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MidTerm Prep Part 1 Flashcards | StudBud
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MidTerm Prep Part 1
MidTerm Prep Part 1
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1
What does a demand curve show us?
Show the relationship between supply and demand
Shows the relationship between price and quantity supplied/demanded
Shows the relationship between economic rule and regulation
Shows the relationship between quantity demanded and total income to spend
2
Opportunity cost can be defined as:
Cost of products within the market
Opportunities to pay for product in installments
The next best alternative you didn't pick
Only available in certain markets
3
Which statement is true regarding a price ceiling:
Occur quite frequently in the United States
A legally established maximum price for a good or service
Normally set above equilibrium
A legally established minimum price for a good or service
4
Laissez Faire "Let it Be" Capitalism means:
Limited government involvment
Socialism
Command Market
Full government involvment
5
What is the market effect of a normal good?
Consumption stays relatively the same regardless of income variants.
Consumption increases when income increases, falls when income decreases
Consumption decreases when income increases, goes up when it decreases
Consumption increases if income, also falls if income increases
6
Creative destruction can be defined as:
Market systems destroy economies
New products destroy existing products
Lack of innovation and imagination
Unwillingness to grow as an organization
7
What is the market effect of a substitute good?
If price for 1 falls, demand for the other increases
Consumption declines as income rises
If price for 1 falls, demand for the other falls Price rises, demand rises
Consumption increases as income rises
8
The term government failure refers to what?
The governments limited involvement in capitalism
Government taxing on public goods
Inefficiencies in resource allocation caused by problems public sector
Government failing to bail out big businesses
9
The four general categories of economic resources are:
Land, Currency, Capital, Taxes
Land, Labor, Capital, Entrepreneurial Ability
Land, Labor, Socialism, Capital
Entrepreneurial Ability, Labor, Rules, Regulations
10
What is the market effect of a complimentary good?
Consumption declines as income rises
When price of one falls, the demand for the other increases
Consumption increases as income rise.
When the price of one falls, the demand for the other falls
11
A market is:
Must be within a business to be considered a market
Buying and selling run entirely by the government
A place that brings together buyers and sellers
A place where the bartering is the medium of exchange
12
Which is true about a price floor?
A legally established minimum price for a good or service
Price floors are only temporary
Normally set at a price below the equilibrium price.
A legally established maximum price for a good or service.
13
Provide an example of a quasi-public good
Library
Military Protection
Firefighters and EMS
Restaurants
14
Microeconomics deals with:
Individual Units
The economy as a whole
Unemployment
Inflation
15
Macroeconomics deals with:
Financial health and wellness within markets
Decisions made by households
The economy as a whole
Decision make in small mom and pop shops
16
Your education helps you, but also benefits society. This is called?
Positive Externality
Excludability
Inclusion
Labor
17
The principal-agent problem is that?
Goals of corporate managers may not match the goals of the corporate owner
it is costly for the corporate owners to obtain a corporate charter
the federal government taxes both corporate profits & dividends paid
the goals of the corporate managers may not match the goals of employees
18
Private goods are distinguished by what?
They strict adherence to government rules and regulations
NonRivalry and Nonexcludability
Rivalry and Excluability
No government involvement in the process
19
Determinant of Supply includes all of the following except:
Resource prices, taxes and subsidies, prices of other goods
Technology
Number of buyers in the market
Producer expectations,
20
The economic perspective and economizing problem can be explained how?
Scarcity means we have to make rational choices. Done through utility & MA
The inability to make good choices due to scarcity.
Balancing wealth and finances
Government regulations to protect the consumer
21
What is the market effect of a inferior good?
Consumption increases as income rises
Scarcity limits the amount of inferior goods in the market
Consumption declines as income rises
Consumption is always lower than a normal good
22
Determinant of Demand include all of the following except:
Technology
Income and prices of related goods
Number of buyers
Tastes and Consumer Expectations
