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Shifting Supply and Demand + Unit 1 Review Flashcards | StudBud
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Shifting Supply and Demand + Unit 1 Review
Shifting Supply and Demand + Unit 1 Review
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1
Hamburger Market: The price of hamburgers falls.
Shortage
Supply Shifts Left (Decreases)
Surplus
Demand Shifts Right (Increases)
2
What are the three factors that can increase productive capacity?
financial investments
trade
technology
resources
3
Who supplies the factors of production in the circular flow of a market economy?
Firms
Governments
Households
4
What are the three economic questions a society must answer ?
Who to trade with? How much to trade? What to trade?
What is the market like? What is the currency? What to trade
What to produce? Who to produce for? How to produce it?
What is the population ? What is the weather? What for?
5
How does trade make people economically wealthier?
By moving goods to where people value them.
By increasing the variety and quantity of goods.
By increasing financial profits.
By lowering the costs of production.
6
What are the four factors of production?
Water, Air, Earth, Fire
Land, Labor, capital, Entrepreneurship
Land, Labor, Capital, Entertainment
Land, Liberty, Capital Entertainment
7
Hamburger Market: New burger making technology cuts down production time.
Demand Shifts Left (Decreases)
Surplus
Demand Shifts Right (Increases)
Supply Shifts Right (Increases)
8
Who supplies goods and services in the circular flow of a market economy?
Firms
Households
Governments
9
Who answer the economic questions in a
Market (capitalist)
economy?
Combination of Firms, Households, and Government.
Government.
Firms and Households.
No one.
10
A PPC Curve illustrates...
The supply of all factors of production in an economy
How much an economy is capable of producing
The effects of fiscal policy on an economy
The demand for consumer goods in an economy
11
Hamburger Market: The cost of beef falls.
Supply Shifts Right (Increases)
Supply Shifts Left (Decreases)
Demand Shifts Left (Decreases)
Demand Shifts Right (Increases)
12
Which of the following are considered to be outputs?
the factors of production
services
goods
intermittent goods
13
If price increases then...
there will be a shortage
there will be a surplus
Supply will shift
Demand will shift
14
A shortage is when...
Qd exceeds Qs
Qs exceeds Qd
Qd is equal to Qs
15
The
Law of Diminishing Marginal Utility
states that w/each additional unit...
the total resources of the nation decline.
your satisfaction w/it decreases.
your finances decline.
your satisfaction w/it grows.
16
If Demand decreases then...
Price decreases
Price increases
Quantity increases
Quantity decreases
17
Under modern economic philiosophy, producers should specialize in what they have a ____ and trade for what they don't.
absolute advantage
comparative advantage
18
Specialization leads to:_________
Voluntary Exchange
Price System
Private Property
Market Competition
19
What is the most common economic system?
Mixed
Market
Traditional
Command
20
Human capital is
The knowledge, skills, and land possessed by an individual
The skills, knowledge, and experience possessed by and individual
The demand, knowledge, and skills possessed by an individual
The skills, knowledge and money possessed by an individual
21
Which of the following is the best example of physical capital?
A business hiring 10,000 workers at a factory
A $100,000 business loan from a bank
A truck for a delivery company
An increase in construction jo
22
Why are tradeoffs necessary?
Every product has flaws
People are indecisive
Everyone wants something different
Resources are limited
23
Scarcity exists because
human wants exceed the productive capacity of an economy.
Supplies of land and other resources are unlimited.
physical capital does not depreciate.
Population and the labor force are decreasing.
24
If Demand increases then...
Price decreases
Price increases
Quantity decreases
Quantity increases
25
What point shows an
unemployment of resources
?
A
Y
X
C
26
If there is a change to resource costs then...
Demand will shift
there will be a surplus
Supply will shift
there will be a shortage
27
If price decreases then...
there will be a shortage
Demand will shift
Supply will shift
there will be a surplus
28
If there is a change to consumer tastes then...
there will be a shortage
there will be a surplus
Supply will shift
Demand will shift
29
What is the key issue that economics addresses?
Reduction of unemployment
Reduction of budget deficit
Promotion of privatization
Use of scarce resources
30
If both Supply and Demand shift, then...
Both price and quantity will be indeterminate.
Either price or quantity will be indeterminate.
We will be able to figure out the impact on price and quantity.
31
Who answer the economic questions in a
Command (communist)
Economy
?
Government.
Firms and Households.
Combination of Firms, Households, and Government.
No one.
32
What is comparative advantage
The producer with the middlest opportunity costs
The producer with decent opportunity costs
The producer with the highest opportunity cost
The producer with the lowest opportunity cost
33
What is absolute advantage?
To make the most of a certain product
To make a product most efficiently
To have have the most money
To have the biggest PPC shift
34
The discovery of new technology would do what to a PPC?
Shift the curve outward
Move to a point inside the curve
Move to a point outside the curve
Shift the curve inward
35
What is a capital good?
A good for consumers
A good made in the capital of a state
A form of money
Goods that are used to produce other goods
36
What is a negative cost of trade?
a less productive society
declining Production Possibilities Curve
decreased economic wealth
job loss for some
37
If Supply increases then...
Quantity decreases
Quantity increases
Price increases
Price decreases
38
Specialization improves productivety by...
improving technology
improving innovation
improving physical capital
improving human capital
39
A surplus is when...
Qs exceeds Qd
Qd is equal to Qs
Qd exceeds Qs
40
Which price would create a shortage?
$4
$2
$3
41
The opportunity cost of an activity is
the value of the benefit received from the activity
the value of the lost benefit of the next best alternative
the amount of time spent on the activity
the sum of benefits from all the sacrificed alternatives
42
Hamburger Market: The price of tacos increases.
Demand Shifts Right (Increases)
Supply Shifts Right (Increases)
Demand Shifts Left (Decreases)
Surplus
43
Which price would create a surplus?
$5
$3
$1
44
Which of the following is the best example of investment in Human Capital?
Hiring new workers.
Decreasing the wage rate.
Training workers.
Buying new equipment.
45
Macroeconomics is the study of how _____ deal with scarcity.
Households
Individual consumers
governments
large corporations
46
What point shows
efficiency
?
C
A
Y
X
47
In which market of the circular flow are the factors of production exchanged?
factor market
product market
48
A country’s infrastructure is its...
public capital goods such as highways
natural resources
internal, as opposed to external, debt
private financial institutions
49
If Supply decreases then...
Quantity increases
Quantity decreases
Price increases
Price decreases
