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46 terms

Survey of Economics Exam 1, Litzinger RMU

A list of all the questions of exam 1 given by Litzinger and the correct answers.
STUDY
PLAY
In economic theory and analysis, cost of production that do not change when the rate of output is altered, eg., the cost of basic plant and equipment are called
fixed costs
In economic theory and analysis, goods and services sold to foreign buyers are called
exports
In economic theory and analysis, resource inputs used to produce goods and services, eg., land, labor, capital, entrepreneurship, are called
factors of production
The central problem of economics is the:
Scarcity of resources relative to human wants.
People benefit by participating in the market because:
It facilitates specialization and increased consumption.
In economic theory and analysis, total cost divided by the quantity produced in a given time period is called
average total cost (ATC)
In economic theory and analysis, the total value of goods and services produced within a nation's borders in a given time period is called the
gross domestic product (GDP)
For consumers, most market activity can be explained by the goal of
Maximizing happiness.
In economics, what is the best example of capital?
A computer used by a lawyer to prepare legal documents.
In economic theory and analysis, the difference between total revenue and total cost is called
profit
Market demand is the:
sum of all individual demands for a product in a given time period
Societies must address the question of WHAT to produce because:
we can't produce all the goods and services we want
Per capita GDP is the most practical way to:
Analyze the growth rate of the economy over time.
In economic theory and analysis, the statement "the marginal utility of a good declines as more of it is consumed in a given time period" is called the
law of diminishing marginal utility
Not a factor of production: Land, wages, labor, capital?
Wages
The value of output produced in the United States in current prices measures:
Nominal GDP
In economic theory and analysis, the value of all resources used to produce a good or service, opportunity cost, is called:
economic cost
Which of the following is not included in the U.S. GDP:
Anything not produced in the US, e.g. Toys produced by a U.S. firm located in China
In economic theory and analysis, an economy that uses both market and non market signals to allocate goods and resources is called a:
Mixed economy
If demand is elastic, then:
Quantity demanded is very responsive to changes in price
In economic theory and analysis, a lower limit on the price of a good is called a
price floor
The U.S. GDP for 2009 was approximately:
$15 trillion
Changes in real GDP serve as a better measure of the health of the economy than changes in nominal GDP because real GDP measures changes in:
output only
In economic theory and analysis, the decision to build, buy, or lease plant and equipment, to enter or exit an industry, is called the
investment decision
In economic theory and analysis, the statement "the quantity of a good supplied in a given time period increases as its price increases, ceteris paribus," is called the
law of supply
Which of the following is a constraint that motivates economic interactions:
The limited resources that individuals have
The demand curve is downward sloping because as marginal utility diminishes:
Consumers are willings to buy more of the good only at lower prices
In economic theory and analysis, the percentage change in quantity demanded divided by the percentage change in price measures the
price elasticity of demand
In economic theory and analysis, the doctrine of "leave it alone," of nonintervention by government in the market mechanism is referred to as
laisses faire
In economic theory and analysis, and imperfection in the market mechanism that prevents optimal outcomes is called a
market failure
A price ceiling is:
an upper limit on the price of a good
In economic theory and analysis, the change in total utility obtained by consuming one additional (marginal) unit of a good or service consumed is called the
marginal utility
In economic theory and analysis, the direct exchange of one good for another, without the use of money, is called
barter
Demand is defined as the:
ability and willingness to buy specific quantities of a good or service at various prices in a given time period, ceteris paribus.
In economic theory and analysis, the way personal income is divided up among households or income classes is called the
personal distribution of income
In economic theory and analysis, the price of a product multiplied by the quantity sold in a given time period, p x q, measures the
total revenue
In economic theory and analysis, the knowledge and skills possessed by the workforce is called the
entrepreneurial ability
Consumers _______ factors of production in the _______ market.
Sell; factor
Opportunity costs are experienced whenever choices are made because:
resources are scarce
In economic theory and analysis, the amount by which the quantity demanded exceeds the quantity supplied at a given price, excess demand, is called the:
market shortage
In economic theory and analysis, the amount of satisfaction obtained from entire consumption of a product is called:
total utility
In economic theory and analysis, the most desired goods and services that are forgone in order to obtain something else is referred to as the
opportunity cost
In economic theory and analysis, production processes that use a high ratio of capital to labor inputs are referred to as:
capital intensive
Which of the following has the largest GDP? Britain, United States, China, Japan
USA! USA! USA!
The largest portion of the average U.S. consumer dollar is spent on:
Housing
In economic theory and analysis, a curve describing the quantities of a good a consumer is willing and able to buy at alternative prices in a given tim period, ceteris paribus, is called a
demand curve