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IB1 economics revision
IB1 economics revision
31 terms
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StudBud Administration
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Micro- and macro-economics revision
Flashcards
31 cards
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Practice quiz
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Questions
31
Answers
1
Increasing the money supply shifts
aggragate demand
long run aggregate supply
total labour force
aggregate supply
2
Elastic PED is
∞
> -1
0
< -1
3
Fiscal policy (normally) shifts
aggregate demand
production possibility curve
aggregate supply
long run aggregate supply
4
Withdrawal or leakage from the circular flow of income includes
tax
exports
inflation
income from abroad
5
Inflation is a problem because...
the government can't do anything about it
governments may lose an election if it is too high
it reduces the value of debt (making it easier to pay off)
it reduces the real wages and standard of living of consumers
6
Monopolistic competition is when
many firms compete in a market with non-homogenous products
one firm dominates a market
one firm exists in a market
many firms compete in a market with homogenous products
7
The nearest example to perfect competition is
telecommunications
air travel
car production
farming
8
Unemployment is inefficient because...
equilibrium wages are too low
governments may lose an election if it is too high
of the free-rider problem
not all available resources are employed
9
Market failure is when markets
don't
operate in the best interests of society
allocate all resources
produce what consumers demand
create the greatest happiness
10
An indirect tax is
a tax on income
a tax on imports
a tax on goods and services
a tax on wealth
11
Keynes greatest regret was
None of these
not drinking enough champagne
having believed in a free market economy
Not eradicating unemployment
12
Disinflation is
a negative consumer price index
a rate of inflation below zero
a fall in the average price level
a fall in the rate of inflation
13
Bus tickets are an inferior good because they have
a YED greater than 1
a negative YED
a YED that tends towards infinity
a positive YED
14
The food retailing market in Finland is an example of
monopoly
monopolistic competition
perfect competition
oligopoly
15
Sustainable production or growth in economics means
firms don't go bankrupt
it will continue increasing without a fall or stop
firms make an economic profit in the long run
future generations will be at least as well off as present
16
Normal goods have
positive YED
negative YED
no YED
indeterminate YED (either/or)
17
Factor costs (of production) include
external cost
land cost
opportunity cost
depreciation
18
Opportunity cost is
what is given up to gain something
what is costs to produce something
what is lost and can't be found
what a consumer pays for something
19
Cyclical (demand-defficient) unemployment includes
those living off unemployment benefit
those who are unemployed during a recession ( in a deflationary gap)
those between jobs in the short run
those whose skills are no longer needed
20
Public goods are
non-rivalrous and non-excludable
provided by government through taxation
rivalrous and excludable
free for everybody
21
Common pool resources are
available to everyone
private goods
owned by the government
public goods
22
market-based supply-side policy could include
reducing interest rates (within the macro-economy)
reducing minimum wages (within the macro-economy)
relocating people (within the macro-economy)
retraining people (within the macro-economy)
23
Unemployment is measured by...
the percentage of the population without employment
the number of people not working
the percentage of the working age population without employment
the percentage of the workforce without employment
24
A floor price is
a fair price
an equilibrium price
a maximum price
a minimum price
25
Economic growth...
threatening sustainability
avoiding all market failure
avoiding the business cycle
creating global equality
26
Progressive tax can
create a wider distribution of income
reduce the motivation to work
reduce equality in society
be fair to everybody
27
Payment for land (as a factor of production) is
profit
rent
interest
wages
28
Inflation is defined as...
an increase in prices
a fall in the value of the currency in relation to other currencies
a sustained increase in the average price level
an uncontrolled increase in the quantity (supply) of money
29
A market equilibrium is where
consumer and producer surplus is maximised
all other things remain equal
everything is awesome
consumers benefit is greater than producer benefit
30
A good example of a monopoly is
Neste
Alko
Tesla
Apple
31
The components of aggregate demand include
taxation
investment
wages
savings
