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Principles of Economics Flashcards | StudBud
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Principles of Economics
Principles of Economics
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Questions
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Answers
1
Which one is not a factor of production
capital
time
land
labor
2
What is exchanged in the product market?
land for capital
services for labor
goods for services
goods and services for their prices
3
Goods that are rivalrous and excludable are usually
club goods
public goods
common pool resources
private goods
4
The next best alternative for using your resources
allocation
opportunity benefit
trade-off
opportunity cost
5
According to free market principles, who owns the factors of production?
firms
households
government
all of these
6
Profit motive or self-interest is what motivates an entrepreneur to be in the market.
False
True
7
Which is NOT true of the government in a free enterprise Circular Flow Model
none of these is true
it acts as a consumer in the product market
it acts as a producer in the factor market
it owns the factors of production
8
The best way to take care of an externality is to regulate the industry that is causing the market failure
True
False
9
Entrepreneurship is the risk that a firm takes to try to sell a final product for less than it cost to make it.
True
False
10
The economic system that answers the 3 key economic questions with a combination of free market and government solutions
command economy
mixed economy
market economy
traditional economy
11
Production levels below the PPF shows
a growing economy
underutilization use of resources
losses by the firms
efficient production levels
12
The best way to take care of the free rider problem is to make it excludable if possible
False
True
13
Why does the PPF curve, bend, or arc?
the law of constant returns
the law of increasing opportunity cost
the law of supply
the law of demand
14
Consumers can show their dissatisfaction with a product or firm by
No longer buying that product
Telling their friends not to buy
Writing a bad review
Egg the business
15
I think I am ready for this test
False
True
16
Which is not a key questions all societies must answer?
how to produce it
what to charge for the product
for whom to produce it
what to produce
17
Government can encourage technological innovation by issuing patents or subsidizing research
True
False
18
The PPF measures the opportunity cost of two different production decisions.
True
False
19
The point (Y) indicates this economy is overproducing both Cotton and Wine.
True
False
20
How does competition regulate the market?
by raising prices
by expensive advertising
by forcing the consumer to buy
by giving alternative choices
21
Which is not a market failure?
high prices
free riders
tragedy of the commons
externalities
22
The R and D graveyard refers to
what the government does to inventions they don't like
money that's wasted on bad projects
the underground economy
the place where innovative ideas die before becoming profitable
23
Most public goods are
neither excludable nor rivalrous
rivalrous but not excludable
excludable and rivalrous
excludable but not rivalrous
24
What is traded within the factor market?
all of these
labor for wages
capital for interest
land for rent
25
The Circular Flow Model is made up of two markets: product and factor.
True
False
26
Which is not a discipline within the study of Economics?
Macroeconomics
Accounting
Microeconomics
Global Economics
27
Which one would not cause the PPF to push outward away from the origin?
becoming more efficient
adding new labor
adding new technoolgy
lowering the price
28
Economics is all of these except ...
Relationships
Decision Making
Money
Common Sense
29
The tragedy of the commons is not likely to happen if the good or service is
open access
publicly owned
the good or service is not taxed
closed access
30
Which determinant of demand are products that are used together?
attitude
complement
substitute
income
31
The permanent condition that exists because there are not enough resources to meet all the wants and needs.
trade-off
shortage
surplus
scarcity
32
Allocation is setting aside resources for specific uses
True
False
33
Which determinant of demand are products that compete against one another?
income
attitude
substitute
complement
