question
Firms choose how to produce the goods and services they sell. In many cases, firms face a trade-off between using more workers or using more machines. For example,
A.
a local service station has to choose whether to provide car repair services using more diagnostic computers to support their auto mechanics and fewer tools to support their auto mechanics or more tools to support their auto mechanics and fewer diagnostic computers to support their auto mechanics.
B.
many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines.
C.
movie studios have to choose whether to produce animated films using more highly skilled animators to draw them by hand or fewer highly skilled animators and more low-skill animators.
D.
many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer machines and more workers and a production method in China that uses more machines and fewer workers.
A.
a local service station has to choose whether to provide car repair services using more diagnostic computers to support their auto mechanics and fewer tools to support their auto mechanics or more tools to support their auto mechanics and fewer diagnostic computers to support their auto mechanics.
B.
many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer workers and more machines and a production method in China that uses more workers and fewer machines.
C.
movie studios have to choose whether to produce animated films using more highly skilled animators to draw them by hand or fewer highly skilled animators and more low-skill animators.
D.
many times in the past several decades, firms may have chosen between a production method in the United States that uses fewer machines and more workers and a production method in China that uses more machines and fewer workers.
answer
B
question
Opportunity Cost
answer
Refers to a benefit that a person could have received, but gave up, to take another course of action
As chemistry score goes up the economics score falls
As chemistry score goes up the economics score falls
question
Scarcity
answer
Exists because we have unlimited wants but only limited resources are available to fulfill those wants
ex: Time
ex: Time
question
Incentives
answer
offered to encourage people to make certain choices or behave in a certain way
question
Positive Statements
answer
Vanilla is the top flavor at Baskin-Robbins(Can be proven)
People without health insurance weigh less than people with health insurance
People without health insurance weigh less than people with health insurance
question
Normative Statements
answer
Vanilla ice cream is the best(Opinion)
Health Insurance is important
Health Insurance is important
question
Specialization
answer
refers to people, companies or countries focusing on providing a single good or service, instead of a range of different goods or goods and services in a particular area as opposed to a large one so that they can increase their efficiency and profit.
Not all goods and services are traded internationally, production of most goods involves increasing opportunity costs, and tastes for products differ.
Not all goods and services are traded internationally, production of most goods involves increasing opportunity costs, and tastes for products differ.
question
Exchange
answer
Marketplace in which securities, commodities, derivatives and other financial instruments are traded
question
Comparative Advantage
answer
Ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors, this is the basis for trade
question
Absolute Advantage
answer
Ability of an individual, a firm, or a country to produce more of a good or service than competitors using the same amount of resources, this is not the basis for trade
question
PPF's (Production Possibilities Frontier)
answer
A curve showing the maximum attainable combinations of 2 goods that can be produced with available resources and current technologies
question
Demand Shifters
answer
Income, Prices of Related Goods, TASTES, Population and Demographics, and Expected Future Prices
question
Supply Shifters
answer
Price of Inputs, TECHNOLOGICAL Change, Prices of Related goods in PRODUCTION, Number of Firms in a Market, Expected Future Prices
question
Market Equilibrium
answer
A situation in which quantity demanded and quantity supplied are equal
question
Sources of Comparative Advantage
answer
Climate, Natural Resources, Relative Abundance of labor and Capital, Technology, and External Economies
question
Impact of a Tariff or Quota
answer
Cost of Jobs outside the industries are immediately affected
question
Change in Price and Quantities
answer
Usually justified on the basis of the following arguments: Saving jobs, PROTECTING high wages, PROTECTING infant industries, PROTECTING national security
question
Protectionism
answer
Measure of economic output= trade balance, consumer spending, government spending, investment
Not adjusted for pollution or other negative effects of pollution
Not adjusted for Changes in Crime and Other Social Problems
Frequently used as a measure of well-being
Not adjusted for pollution or other negative effects of pollution
Not adjusted for Changes in Crime and Other Social Problems
Frequently used as a measure of well-being
question
GDP(Gross Domestic Product) Definition
answer
C+I+G+NX(Consumption, Investment, Government Purchases, and Net Exports)
question
GDP Component Categories
answer
...The value of goods and services evaluated at base-year prices
...Calculated by summing the current values of final goods and services
...Calculated by summing the current values of final goods and services
question
Real Vs. Nominal
answer
.. show for different countries the levels of GDP per PERSON, calculated by dividing the value of GDP for a country by the country's population
...Used as a measure of well being, measures a countries.. production
...Used as a measure of well being, measures a countries.. production
question
Total Vs. Per Capita
answer
New-Old
----------x100
Old
----------x100
Old
question
Percentage Change(Growth Rate)
answer
A period during which production and employment are decreasing
question
Definition of Recession
answer
Doesn't include Household Production- Goods and services people produce for themselves
Example: If the carpenter makes a bookcase for personal use
If the carpenter does not live in the house and makes a bookcase for someone else, it is included in GDP
Underground Economy- Individuals and firms conceal what they buy and sell for 3 main reasons: They are dealing in illegal goods and services such as drugs or prostitution, they want to avoid paying taxes on income they've earned, or want to avoid gov't regulations
Example: If the carpenter makes a bookcase for personal use
If the carpenter does not live in the house and makes a bookcase for someone else, it is included in GDP
Underground Economy- Individuals and firms conceal what they buy and sell for 3 main reasons: They are dealing in illegal goods and services such as drugs or prostitution, they want to avoid paying taxes on income they've earned, or want to avoid gov't regulations
question
Problems of GDP
answer
Study of human action, how people make choices
question
Economics
answer
Increase in Price, Causes Increase in Quantity
Price decreases, quantity supplied decreases.
