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Micro Test #1 Flashcards | StudBud
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Micro Test #1
Micro Test #1
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Questions
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Answers
1
The human resource that combines the other resources to produce a product and bears risk is
venture capitalist
CEO
entrepreneur
employee
2
Another word for Market Economy is?
Mercantilsim
Capitalism
Federalism
Communism
3
Minimum wage is often set above the market wage, this is an example of:
a price floor
a subsidy
a quota
a price ceiling
4
Which of the following would be considered in microeconomics?
Study of an individual consumer grocery shopping
Stud of Government spending and budget
Study of Nations Resource Uses
Study of the exchange of exports globally
5
Market equilibrium occurs when:
the market closes
all of the above
quantity demanded equals quantity supplied
there is incentive for prices to change
6
opportunity cost
cost of choosing one opportunity or investment over another
cost of selling a business to begin another
cost of operating a business
earning the best profit possible
7
A point along the Production Possibility Curve is:
achievable but inefficient
impossible to achieve
fully efficient
none of the others
8
A
price ceiling
results in a ________ and will likely bring a/an _____________ in supply and a/an____________ in demand.
Surplus, decrease, decrease
Shortage, increase, decrease
Surplus, decrease, increase
Shortage, decrease, increase
9
What is the definition of a normal good?
a good that has an income elasticity greater than 1
good whose consumption decreases when income increases
good whose consumption increase with an increase in income
a good that has an income elasticity less than 1
10
What is a command economy
an economy driven by country's individual citizens
an economy controlled centrally by a government.
an economic system combining private and public enterprise.
an economy controlled by traditions, customs, and beliefs.
11
In 1776, Adam Smith wrote
The Road to Serfdom
The General Theory of Employment, Interest and Money
From Russia With Love
The Wealth of Nations
12
Name 2 economic resources
Land
Economy
Trade
Entrepeneuriship
13
If the economy is inside the production possibility curve
the production possibility curve will move inwards
increasing production of one g/s will reduce another
production cannot increase unless technology improves
some resources are unemployed
14
A production possibility curve represents the...
options for a government.
future choices for a business.
various combination of two goods that can be produced.
way factors of production can be used.
15
When the market price of a good is above its equilibrium value
A surplus will exist in the market.
You have market price
A shortage will exist in the market.
quantity demanded will exceed the quantity supplied.
16
Adam Smith is the father of modern economics
False
True
17
What is the purpose of the factors of production?
Resources for production
Income and economic growth
Trade
Demand and supply
18
What is a medium of exchange
Money
Proof of purchase - like a receipt
A white witch
Anything that sets the standard value - acceptable to both parties
19
All of the following are determinants of demand EXCEPT
income
tastes or preferences
technology
availability of substitutes
20
Movement along the Demand curve.
When a product is in style
When only price changes
When companies advertise a product
When the substitute for that product becomes more expensive
21
Macroeconomics is the study of the decision making of
Entire economies
Small businesses
Foreign economies
Large businesses
22
Within the circular flow, there are two markets. These markets are the
market for the government & the market for everyone else.
market for business to sell goods & market to sell services.
product market & resource market.
market for tangibles & the market for intangibles.
23
The circular flow diagram shows
how banks circulate money.
relationships in the economy.
the flow of world trade.
economic policies.
24
Adam Smith believed the most effective operation of the market is accomplished by:
mercantile patterns of diminishing margins
everyone following the instructions of the wealthy merchants
government decree
freedom in the market as illustrated by the "invisible hand"
25
A market economy is an economic system
regulated by supply and demand, not the government.
with only the most educated having the power.
which takes according to ability and gives to the needy.
that is regulated by the government.
26
What is Law of Supply?
An area of the law that deals with family matters
Is a direct relationship between price and quantity.
An American animated television series.
The price of a good or service increases.
27
What is an example of equilibrium in a market economy?
1,000,000 cars made, 2,000,000 bought
3 jackets made, 1 bought
50 shirts made, 50 sold
20 shoes made, 5 bought
28
All of the following are determinants of supply EXCEPT
availability of substitutes
availability of resources
technology
number of competitors
29
Adam Smith argued in the “Wealth of Nations” that the market was determined by
_____________.
invisible competition
Mercantilism
prices
self-interest
30
What does a point outside a production possibility curve represent?
The maximum use of resources
A currently unattainable position
An inefficient position
Unused resources
