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Midterm review - Units 1,2 and 3 Flashcards | StudBud
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Midterm review - Units 1,2 and 3
Midterm review - Units 1,2 and 3
20 terms
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StudBud Administration
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Review of concepts regarding supply, demand, equilibrium, price ceilings and price floors.
Flashcards
20 cards
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Practice quiz
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Questions
20
Answers
1
The sale of a secondhand car would NOT be included in GDP because
The sale is a free market transaction
The car doesn't represent new production
The car is an intermediate good
It's part of the underground economy
2
Adam Smith's notion of an "invisible hand" says that who economic decisions come from
international trade
product demand
self-interest
the government
3
A surplus is when
Supply equals demand
Demand is greater than supply
Demand equals supply
Supply is greater than demand
4
Which would an economist consider a likely complement for tea.
steak
sugar
water
coffee
5
What would an economist consider a likely SUBSTITUTE for coffee
chicken
water
donuts
tea
6
What does the Consumer price index measure?
Unemployment
Taxes
GDP
Inflation
7
If the price of peanut butter increases, the demand for bread will decrease, because they are
goods
externalities
complements
substitutes
8
Economics is the study of
how businesses make money
the printing and circulation of money
how individuals & businesses make choices based on scarcity
how income and wealth is distributed
9
Minimum wage is an example of
a price ceiling
a price floor
Equilibrium
10
An example of a price ceiling is....
Minimum wage
Shortage
Equilibrium
Rent control
11
The law of demand explains that when the price of something decreases, the demand will....
remain the same
decrease or increase based on elasticity
decrease
increase
12
Which product most likely has a demand that is INELASTIC?
a meal at a restaurant
medicine
a vacation
beans
13
Which of these are the two MOST significant cause of income inequality?
differences in wealth and education
advances in technology and gender discrimination
an increase in service jobs and declining unions
changes in family structure and monopoly power
14
A computer is consider which of the following factors of production?
entrepreneurship
land
labor
capital
15
What does the "I" in the output expenditure model mean?
Imports
Interest
Investments
Income
16
Who are most vulnerable to poverty?
People without high school diplomas
People with college degrees
children
the elderly
17
The law of supply states that as the price of something increases, the supply will
decrease
decrease or increase based on elasticity
remain the same
increase
18
When inflation increases who suffers most
People who get cost of living increases
People with loans at a fixed rate
People on a fixed income
19
What are the characteristics of demand?
the willingness and desire to buy a product
the desire,ability and willingness to buy a product.
the ability and willingnesss to buy a product
the desire and ability to buy a product
20
What is the net foreign sector in GDP?
M
X
X+M
X-M
