In a perfectly competitive world, a firm that has advantage over others

Will see that advantage disappear because of competition

Which is not true in a healthy market system?

Lots of resources will go unused.

If markets are working well, a problem like global warming could be solved

Entrepreneurs make less expensive ways of producing clean energy

Which of the following best describes what it means to be a price taker?

The market sets the price and you just have to deal with it

One of the biggest problems with externalities is that

Their impact is difficult to measure

What did Adam Smith say about the power of owners versus the power of their workers?

Owners have more power, there are fewer and they can collude

How might money influence the rules of the economy?

Political contributions allow their voice to be heard

Another criticism Mill had of communism was that it

Would stifle people’s creativity and inventiveness

Which is not true about the apartheid system in South Africa in the 1980s?

The society as a whole was producing as much as it could

In a circular flow diagram,

Individuals supply inputs and receive income

An ECON would suggest that historically low pay for nurses and schoolteachers is the result of

The oversupply of women into socially acceptable professions

How did apartheid affect wages in South Africa?

It lowered blacks’ wages by crowding blacks into low jobs

In a circular flow diagram,

Firms supply products and receive revenue.

Mill said that the biggest problem with free markets and private property during his time was

Laws that existed had given people huge advantagesfor wealth

In The Wealth of Nations, Adam Smith worried that producers

Would often work together to raise prices

A powerful company that is causing pollution

Might beable to influence the government to not enforce laws

Why does a champion football player make so much more money than a champion horseshoe thrower?

The market values the football player’s gifts more

Markets clearly have problems like market power and market failure. Most ECONs believe

Despite these problems, this is a better system than others

Which is an example of a positive externality?

Someone else’s music that you enjoy overhearing

Most ECONs believe that the government should act as a

Referee to make sure the competition is fair and no cheating

Adam Smith felt that the law favored

Owners, because many lawmakers were also owners

ECONs consider global warming to be a classic negative externality problem because

The full costs of activities are rarely felt by the users

The historical use of terms like “Negro” and “colored” demonstrates

Power of language in shaping perceptions and opportunities

John Stuart Mill criticized the idea of communism because he argued

People would try to avoid their fair share of work

Sometimes there are naturally occurring examples of market power. Which is the example of this?

