mall produces retail services and is a capital good.
Which of the following statements about U.S. production is correct?
Services represent 78.2 percent of U.S. production by value and that percentage doesn't fluctuate much from year to year.
Which of the following items is not a factor of production?
A bank loan to a farmer
What is human capital?
Your professor's knowledge of the economy
Which of the following statements is correct?
Capital earns interest and labor earns wages.
How are goods and services produced in the global economy?
Emerging economies use more capital-intensive technology than do developing economies.
In the circular flow model, which of the following items is a real flow?
The flow of labor services from households to firms
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