Command economy characteristics include

government controls all factors of production

Which of the following is true of the concept of increasing opportunity costs?

making more of 1 good means other resources are sacrificed

Unemployment and/or productive inefficiencies

are both illustrated by a point inside the PPC

Which of the following statements about the PPC is true?

Relative poisition of C & D reflect production alternatives

A recurring theme in economics is

People face limited resources with unlimited wants

Which of the following is true if the PPC is concave to the origin?

As more of 1 is made, more & more of the other is given up

For the data in the table below, increasing opportunity costs is reflected in the fact that

Constant amt. of capital gds. are lost to incr. consumer gds

Which of the following violates the economic concept of matching MB with MC in test taking?

Most grades are B-; I will only study Econ where I have an A

How might point E be attained?

If improve. in tech occurred in computer OR farm sectors

TINSTAAFL refers to the theory that

There is no such thing as a free lunch

If an economy produces its most wanted goods but uses outdated production methods, it is

not achieving productive efficiency

Which of the following lists includes only capital resources (no labor or land resources)?

rental cars, computers at the car rental agency

A rational decision maker will choose to act only if

Marginal benefit ≥ marginal cost of the action

The term laissez faire suggests that

Govt. should not interfere with the operation of the economy

An opportunity cost is entailed in which of the following situations?

Every decision involves opportunity Cost!!

The division of labor means that

workers specialize in various production tasks

Even though local newspapers are inexpensive, people rarely buy more than 1 per day. This fact:

Implies that the MB of reading a 2nd newspaper < the MC

Which of the following would cause an outward or rightward shift of the PPC?

An increase in capital equipment

The two general types of economic systems that exist today are

Market systems & command systems

According to the theory of comparative advantage, a good should be produced where

Its opportunity costs are least

The study of economics is primarily concerned with which of the following?

Allocation of scarce resources, given unlimited wants

Which of the following is one of the Four Fundamental Questions?

What goods and services will be produced?

Economics is characterized as a Social Science instead of a "hard" science because it

Studies individuals & their decision making processes

The assertion that "There is no free lunch" means that

all prod. uses scarce resources & sacrifices alt. goods

Which of the following is a distinguishing feature of a market system?

Wide-spread private ownership of capital

In the table below, a total output of 6 units of capital goods and 4 units of consumer goods:

None, it would be inside the curve

Which of the following would cause a leftward (inward) shift of the PPC?

A decrease in capital equipment

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Intro Unit - Economics

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Introductory Microeconomics AP review of vocabulary. 1 - 30 questions are useful for college prep econ. #opportunitycost #vocabularyreview