A supermodel with unique genetic gift of exceptional beauty

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Economics Ch 5, 6, + 7

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Chapters 5, 6, and 7

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Questions 39

Answers

1
In a perfectly competitive world, a firm that has advantage over others
Will be sued
Will allow you to charge higher prices
Will last forever
Will see that advantage disappear because of competition
2
Which is not true in a healthy market system?
Lots of resources will go unused.
The outcomes will be fair as long as the starting line is fair
It is incredibly efficient
We will get the most out of what we have
3
If markets are working well, a problem like global warming could be solved
When governments stop all fossil fuel use
Entrepreneurs make less expensive ways of producing clean energy
When one company controls all fossil fuel production
When nations run out of oil
4
To deal with externalities, governments need to be
Ignorant to science
Captured by special interest
Responsive to market powers
Fair and impartial
5
ECONs best describe market power as
Power over people
Power over your enemy
Power over price
Power over the government
6
Which of the following best describes what it means to be a price taker?
You can control what the price will be
You get the best deal that you can
You have secret information about where to get better deals
The market sets the price and you just have to deal with it
7
Which is not a question about microeconomics?
How do people make choices?
How do markets coordinate people’s choices?
How big is the whole economy?
Why might a market fail?
8
In early societies, much of trade was done by barter. Barter is best described as
Not beneficial to both parties
An exchange of equivalents
A one-way transaction
Favored by governments
9
Key feature of markets is the idea of owning things like your labor, land, and your belongings.
Communism
Property Rights
Free will
Advantage
10
One of the biggest problems with externalities is that
They occur only in the US
Their impact is difficult to measure
They rarely occur
They are often overlooked
11
What did Adam Smith say about the power of owners versus the power of their workers?
Workers would have more power, they have government support
Workers would have more power because there are more of them
Owners have more power, there are fewer and they can collude
Owners would have more power,they want to keep workers happy
12
How might money influence the rules of the economy?
Courts will overrule rules that interfere with the economy
Rules will be made without any input from political donors
Political contributions allow their voice to be heard
It won’t, political contributions have been severely limited
13
When everyone agrees on something as an acceptable form of payment, ECONs call that
A store of value
A metallic currency
A unit of account
A medium of exchange
14
Another criticism Mill had of communism was that it
Would stifle people’s creativity and inventiveness
Would be unfair to workers
Would lead to unequal outcomes for all
Would result in high levels of unemployment
15
Which is not true about the apartheid system in South Africa in the 1980s?
Whites had power
It took many resources to preserve that system
The society as a whole was producing as much as it could
Power paid off for the whites in terms of wealth
16
In a circular flow diagram,
Individuals supply inputs and receive income
Firms supply inputs and receive revenue
Individuals supply products and receive income
Firms supply products and receive costs
17
An ECON would suggest that historically low pay for nurses and schoolteachers is the result of
The oversupply of women into socially acceptable professions
The unwillingness of women to work hard to obtain higher pay
The expectation of women to not enter the labor force
The lack of expertise associated with those jobs
18
How did apartheid affect wages in South Africa?
It raised wages for both groups
It lowered blacks’ wages by crowding blacks into low jobs
It lowered whites’ wages by not allowing full competition
It caused wages to equalize for both blacks and whites
19
In a circular flow diagram,
Firms supply products and receive costs.
Individuals supply inputs and receive consumption spending.
Individuals supply products and receive income.
Firms supply products and receive revenue.
20
Which is the least important reason that gold became so effective as money?
It is fixed in supply
It is portable
It is shiny
It is divisible
21
Mill said that the biggest problem with free markets and private property during his time was
People didn’t know enough about how great they were
Resources were too scarce to make them work well
Laws that existed had given people huge advantagesfor wealth
Technology wasn’t developed enough to make them work well
22
In The Wealth of Nations, Adam Smith worried that producers
Would work themselves to death
Would only care about themselves
Would often work together to raise prices
Would overthrow the king
23
A powerful company that is causing pollution
Will always look to reduce pollution on its own
Might beable to influence the government to not enforce laws
Desires to pass its cost along to its customers
Will want to relocate to anarea with stricter pollution laws
24
When exchanges occur in both product markets and input markets,
Buyers can’t often find what they want
Sellers will receive money
Sellers always have some left over
Buyers will not be satisfied with what they purchase
25
In a circular flow diagram,
Individuals supply products
Businesses supply inputs
Businesses demand products
Individuals demand products
26
Why does a champion football player make so much more money than a champion horseshoe thrower?
The football player has a shorter time to make money
The horseshoe thrower is less gifted
The football player risks more than the horseshoe thrower
The market values the football player’s gifts more
27
Markets clearly have problems like market power and market failure. Most ECONs believe
That we should abandon market economies
Despite these problems, this is a better system than others
Governments should try to own all property
Other systems of economics are better
28
Which is an example of a positive externality?
Noise from a nearby airport
Chemicals in your drinking water
Someone else’s music that you enjoy overhearing
Bad smell from a factory
29
In a circular flow diagram,
Individuals supply products
Individuals demand inputs
Businesses demand products
Businesses supply products
30
Most ECONs believe that the government should act as a
Servant of those who make the largest political donations
Referee to make sure the competition is fair and no cheating
Controlling force in all aspects of our economy
Completely disinterested party when it comes to the economy
31
ECONs believe that markets work because people respond to a signal. This signal is called a
Demand
Supply
Price
Failure
32
In a perfectly competitive market, what sets the price?
The government
The customer
The seller
Supply and Demand
33
Adam Smith felt that the law favored
Workers, because they were the majority
Workers, because they could organize
Owners because they were much more generous to their workers
Owners, because many lawmakers were also owners
34
Socialization can have effects on market choices. Which area has the greatest effect?
Production techniques
Gender roles
Consumer choices
Product development
35
ECONs consider global warming to be a classic negative externality problem because
Negative externalities are easily measured
The full costs of activities are rarely felt by the users
Innovations keep shifting the problem around
International activities rarely contribute to the problem
36
The historical use of terms like “Negro” and “colored” demonstrates
That discrimination no longer occurs today
How terminology changes over time
Power of language in shaping perceptions and opportunities
That language has little consequence
37
John Stuart Mill criticized the idea of communism because he argued
People would be treated unequally
People would try to avoid their fair share of work
The population wouldn’t grow fast enough
It couldn't work
38
Sometimes there are naturally occurring examples of market power. Which is the example of this?
A king who orders his subjects to do whatever he pleases
A business that bribes Congress to prevent any competition
A supermodel with unique genetic gift of exceptional beauty
A community with zoning laws that stop businesses entering
39
An unintended outcome that has an effect on someone else is called
An optimum
An equilibrium
An externality
Bad luck

Economics Ch 5, 6, + 7 Flashcards | StudBud