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Unit 7 Review! Flashcards | StudBud
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Unit 7 Review!
Unit 7 Review!
60 terms
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StudBud Administration
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43 plays
Covering chapters one and two
Flashcards
60 cards
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Practice quiz
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Host live
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Questions
60
Answers
1
What is sub prime lending?
Giving money to people illegally
Lending money to people who don't have good/great credit
Bundling loans and selling them to investors
Investing money in plans that bet on the market to fail
2
A person who abuses resources that are meant for everyone is known in economics as
A free loader
A jerk
A free rider
Deadweight Loss
3
When firms outsource, they
Minimize utility and keep workers where they are
Maximize costs of production and send jobs elsewhere
Maximize utility and keep workers where they are
Minimize costs of production and send jobs elsewhere
4
A system where the means of production are mostly privately owned and government is secondary
Capitalism
Communism
Bonkers
Socialism
5
Getting a vaccine or eating more leafy greens to boost one's health are examples of
Behavioral Economics
Incentives
Maximizing Utility
Market Power
6
The author says that a carbon tax would be paid by all, but who does it affect more?
Rural people because they shouldn't have to pay
Urban dwellers because they're near more pollution
The poor because a larger part of their income is taken
Politicians because those taxes are unpopular
7
What does the picture represent?
Amount of product desired and amount of happiness
Amount of faith in market and corresponding prices
Amount of product desired and amount the market provides
Amount of happiness and corresponding prices
8
The stress or happiness gained from a transaction/choice is known in economics as
Psychic Benefits/Costs
Barrier to entry
Opportunity Cost
Profit/Revenue
9
A state starts taxing cigarettes, so people just buy smuggled ones. This is an example of
Network Effects
Smarts
A perverse incentive
Price Discrimination
10
What are positive impacts of a competitive market where firms seek profit?
Creative Destruction (short term)
Toxic Assets
Innovation
Creative Destruction (long term)
11
A used car salesmen knows that a car is defective, but sells it anyway. This is an example of
Price Discrimination
Adverse Selection
Opportunity Cost
Supply and Demand
12
Money spent to buy stocks in the hopes that they will grow in value over time is an example of
Communal Property
Opportunity Cost
The Invisible Hand
Supply and Demand
13
Uber's surge pricing allows people to access rides during popular times. This is an example of
Price Discrimination
Free Rider Problem
Communism
Adam Smith's Invisible Hand
14
The situation where neither party cooperates even though it is in their best interest to do so
Principal-Agent Problem
The Prisoner's Dilemma
Adam Smith's Invisible Hand
Capitalism
15
1800 Flowers provides flowers especially for international women's day. This is an example of
Free Rider Problem
Principal-Agent Problem
Adam Smith's Invisible Hand
Real Cost
16
Maximizing utility can be defined as
When a price increases faster than people's incomes rise
the explanation for why a celebrity earns so much money
Getting the most satisfaction from the least amount of input
Putting in more input as an investment for the future
17
Why does the author say people overuse communal resources like rhino horns?
People are afraid others will get more than them
They are valuable and people want to get the most
People want to preserve the rhinos, so they kill them
People make money off of safaris, so they preserve rhinos
18
According to the chart, when would a product be at its lowest price?
When the demand is high and the supply is high
When there is no product
When the demand is low and the supply is high
When the demand is high and the supply is low
19
When making clothing, a garment firm needs to add up how much it spends to produce the items.
This called market power
This called real cost
This is called self correction
This is called socialism
20
Vine disappeared from the market because it lacked
Creative destruction
The Superstar Phenomenon
Network effects
Scarcity
21
When firms try to minimize productions costs, they are
Build smaller stores and factories
Attempting to put less in while still making maximum profit
Attempting to get a bigger market share
Attempting to get rid of all competition
22
This article talking about the possibly high costs of starting a business shows
Barrier to Entry
Scarcity
The Prisoner's Dilemma
Network Effects
23
How is creative destruction a negative force?
In the short term, people lose jobs/a way of life
In the short term, new industries are created
In the long term, people lose jobs/a ways of life
In the long term, new industries are created
24
The market tends to reward
Those who do not compete
Those who are the swiftest, strongest, and smartest
Those who drop out
Those who are kind and think first of others
25
The #1 ingredient in Botox also causes food poisoning. Injecting this in faces can be seen as
An investment and an example of securitization
Harmful and an example of toxic assets
Irrational and an example of behavioral economics
Lethal and an example of deadweight loss
26
According to Adam Smith, why do the butcher, brewer, and baker give us their goods?
