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Economics. Final Exam Review. Use of fewer resources than an economy is capable of using. Underutilization. Something essential for survival. Need. Effort people devote to tasks for which they are paid. Labor. The extra cost of adding one unit. Marginal Cost.

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economics

Economics

Final Exam Review

principle that limited amounts of goods and services are available to meet unlimited wants
Principle that limited amounts of goods and services are available to meet unlimited wants.
  • Scarcity
principle that people have the right to control their possessions and use them as they wish
Principle that people have the right to control their possessions and use them as they wish.
  • Private Property Rights
direct payments of money by the government to the poor disabled or retired people
Direct payments of money by the government to the poor, disabled, or retired people.
  • Cash Transfers
table listing the quantity of a good that all consumers will buy at various prices
Table listing the quantity of a good that all consumers will buy at various prices.
  • Market Demand Schedule
change in consumption that results when a price increase causes real income to decline
Change in consumption that results when a price increase causes real income to decline.
  • Income Effect
consuming less of a good and more of another as a reaction to a price increase
Consuming less of a good and more of another as a reaction to a price increase.
  • Substitution Effect
illegal agreement among firms to divide the market set prices or limit production
Illegal agreement among firms to divide the market, set prices, or limit production.
  • Collusion
market structure in which many companies sell products that are similar but not identical
Market structure in which many companies sell products that are similar but not identical.
  • Monopolistic Competition
selling a product below cost for a short period of time to drive competitors out of the market
Selling a product below cost for a short period of time to drive competitors out of the market.
  • Predatory Pricing
expenses new businesses must pay before they can begin to produce and sell goods
Expenses new businesses must pay before they can begin to produce and sell goods.
  • Start-up Costs
what is an example of a shortage
What is an example of a shortage?
  • A type of doll is not available because a limited number were made.
slide63
The government of a country must make a decision between increasing military spending and subsidizing wheat farmers. This is an example of:
  • A guns or butter issue
slide64
You bought 2 new CDs with the last $30 in your checking account, and your next payday is Monday. What is the opportunity cost of these CDs?
  • The night out with your friends that you miss because you can’t afford it now.
which of the following lists of factors of production would an economist categorize as land
Which of the following lists of factors of production would an economist categorize as land?
  • Iron ore, natural gas, fertile soil, water
a company that makes baseball caps is underutilizing its resources what does this mean
A company that makes baseball caps is underutilizing its resources. What does this mean?
  • The company is producing fewer caps than it could be.
what is the product market
What is the product market?
  • The market in which households purchase the goods and services that firms produce.
which of the following best describes the economy of the u s
Which of the following best describes the economy of the U.S.?
  • Mixed, but more like a free market
which of the following might be a positive aspect of centrally planned economies
Which of the following might be a positive aspect of centrally planned economies?
  • Low unemployment due to guaranteed jobs.
which statement best describes the role of government in a free enterprise system
Which statement best describes the role of government in a free enterprise system?
  • It regulates businesses when the public interest is involved.
something is generally considered to be a public good if
Something is generally considered to be a public good if:
  • The total benefits to society are greater than the total financial costs.
slide74
Why has the federal government passed laws requiring businesses to disclose product information to the public?
  • To make buyers more knowledgeable and safer.
slide75

You will still be able to get a public broadcasting channel even though you did not contribute to its fundraising campaign. This is an example of:

  • A free-rider problem
slide77
If you create a demand schedule for an individual and for a market for the same product, what will remain the same in both schedules?
  • Prices of the good or service
the substitution effect and the income effect describe
The substitution effect and the income effect describe:
  • Factors that influence consumer buying choices.
slide80

The price of cranberry juice suddenly increases. As a result, Glenda begins drinking more grape juice, which is less expensive, but tastes just as good to her. In this case, Glenda’s elastic demand is due to:

  • Availability of substitutes
slide81

Due to an increase in her rent, Isa needs to cut back her spending on other items. Which of the following types of goods will Isa consume less of?

  • Normal Goods
slide82
The price of home computers rises. According to the law of supply, manufacturers will respond to this price increase by:
  • Increasing computer production
if the supply of a good is inelastic producers will
If the supply of a good is inelastic, producers will:
  • Not change quantity supplied much if prices double.
slide85
A steel mill has fixed costs of $100 per hour and variable costs of $50 per hour. What will happen to these costs if the mill closes?
  • The variable costs will drop to zero, but the fixed costs will stay the same.
slide86
Farmer Brown has ten dairy cows. Her feed costs go up, but milk production stays the same. What effect will this have on her supply?
  • None, although she will raise prices to make up the lost revenue.
on which kinds of goods do governments generally place price ceilings
On which kinds of goods do governments generally place price ceilings?
  • Those that are essential but too expensive for some consumers.
how does the free market benefit from the profit incentive
How does the free market benefit from the profit incentive?
  • The profit incentive promotes efficient resource allocation.
slide89
Which traffic signal best represents the message that providers of cable services receive from declining customer subscriptions?
  • Red light
slide90
In response to rising car traffic, demand for bicycles has increased. The new equilibrium point will show:
  • More bicycles sold, but at a higher price.
what kind of market runs most efficiently when one large firm supplies all of the output
What kind of market runs most efficiently when one large firm supplies all of the output?
  • A natural monopoly
in a perfectly competitive market output reaches a point where it
In a perfectly competitive market, output reaches a point where it:
  • Is just enough to cover opportunity costs
what is one example of a monopoly that the u s government generally permits
What is one example of a monopoly that the U.S. government generally permits?
  • Professional sports leagues
slide99

Ellen started a catering business, but soon decided that it was too stressful for her. She was able to close her business rather easily because it was a:

  • Sole proprietorship
slide100
RunnerPro Company designs their shoes in the United States but assembles them in Singapore. RunnerPro is a:
  • Multinational corporation
which of following is a disadvantage of a sole proprietorship
Which of following is a disadvantage of a sole proprietorship?
  • Lack of permanence