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Questions 50

Answers

1
Command economy characteristics include
kind dictators
government controls all factors of production
private ownership
equity for all!
2
Adam Smith's economic theory is called
Absolute Advantage
Supply Side Economics
The Invisible Hand
Demographic Transition
3
Which of the following is true of the concept of increasing opportunity costs?
Unlimited wants can be fulfilled
Irrelevant if PPC is convex to the origin
making more of 1 good means other resources are sacrificed
Unimportant in command economies due to central planning
4
Which of the following is a distinguishing feature of a command system?
Private ownership of all capital
Wide-spread dispersion of economic power
Central planning
Heavy reliance on markets
5
Unemployment and/or productive inefficiencies
are both illustrated by a point inside the PPC
are both illustrated by a point outside the PPC
can exist at any point on a PPC
cause the PPC to shift outward
6
Which of the following statements about the PPC is true?
Point D is not attainable given the society's resources
Full employment will move the PPC to the right closer to E
Relative poisition of C & D reflect production alternatives
Point A is not attainable in a developed society
7
A recurring theme in economics is
People face limited resources with unlimited wants
There are more resources than wants
People have unlimited wants in face of unlimited resources
People have limited wants in face of unlimited resources
8
Which of the following is true if the PPC is concave to the origin?
The price of the two products is the same
It's possible to produce more of both goods.
Both products are equally able to satisfy consumer wants
As more of 1 is made, more & more of the other is given up
9
Which of the following goods can be considered scarce?
Air
Pollution
Polio
Water
10
Important characteristics of the Market Economy include
using technology
Answers 1 & 3
the government makes all of the decisions.
owning private property
11
To be considered scarce, an economic resource must be
Desirable, and useful only
Desirable & Limited only
Desirable, Free, and useful
Useful, desirable, and limited
12
Now that Bob only packages burgers and Sue the fries, they can serve twice as many. This is
Scarcity
Command Economy
Traditional Economy
Comparative Advantage
13
The value of the best alternative forgone when a decision is made defines
Economic Good
Tradeoff
Scarcity
Opportunity Cost
14
For the data in the table below, increasing opportunity costs is reflected in the fact that
Must lose consumer gds. to get more capital gds.
Constant amt. of capital gds. are lost to incr. consumer gds
The graph would be a straight down-sloping line
Economy's resources are presumed to be scarce
15
Which of the following violates the economic concept of matching MB with MC in test taking?
All violate the concept of matching MB with MC
Most grades are B-; I will only study Econ where I have an A
I have a B-, final counts 50%, going to study more for this
I have an A, final is optional, not going to take it!
16
UTK inherited a large mansion and plans to use it for faculty parties. The cost to UTK is:
How much UTK would get if mansion is rented or sold
Zero, it was a gift
Both B and C
Upkeep, maintenance, utilities, etc.
17
How might point E be attained?
If improve. in tech occurred in computer OR farm sectors
If more scarce resources were used to produce farm products
If country's resources were more fully employed
If firms decreased their output of computers
18
The output of an economic system is commonly divided into what 2 categories?
Wants & needs
Wants & desires
Money & wealth
Goods & services
19
TINSTAAFL refers to the theory that
There is no such thing as a free lunch
There is no such thing as free living
All are true
There is no such thing as a fun life
20
Economists measure the true cost of a good or service by its
Dollar price
Intrinsic value
Value
Opportunity cost
21
In the Circular Flow Diagram, the 2 basic markets shown are
Free & controlled
Capital goods & consumer goods
Product & factor
Households & government
22
If an economy produces its most wanted goods but uses outdated production methods, it is
achieving both productive & allocative efficiency
not achieving productive efficiency
productively efficient but not allocatively efficient
engaged in "roundabout" production
23
Which of the following lists includes only capital resources (no labor or land resources)?
owner of a startup firm, chemistry lab, a researcher
ice arena, pro hockey player, hockey uniforms
rental cars, computers at the car rental agency
hydroelectric dam, water behind the dam, power lines
24
Examples of command economies are
The United States & Japan
Mexico & Brazil
Sweden & Norway
Cuba & North Korea
25
A rational decision maker will choose to act only if
Marginal benefit ≥ marginal cost of the action
Marginal benefit < average cost of the action
Marginal benefit > average cost of the action
Average benefit < average cost of the action
26
The term ceteris paribus means:
III & IV only
I & II only
I only
III only
27
Which of the following is an example of capital?
A pair of stockings
A share of IBM stock
A savings account
A construction crane
28
The term laissez faire suggests that
Govt. should not interfere with the operation of the economy
Govt. action necessary for economy to reach full production
Natural resources publicly owned; capital privately owned
Natural resources be privately owned; capital publicly owned
29
To be considered scarce, an economic resource must be
Desirable, Useful, and Limited
Desirable and free
Undesirable,useful, and limited
Desirable, useful, and free
30
An opportunity cost is entailed in which of the following situations?
When you go to the movies instead of studying
You buy popcorn at the movies
Every decision involves opportunity Cost!!
You become a surgeon instead of a Wal - Mart greeter
31
The division of labor means that
labor markets are geographically segmented
workers specialize in various production tasks
each worker performs a large number of tasks
unskilled workers outnumber skilled workers
32
Which of the following is NOT a factor of production?
Land
Labor
Free Goods
Capital
33
Even though local newspapers are inexpensive, people rarely buy more than 1 per day. This fact:
Implies that the MB of reading a 2nd newspaper < the MC
Implies reading should be taught through phonics
Contradicts the economic perspective
Is an example of irrational behavior.
34
Which of the following would cause an outward or rightward shift of the PPC?
An increase in capital equipment
A decrease in natural resources
A decrease in the number of workers
An increase in unployment
35
Which of the following equations best defines the economic problem of scarcity?
Wants > Resources
Wants = Resources
Wants < Resources
Resources > Wants
36
Of the three economic systems, this system allows people more freedom and choice:
I and II only
IV & V only
II and III only
III & IV only
37
Which problems do all economic systems face?
scarcity and The 3 Questions
Government Interdependence
scarcity and the right to arm themselves
scarcity
38
Which of the following is a land resource?
A machine for detecting earthquakes
Natural gas
A farmer
An oil drilling rig
39
If the country is producing at Point C, it can produce more computers by:
Moving to point D
Moving to point E
Moving to point A
Moving to point B
40
The two general types of economic systems that exist today are
Market systems & command systems
Socialism & central planning
Laissez faire systems & pure command systems
Market systems & capitalism
41
According to the theory of comparative advantage, a good should be produced where
Production can occur with the lowest increase in employment
The cost of real resources used is least
Its opportunity costs are least
Its explicit costs are least
42
The study of economics is primarily concerned with which of the following?
Provision of conclusive answer to public policy issues
Fair & equal treatment of all households
Allocation of scarce resources, given unlimited wants
Testing of hypotheses under controlled conditions
43
Which of the following is one of the Four Fundamental Questions?
How much should the society save?
Who should appoint the head of the central bank?
What goods and services will be produced?
Which products will be scarce and which in excess supply?
44
Economics is characterized as a Social Science instead of a "hard" science because it
Studies money & decision making of financial institutions
Investigates fiscal & monetary policy
Does not use the scientific method
Studies individuals & their decision making processes
45
The PPC of the country would most likely shift to the right if current production was at
Point B
Point C
Point A
Point E
46
The assertion that "There is no free lunch" means that
all prod. uses scarce resources & sacrifices alt. goods
there are always tradeoffs between economic goals
choices need not be made if behavior is rational
marginal analysis is not used in economic reasoning
47
Which of the following is a distinguishing feature of a market system?
Wide-spread private ownership of capital
Public ownership of all capital
A circular flow of goods, resources, and money
Central planning
48
In the table below, a total output of 6 units of capital goods and 4 units of consumer goods:
C
None, it would be inside the curve
E
A
49
Which of the following would cause a leftward (inward) shift of the PPC?
An increase in technolgoy
An increase in unemployment from 5% to 8%
A decrease in capital equipment
A decrease in inflation
50
Which of the following would not be considered one of society's economic resources?
Money
Land
Capital
Labor

Intro Unit - Economics Flashcards | StudBud