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83 Cards in this Set
- Front
- Back
___________ is a keyword in the study of economics |
scarcity |
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An ________________________ is distinguished by decentralization of most economic decisions |
exchange or marketing economy |
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In a _____________ economic system, capital goods are owned and used primarily by individuals and firms in the economy. |
free-enterprise |
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A _____________________ depends largely on the operation of markets to prevent the development of unbalanced production. |
free-enterprise economy |
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Consumer demand ________ determines incomes to the various factor of production. |
indirectly |
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_______________ is the process of allocating limited means in an effort to satisfy unlimited wants |
economizing |
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A _________ can serve as an economic model |
diagram |
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The ____________________ serves as a rationing mechanism in a market economy. |
price system |
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______ help to determine incomes in the U.S. economy |
Prices |
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The four factors of production are _____________ |
land, labor, capital, and entrepreneurship |
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Without __________ there would be no economic problems |
scarcity |
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Economic decisions are __________ decisions |
allocation |
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In a competitive, free-enterprise economy consumer demand is the principal determinant to __________________________________. |
what and how much is produced |
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A _________________________ relates input factors to output choices |
production-possibilities curve |
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A production possibilities curve shows the _________________ and the ____________ combinations of goods that a society |
use of resources and alternative |
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If a nation is producing a combination of goods inside its production possibilities curve, it is ___________ its resources |
underutilizing |
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A nation's production possibilities curve can be shifted outward by ________________. |
technological development |
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A production possibilities curve will shift outward when ___________________________. |
additional resources are found |
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If existing capital wears out faster than new capital is produced , the PPF will shift ____ over time |
in |
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The process of specialization and exchange is limited by the ____ of the market in which a firm operates |
size |
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Under a __________________________ it is assumed that prices will result in the production of goods that are most needed for the promotion of the general well-being of the people |
system of free enterprise |
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One of the functions of price in a capitalistic economy is the _____________________________. |
allocation of the factors of production |
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To abandon prices as a method of directing production requires the ___________________. |
substitution of political controls |
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A _____________ is one that possesses utility but has no price |
free good |
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_______________ is the study of the problems and issues associated with the individual, the firm, the allocation of goods and services, and the markets for goods and services. |
Microeconomics |
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An ___________________ is one which is scarce, useful, transferable, and material. |
economic good |
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In a _________________, buyers and sellers are considered rational when they attempt to maximize their own self interest |
market economy |
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___________________ constitute the most important set of factors determining the market price of a commodity |
supply and demand |
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When a demand curve has been plotted and drawn, it usually slopes ________________. |
downward to the right |
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With an increase in supply, the supply curve shifts to the _______. |
right |
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_____ is an expression of exchange value in terms of money |
Price |
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Whenever buyers will purchase more or less at a given price a shift in demands _________ |
occurs |
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It is possible for a change in the price of one good to lead to a change in __________________. |
the demand for another good |
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An increase in demand will tend to increase both ________ and ___________________. |
the price and the amount of the commodity exchanged |
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Under competitive conditions, price is established at that point where ________________ |
demand and supply are in equilibrium |
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An equilibrium price results in the _____________. |
"clearing of the market" |
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The law of supply states that as the price of aa good increases producers will ________________ |
offer more of it for sale |
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At equilibrium price there are ________________ in the market |
no shortage or surpluses |
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In ________________________, prices cannot stay above or below the equilibrium point for a long period |
competitive markets |
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A surplus in a competitive market indicates ____________________ |
prices are too high |
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If a decrease in the price of good A cause an increase in the demand for good B, then ___________________. |
A and B must be complements |
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A leftward shift in a supply curve represents a _________________ |
decrease in supply |
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If suppliers expect an increase in price, they will _______________________ |
reduce the current supply of a good |
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If supply increases and demand decreases, then _____________________ will fall |
equilibrium price |
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As the real wage increases, the opportunity cost of not working outside the home _____________ |
increases |
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Personal income in the US is primarily determined by _____________________ |
selling labor services |
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The fastest-growing component of US personal consumption is _________________ |
services |
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Household production still exists because it often requires ________________________ than market production does |
fewer specialized resources |
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The ___________ is the least common form of business organization in the US |
partnership |
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One important role of government in the economy is to ___________________ and ________________ |
safeguard private property and enforce contracts |
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When externalities are present, market prices ________________ all the social costs or benefits of the activity |
do not reflect |
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Federal individual income taxes illustrate the ___________________ of taxation |
ability-to-pay principle |
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Import restrictions usually ________ domestic producers at the expense of domestic consumers |
benefit |
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Since prosperity usually follows depressions, it is __________________ that depressions cause prosperity |
not evident |
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Today economists are __________________ that the study of economics should be limited to the realm of positive economics |
not in universal agreement
*fallacy of composition* |
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________________ is concerned with value judgements regarding what economic policy ought to be |
normative economics |
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______________ is a study of aggregates in the economy |
macoeconomics |
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When the entire production possibilities curve shifts inward, the economy is ____________ |
declining |
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The opportunity cost of a choice is defined as the _________________________ |
value of the best alternative choices |
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In a ___________________, the government is the dominant mechanism for rationing goods and services |
market economy |
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Probably the main characteristic of supply curves is that... |
they generally slope from left to right |
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Anytime the market price moves away from the equilibrium position to a lower price, market action will tend to force it ___________ its original equilibrium position |
towards |
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The quantity demanded of a good or service varies _________ with the change in price |
inversely |
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A change in quantity demand occurs whenever the consumers will purchase more because of a _______ in price |
decrease |
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A demand curve shows the graphic relationship between the ____________ and ___________ |
price of a good and quantity |
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An increase in the price of a good will cause a ____________ in the demand for its substitute |
increase |
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The determinants of supply are ______________ related to the determinants of demand |
not closely |
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If the price of pork is above its equilibrium price there will be a ____________________ of pork |
surplus increase |
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Movement along an existing demand curve indicates a _______________________ |
"change in quantity" |
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A rightward shift in a demand curve represents a _________________ in demand |
increase |
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As the price of ballpoint pens increases, the demand for felt-tip pens can be expected to ___________ |
increase |
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If demand decreases, then quantity supplied will ______________ |
decrease |
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If supply increases, then quantity demanded ____________ |
increases |
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A decrease in the price of peanut butter will __________ a leftward shift in the supply curve of peanut butter |
not cause
*movement, not shift* |
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An improvement in technology shifts the supply ___ |
out |
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If the price of labor increases, employers will hire _______ labor since _______________ |
less, it is higher priced |
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An increase in professor's salaries ________ the supply of college education |
decreases |
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If both supply and demand increase, then the change in price is _____________ |
indeterminate |
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A price floor set below the equilibrium price will result in a ____________ |
shortage |
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The personal income tax is based on the ________________________ principle of taxation |
ability to pay |
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markets are linked by.... |
money |
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fallacy of compensation |
what is good for you is good for the group |
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what type of economy deals with basic questions? |
All the Above |