question
The study of economics is primarily concerned with:
answer
Choices which have to be made concerning the use of scarce resources.
question
When an economist says that there is "too much of a good thing," the economist is suggesting that:
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The marginal benefit of the thing is less than the marginal cost
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The economizing problem is essentially one of deciding how to make the best use of:
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Limited resources to satisfy unlimited economic wants.
question
There are 4 factors of production. Which of the following best describes _____________?
answer
land, labor, capital, entrepreneurial ability
question
Answer list
answer
The other-things-equal assumption, The economic perspective, The invisible hand, laissez-faire
question
Which of the following answers best describes entrepreneurial ability?
answer
Know what entrepreneurs do
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Graph from #7, Chapter 1-2 Review Questions
answer
...
question
Similar Graph from #8, Chapter 1-2 Review Questions
answer
...
question
A fundamental difference between the command system and laissez-faire capitalism is that, in command systems:
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The division of output is decided by central planning rather than by individuals operating freely through markets.
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The "invisible hand" and "spontaneous order" can be described as:
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opposites (?) wrong b/c order comes from God (?)
question
...
answer
Negative externalities, Consumer sovereignty, The invisible hand, Market failure
question
Which is not one of the five fundamental questions that an economy must deal with?
answer
1. What goods and services will be produced?
2. How will the goods and services be produced?
3. Who will get the goods and services?
4. How does the system accommodate change?
5. How does the system promote progress?
2. How will the goods and services be produced?
3. Who will get the goods and services?
4. How does the system accommodate change?
5. How does the system promote progress?
question
The simple circular flow model shows that:
answer
Resources flow from households to firms and products flow from firms to households.
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Graph #18, Chapter 1-2 Review Questions
answer
Wage, rent, interest, income (flow 1); Land, labor, capital, entrepreneurial ability (flow 2); Goods and services (flow 3); Consumer expenditures (flow 4)
question
The law of demand states that, other things equal:
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an increase in a product's price will reduce the quantity of it demanded, and conversely for a decrease in price.
question
...
answer
Normal good, diminishing marginal utility, income effect, substitution effect
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An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction is based on the assumption that:
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Bicycles are normal goods.
question
Which of the following would most likely increase the demand for gasoline?
answer
The expectation by consumers that gasoline prices will be higher in the future.
question
Graph #7, Chapter 3 Review Questions
answer
...
question
Jennifer buys a piece of costume jewelry for $33 for which she was willing to pay $42. The minimum acceptable price to the seller, Nathan, was $30. Jennifer experiences:
answer
A consumer surplus of $9 and Nathan experiences a producer surplus of $3.
question
Rivalry and excludability are the main characteristics of:
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Private goods
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If an economy produces society's most wanted goods but uses outdated production methods, it is:
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Not achieving productive efficiency.
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Graph #2, Chapter 4-5 Review Questions
answer
...
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Graph #5, Chapter 4-5 Review Questions
answer
...
question
Which is an example of a negative externality?
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There is an increase in injuries to pedestrians caused by accidents resulting from electronic billboards distracting drivers.
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The socially optimal amount of pollution abatement occurs where society's:
answer
Benefit of abatement equals its marginal cost of abatement.
question
Graph #9, Chapter 4-5 Review Questions
answer
...
question
In a market economy, the government's power to coerce can:
answer
Reduce private-sector risk and increase economic efficiency.
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Using this definition of entrepreneurship-human actions which modify the present intended to achieve objectives in the future-who uses entrepreneurship?
answer
Everyone is an entrepreneur.
question
The idea of government failure includes all of the following except:
answer
Extensive positive externalities from public and quasi-public goods.
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Which of the following would be the best example of the special-interest effect?
answer
A small number of people receive a large gain at the expense of a large number of people who experience a small cost
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Public-choice theorists point out that the political process:
answer
Differs from the marketplace in that voters and congressional representatives often face limited and bundled choices.
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From an economist's perspective, when is government too big?
answer
When the marginal costs from additional government spending exceed marginal benefits.
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