Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
40 Cards in this Set
- Front
- Back
The overriding reason as to why households and societies face many decisions is that...
|
resources are scarce
|
|
the principle that "people face tradeoffs" applies to
|
individuals, families, societies
|
|
which of the following phrases best captures the notion of efficiency?
|
minimum waste
|
|
when the government attempts to improve equity in an economy the result is often
|
a reduction in efficiency
|
|
when you calculate your true costs of going to college, what portion of your room and board expenses should be included?
|
you should include only the amount by which your room and board expenses exceed the expenses for rent and food if you were not in college
|
|
college age athletes who drop out of college to play professional sports
|
are well aware that their opportunity cost of attending college is very high
|
|
rational people make decisions at the margin by
|
comparing marginal costs and marginal benfits
|
|
if the U.S. decides to trade with Mexico, we know that
|
Mexico and the U.S. can both benefit
|
|
an economic theory about international trade that is based on the assumption that there are only 2 countries and 2 goods
|
can be useful in helping economists understand the complex world of international trade involving many countries and many goods
|
|
according to Miller, et al, the terrible trade off in teh FDA's decision to introduce new prescription drugs can be described by the following sentence
|
the longer it takes to approve a new drug the greater the nmber of ppl who die form lack of access to the potentially helpful drug, whereas the less time it takes to approve a potentially helpful drug the fewer the number of people who die because they had access to it
|
|
factors of production are
|
used to produce goods and services
|
|
in the simple circular-flow diagram, households
|
own the factors of production
|
|
production is efficient if the economy is producing at a point
|
on the production possibilties frontier
|
|
a production possibilities frontier shifts outward when
|
the economy experiences economic growth
|
|
regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes vases, but regan is better at producing both, in this case trade could...
|
benefit both Jayson and Regan
|
|
a countries consumption possibilities frontier can be outside its producton possibilities frontier if
|
the country engages in trade
|
|
according to miller, et al, running automobiles on ethanol
|
has replaced gasoline only at a high opportunity cost
|
|
the producer that requires a smaller quantity of inputs to produce a certain amount of a good, relative to the quantities of inputs required by other producers to produce the same amount of that good
|
has an absolute advantage in the production of that good
|
|
the principle of comparative advantage does not provide answers to certain questions. One of those questions is as follows
|
how are the gains from trade shared among the parties to a trade?
|
|
belarus has a comparative advantage in the production of linen, but russia has an absolute advantage in the production of linen. if these 2 countries decide to trade
|
belarus should export linen to russia
|
|
suppose today ppl change their expectation about the future this change in expectations
|
can affect today's demand
|
|
the negative relationship between price and quanity demanded
|
applies to most goods in the country
is represented by a downward sloping demand curve is referred to as the law of demand |
|
suppose the AMA announces that men who shave their heads are less likely to die of heart failure, we could expect the current demand for
|
razors to increase
|
|
other things equal, when the price of a good rises, the
|
quantity supplied of the good increases
|
|
according to miller, et al, death by airplane crash is a bad thing. the question is how safe we shold make airline travel
|
put just enough emergency exit doors such that the expected marginal beefit of providing them exceeds or equals the marginal cost of installing and maintaining them
|
|
elasticity improves our understanding of supply and demand by adding
|
a quantitative element to our analysis
|
|
for a good that is a necessity
|
demand tends to be inelastic
|
|
holding all other forces constand, when the rpice of gasoline rises, the number of gallons of gasoline demanded would fall substantially over a 10 year period because
|
buyers tend to be much more sensitive to a change in price when given more time to react
|
|
the price elasticity of demand for a good measures the willingness of
|
consumers to move away from the good as price rises
|
|
if the price elasticity of demand for a good is 1.65, then a 3 percent decrease in price results in a
|
4.95% increase in the quantity demanded
|
|
According to miller, et al, the increasing weight of american males and females can be explained by the supply and demand for food. which explanation fo the authors emphasize?
|
due to advances in food processing technology the full cost (money + time cost) of preparing a meal has increased
|
|
eric produces jewelry boxes. if the demand for jewelry boxes is elastic and eric wants to increase his total revenue, he should
|
decrease the price of his jewelry boxes
|
|
the presence of price controls in a market usually is an indication that
|
policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers
|
|
a price ceiling is binding when it is set
|
below the equilibrium price, causing a shortage
|
|
an outcome that can result from either a price ceiling or a price floow is
|
a nonbinding price control
|
|
when OPEC raised the price of crude oil in the 1970s, it caused the
|
supply of gas to decrease
quantity of gas demanded to decrease equilibrium price of has to increase |
|
which of the following statements about the effects of rent control is correct
|
the short run effect of rent control is a relatively small shortage of apartments, and the lng run effect of rent control is a larger shortage of apartments
|
|
one economist has argued that rent control is "the best way to destroy a city, other than bombing". Why would an economist say this?
|
he fears that rent control will eliminate the incentive to maintain buildings leading to a deterioration of the city
|
|
at a minimum wage that exceeds the equilibrium wage
|
the quantity supplied of labor, will exceed the quantity demanded
|
|
according to Miller, et al, why are women paid less than men?
|
men, more than women, are employed in hazardous jobs and hence earn a higher wage known as the compensatin differential
|