Principal-Agent
Creative Destruction
Self interest
Communal Property
27
Going to the gym at 5 a.m. each day can be painful/not fun, but it can also be an example of
Maximizing Utility
Self Correction
Deadweight Loss
Behavioral Economics
28
The large price difference between a Macbook Air and most other netbooks is an example of
Securitization
Profit
Market Power
Behavioral Economics
29
In a cap and trade system, the right to pollute is limited. As a result,
Firms are able to give competitive prices
Small firms buy more rights to pollute from bigger firms
Large firms buy more rights to pollute from smaller firms
Small firms pollute more to be competitive
30
Choose all the things that could be considered luxuries
Rare Russian Faberge Eggs
Potable Water
Clean Air
Nike Air Yeezy Sneakers
31
A store that offers frequent customers deals while charging others more is using
Securitization
Supply and Demand
Price Discrimination
Creative Destruction
32
A resource that is meant to be used by all is known in economics as
Supply and Demand
Toxic Assets
Communal Property
Awesome
33
The study of why firms and consumers act the way they do is called
Behavioral Economics
Principal-Agent Problem
Capitalism
Interesting
34
An example of an incentive can be
A tax on cigarettes
A tax break on purchasing a home
More payment for more years worked
The ability to avoid punishment
35
How is creative destruction a positive force?
In the short term people lose jobs/a way of life
In the long term people lose jobs/a way of life
In the long term it creates new industries
In the short term it creates new industries
36
Conservatives fear that the income tax is an incentive to
have citizens do their own taxes
Not work
Travel Less
Save for retirement
37
Few crabs in the Bay Area this winter caused a lot of disappointment over New Years.
This is an example of toxic assets
This is an example of scarcity
This is an example of market power
This is an example of barrier to entry
38
Lyft recently donated $1 million to the ACLU- which made many riders happy. This can be seen as
Free Rider Problem
Securitization
Creative Destruction
Adding Value
39
Why does the author of the book say the market can get stuck in a "vicious circle"?
Government policies are ineffective
Self interest leads to positive side effects
People aren't maximizing their utility
It doesn't really self correct
40
A system where everyone owns the means of production and there is no social class or money
Capitalism
Market
Communism
Communal Property
41
When buyers and sellers mostly interact with little government intervention/planning, that is
Principal Agent Problem
Creative Destruction
Behavioral Economics
A Market Economy
42
By putting labels like 'organic' and 'gluten free' and saying that purchases benefit wildlife
This cereal company minimizes production costs
This cereal company adds value to its product
This cereal company practices price discrimination
This cereal company makes a barrier to entry
43
What does the author credit for making sure people like Oprah aren't corn farmers?
Capitalism
Supply and Demand
Creative Destruction
Adam Smith's Invisible Hand
44
Certain people are able to earn huge amounts of money because they reach the masses
Network Effects
Scarcity
Superstar Phenomenon
Profit/Revenue
45
In example of Communist society, everyone was provided with basics like bread, but
All loaves were the same and they had to wait in line
Loaves varied widely
People could buy better loaves if they wanted to
it was a lie and most people went without
46
The author of the book attributes the staying power of Microsoft Word to
Network Effects
Price Discrimination
Scarcity
Deadweight Loss
47
If a person refuses to help their mother cook dinner, but still eats the meal, they are
A terrible child
so smart
A free rider
A free loader
48
The many homes sold during the "bubble" became _____________ after the 2008 financial crisis
Worthless
Deadweight Loss
Communal Property
Toxic Assets
49
When government creates unemployment policies, it worries about things like
Securitization
The perverse incentive to not work
Deadweight loss
The free rider problem
50
When a market adjusts from imbalance to equilibrium, it is called
Creative Destruction
Self Correction
impossible
Supply and Demand
51
Benefit Corporations, or B Corps
Were given the ability to focus on things other than profits
Purchased the ability to pollute more from smaller firms
Provided social security and healthcare to the public
Were not as important to the government (on the 'B' list)
52
When the author talked about taxing red sports cars, he characterized that as
Adverse selection because salesmen know more than buyers
Deadweight loss because no one benefits from the policy
Toxic assets because cars lose so much value after purchase
A barrier to entry because not everyone can afford those
53
Investment bankers can be benefitted by taking large risks. This could lead to
The principal agent problem
Scarcity
Market Power
Behavioral economics
54
Property that is worth far less than what it was bought for is known as a
deadweight loss
luxury
mistake
toxic asset
55
Home loans that were bundled and sold to investors were called
Communal Property
Markets
Deadweight Loss
Mortgage Backed Securities
56
True or False- people acting entirely out of self interest can still benefit a community
True- ecotourism is an example of this
False- selfish people bring bad things on everyone
True- strip mining is an example of this
False- ecotourism is an example of this
57
What is a concern with the government's social security policy?
Youth's barrier to entry (they're too young to benefit)
The perverse incentive to not save for retirement
The superstar phenomenon where stars won't pay
Market Power
58
A realtor is motivated to have a buyer pay more for a home since they get some of that money
This is an example of mortgage backed securties
This is an example of creative destruction
This is the principal-agent problem
This is an example of securitization
59
The money a person pays for their college education is an example of
Opportunity Cost
Perverse Incentives
Toxic Assets
Profit/Revenue
60
How can a firm make itself more competitive?
Automation
Get rid of other firms
Outsource
Protectionism (like restrict trade)