Price decreases, quantity supplied decreases.
question
Law of Supply
answer
Decrease in Quantity, Causes Increase in Price
Increase in Quantity Causes increase in Price
Increase in Quantity Causes increase in Price
question
Law of Demand
answer
All Else Equal
question
Ceteris Paribus
answer
The... is unilaterally imposed by one nation on the other while the VER(Voluntary Export Restraints) is the result of negotiations between nations
question
Difference Between a Quota and Voluntary Export
answer
A tax imposed by a gov't on imports competing industries and its workers from foreign competition
question
Tariff
answer
Goods and Services produced domestically but BOUGHT in other countries
question
Imports
answer
Goods and Services produced domestically but SOLD in other countries
question
Exports
answer
A numerical limit a gov't imposes on the quantity of a good that can be imported into that country
question
Quota
answer
Physical..., such as machinery, that is used to produce other goods
question
Capital
answer
Idea that because of scarcity producing more of 1 good or service means producing less of an other good or service
3 Questions- What goods and services will be produced?, how will the goods and services be produced?, and who will receive the goods and services produced?
3 Questions- What goods and services will be produced?, how will the goods and services be produced?, and who will receive the goods and services produced?
question
Trade-Off
answer
Nominal GDP
____________________X100
Real GDP
____________________X100
Real GDP
question
GDP Deflator
answer
Nominal GDP
---------------x100
GDP Deflator
---------------x100
GDP Deflator
question
Another Formula for Real GDP
answer
Labor, Capital, Land, and Entrepreneurship
question
Factors Of Production(Circular Flow Diagram)
answer
Goods and Services that can be used for the same purpose
Ex: Coca Cola, Pepsi
Ex: Coca Cola, Pepsi
question
Substitutes
answer
Goods and Services that are used together
PB&J, Ice Cream and Hot Fudge
PB&J, Ice Cream and Hot Fudge
question
Compliments
answer
Quantity supplied is greater than demanded
question
Surplus
answer
Q demanded is greater than supplied
question
Shortage
answer
Price decreases, Quantity Increases
question
Shift to the right in Supply
answer
Price Increases, Quantity decreases
question
Shift to the left in Supply
answer
Price Increases, Quantity Increases
question
Shift to the right in Demand
answer
Price decreases, Quantity decreases
question
Shift to the left in demand
answer
Those that last a long period of time(3 years, Lamp)
question
Durable Goods
answer
Those that do not last long at all (Fast Food)
question
Non-Durable Good
answer
No, she is giving herself a service
question
Is this GDP, if so what category...Anna spends one hour giving herself a manicure and pedicure?
answer
Yes, Investment
question
Is this GDP, if so what category, ....Anna's aunt and uncle, who live in Houston TX, spend 12,000 on NEW equipment for their business
answer
Yes, French wine is an Import(Consumer)
question
Is this GDP, if so what category, ...Anna's parents spend $60 on french wine
answer
No, underground economy, it is probably illegal money
question
Is this GDP, if so what category...Anna pays $45 for a manicure and pedicure. The shop owner slips the cash into an envelope rather than recording the sale?
answer
Not used to make something else
ex:Pickup Truck, New home
ex:Pickup Truck, New home
question
Final Good
answer
Used in production of another good
ex: Cotton, Coffee beans purchased by a coffee shop
ex: Cotton, Coffee beans purchased by a coffee shop
question
Intermediate Good
answer
The policies are consistent with economic incentives
question
When the federal government crafts environmental policies that make it less expensive for firms to follow green initiatives
answer
marginal benefit equals marginal cost
question
Economists use the word marginal to mean an extra or additional benefit or cost of a decision. An optimal decision occurs when
answer
Scarcity
question
One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls
answer
D
question
A free market exists
A. when the government places significant restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed.
B.
only in fiction. There are no markets or economies which even come close to approaching the status of a free market.
C.
when the government places absolutely no restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed.
D.
when the government places few restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed.
A. when the government places significant restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed.
B.
only in fiction. There are no markets or economies which even come close to approaching the status of a free market.
C.
when the government places absolutely no restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed.
D.
when the government places few restrictions on how a good or a service can be produced or sold or on how a factor of production can be employed.
answer
when income increases, demand for a normal good increases while demand for an inferior good falls.
question
Difference between a normal and inferior good...
answer
undefined
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
